New Car Sales
Many people are unaware that the Philippines has one of the fastest growing new car markets with sales doubling in the period 2012-17. Sales have contracted this year due to the price increase since the implementation of TRAIN (Tax Reform for Acceleration and Inclusion).
In 2017 425K new vehicles were sold, which places the Philippines behind Malaysia in terms of the new vehicle sales in the region. Indonesia and Thailand continue to dominate sales and Thailand dominating vehicle production with more than 2M units produced in 2017.
As is common in most markets, outside of Europe, Toyota dominate the market with a market share of around 40%. The Fortuner and Vios were number 1 and 2 best sellers in 2017, private car use is dominated by SUV’s and pick-up Trucks.
Unlike Europe, the US and Australia, the only funding for car purchasers is Hire Purchase or a vehicle loan from the bank. Personal leasing does not exist, and loans have a maximum term of 5 years, expats with residential status are able to receive loans.
CBU – Completely Built up Unit
These in general are units that are imported from their country of origin, examples of this would be Lexus, Porsche, JLR, Audi, to name but a few.
CKD – Complete Knock Down
To take advantage of lower import duties, most units are assembled in SE Asia Region. Kits are sent to regional assembly centers, such as Thailand, Indonesia and Malaysia. Very few vehicles are assembled in the Philippines, as we understand the list below:
- Mitsubishi L300 – about to be discontinued as this design dates back to the early 80’s
- Isuzu D Max – Pick Up Truck
- Isuzu Crosswind – AUV
- Hyundai Eon – Small Hatchback, 800cc
- Honda City – very popular small sedan
- Mitsubishi Mirage G4 – a favorite with Grab Car Drivers
- Mitsubishi Adventurer – Popular AUV
- Toyota Innova – 7 seater MPV
- Toyota Vios – as used by most Taxi Drivers, highly dependable
- SKD – Semi Knock Down
These are units sent with the majority of the assembly complete and just a small amount of local content added, such as seats. Units still, in general, receive lower tax’s and duties.
- PPV – Pick Up Based Passenger Vehicles
These are SUV built on the Pick Up Chassis, examples of these are Toyota Fortuner, Mitsubishi Montero etc.
AUV – Asian Utility Vehicles
MPV’s designed to carry multiple occupants, only used in selected markets in Asia.
Once you have been in the country for a month you will need to get a local license, this requires a visit to the local LTO. You will be required to take your passport, International License and a lot of patience. Please note the rules frequently change, be prepared for this and with any government department, losing your temper with them won’t get you very far.
Those of us living in Metro Manila will be familiar with Coding, which was implemented to reduce traffic in the metropolis, do you think it’s working?
Basically, all vehicles have a sticker on the front and rear screen, usually 2 letters and 4 numbers, the last number dictates the day you can use your vehicle. So 1 and 2 is Monday, 3 and 4 Tuesday and so on and so forth, coding commences at 7am and finishes at 8pm. The fine for using your car on a coding day is P300, you must not give the MMDA your license and can only receive one fine per day.
Comprehensive insurance is readily available, and rates are relatively cheap, if we take the best-selling car of 2017, the Toyota Fortuner. Depending on the model you will pay between P25-30K, go directly to an insurer such as Standard Insurance or Malayan, to name but a few, you will save the agents commission.
A dashcam is a sound investment in our view and particularly one which has both a front and rear view. These days they are inexpensive and easily portable for use in other countries.
Many of you will be fortunate to have a driver provided by the company, those you are employing your own need to ensure the driver has up to date NBI clearance. Ensure you get receipts for everything, they can be very creative at finding ways to increase their remuneration.
Servicing & Maintenance
Servicing Intervals are much more frequent than in Europe, Australia or the USA. Most manufacturers intervals are around 5-6Kkm or 4-6 months, if your vehicle is under warranty failure to adhere to this, may render your warranty invalid. Our recommendation regardless of the warranty is to stick to these intervals as the Philippines is a harsh environment for vehicles and use Fully or semi synthetic oil.
Websites to check out
In addition to expat.com.ph Websites are plentiful to keep up to date with Automotive news, events and legislation changes. Selection I use below: