THE MANILA TIMES ROUNDTABLE

Ford Group eyes better PH market prospects

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FORD Group Philippines is looking forward to better prospects for the country’s growing auto industry once discussions over vehicle excise taxes are resolved.

Lance Mosley, the firm’s managing director, said Ford remains committed to the Philippines, which he described as one of the American car company’s more successful overseas markets, citing the country’s consumer-led economy, youthful labor force, and investment prospects.

In a roundtable discussion with The Manila Times editorial team, Mosley noted that the automobile industry has shown phenomenal growth, which could be affected by changes in tax policy.

Mosley said a good balance could be achieved between the government’s policy objectives and the need to make the auto industry competitive.


“We would ask (government) and allow us to have a voice at the table. To have the right balance of inputs and try to find the right solutions, [with]transparency, consistency and as well as that voice…then make sure it’s fair for all of us and all our competitors so that we can compete,” he told The Manila Times editors and reporters on Friday.

Lance Mosley, Ford Group Philippines managing director PHOTO BY ROGER RAÑADA

The government’s proposed tax reform plan calls for changes in the excise tax scheme on automobiles. Under House Bill No. 4774, filed in January by Rep. Dakila Carlo Cua, chairman of the House ways and means panel, the excise tax will be raised to 4 percent from 2 percent if the selling price is below P600,000.

If the price is between P600,000 to P1.1 million, the tax rate will be P24,000 plus 40 percent of the value in excess of P600,000. For cars priced between P1.1 million to P2.1 million, the tax is P224,000 and 100 percent of the value in excess of P1.1 million.

For cars priced above P2.1 million, the tax is P1.224 million plus 200 percent of the value in excess of P2.1 million.

Mosley said the proposed excise tax scheme would have some impact on business but it would be difficult to say how big it would be until the final version is passed by Congress.

He, however, made it clear that Ford was very supportive of government reform efforts, and would rather wait for the proposed legislation to be passed before commenting on it.

“It is very difficult for us right now to plan the business. We’re struggling a bit as we wait for the final details to become clear,” said Mosley.

Mosley said Ford would make sure its plans would be aligned with the new excise tax law.

Finance Secretary Carlos Dominguez 3rd has admitted there would be an initial slowdown in car sales, but the industry should be able to quickly recover and continue the robust pace of growth achieved in the past two years, when car sales jumped by 25 percent.

Dominguez said prices would be readily absorbed by buyers, who were expected to increase their take-home pay by way of substantially lower personal income taxes under the tax reform package.

The government expects to gain P31.4 billion in additional revenues from automobile excise tax adjustments.

“This year is very challenging and one of the most difficult that I’ve experience in trying to forecast what’s going to happen,” Mosley said, adding that other car companies were also facing difficulties in planning ahead.

But Mosley said he was anticipating an uptick in demand before taxes go up, as consumers tend to buy automobiles before new taxes take effect.

The challenge, Mosley said, would be about trying to understand when the tax is going to take effect and what the impact it would have on sales.

Mosley also said congestion at the ports could occur because of the rise in demand for cars before the new tax rates takes effect, an issue Ford had raised with the government.

Ford has 40 dealerships across the country, offices in Alabang in Muntinlupa City and a parts depot in Southern Luzon.

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