Motorcycle makers seek tariff protection

Local motorcycle manufacturers want the government to increase the tariff differential between completely knocked down (CKD) units and completely built up (CBU) motorcycles.

Kiyoshi Kawahara, president and general manager of Suzuki Philippines, Inc. said yesterday that there is a need to increase the tariff differential in order to protect participants of the Motorcycle Development Program (MDP).

At present, Kawahara revealed, the tariff rate on CKDs is three percent while the rate for CBUs is 20 percent – for a mere differential or 17 percentage points. According to Kawahara, a 17 percentage points differential is not wide enough to protect local motorcycle manufacturers.

Thailand, he pointed out "has a bigger barrier to protect its market." Kawahara expressed the view that "we need some more protection. We need some time to increase our volume."

Aside from the need for a higher tariff differential between CKDs and CBUs, Kawahara said that local motorcycle manufacturers also need government’s help in curbing the continued illegal importation of completely-built up motorcycles which eats into the market of the MDP participants.

Kawahara was confident that MDP participants would still have an edge over illegally imported motorcycles since the registered manufacturers could assure product quality and parts support.

Registered sales of motorcycles in the Philippines last year, Kawahara said, amounted to only 200,000 units. He said there is no accurate figure on sales of illegally imported motorcycles.

This compares to motorcycles sales in Thailand and Indonesia which amounts to around one million units or more, Kawahara added.

Kawahara is optimistic, though, that motorcycle sales in the Philippines has a big growth potential.

Suzuki introduced yesterday its new solo model, the Shogun, which it hopes will help increase the firm’s sales in the country.

Kawahara revealed that Suzuki last year accounted for 15 percent of the total 200,000 motorcycles sold in the country.

It is ranked No. 4 behind Honda, Yamaha and Kawasaki.

Suzuki, Kawahara further revealed, intends to launch a more aggressive sales campaign to increase its local market share to anywhere from 20 percent to 25 percent.

Suzuki, however, Kawahara said, wants to develop the solo market for professionals and the younger generation.