THE tariff adjustment for Korean cars could lead to flat growth for Kia in the Philippines, Columbian Autocar Corp. president Ginia Domingo, Kia’s exclusive distributor in the Philippines, noted.
Domingo was in Talisay City on Thursday to grace the relaunching of Kia’s showroom under the Gateway Motors dealership.
In the first half of the year, Domingo said the Korean carmaker sold 4,500 units, 20 percent behind last year’s performance during the same period. They hope to get a break from a tariff adjustment--from 20 percent to five percent-- this year.
“We have an adjustment in our numbers (the arrival of vehicles) and we are playing catch up,” the Kia official said.
Full-year sales is seen to be within the 10,000-unit range, likely the same as last year’s performance, said Domingo. But thee tariff cut would later on mean better business for Kia in the Philippines, as this makes them “more competitive.”
“We can offer better promos to customers. The savings that we get go back to them and (we) become more competitive,” Domingo said.
The official maintained that Korean cars were at a disadvantage with the 20 percent tariff versus Japanese cars that had zero tariff since 2013.
Japanese car brands capture the largest share of the market, led by Toyota.
Kia, meanwhile, holds 2.5 percent market share of the entire Philippine car industry. It maintains a plant in Sta. Rosa, Laguna for the production of its commercial vehicle, K2700.
The rest of the Kia models in the Philippines are completely built in South Korea.
In another development, Domingo said the government’s Comprehensive Automotive Resurgence Program (CARS) is “promising,” but it should also give a chance for small players to participate.
Under the CARS program, three local car assemblers may apply for fiscal support by locally assembling new vehicle models with a commitment to produce 200,000 units for each model during its six-year model life. The two commitments came from Toyota Motor Philippines Corp. and Mitsubishi Motors Philippine Corp.
The program was signed by former president Benigno Aquino III under Executive Order 182 that aims to support the country’s automotive manufacturing industry by providing P27 billion worth of incentives to local automotive assemblers.
Amid this year’s slowdown for Kia, Domingo said the country’s auto industry will continue to grow in the next five years, with the rising economy that spells higher disposable income. In addition, easy access to car financing from banks are supporting this momentum.