Prices of Japanese-made SUVs likely to go down after signing of EO scrapping LCV tariff

MANILA, Philippines - The price of Japanese made sports utility vehicles (SUVs) and light commercial vehicles (LCV) like the Nissan Murano may go down late June after the signing of an executive order that will eliminate the tariff on LCVs.

In an interview over the weekend, Trade Senior Undersecretary Thomas G. Aquino said that under the Japan Philippines Economic Partnership Agreement (JPEPA), completely built units (CBUs) from Japan will no longer be subject to tariff.

Aquino said there will be a hearing on May 19 to discuss the tariff elimination which has already been committed by the Philippine government to Japan.

Aquino said the tariff removal will have an impact on the price because it will lower the cost of car companies. “Businessmen can now focus on real costs and not trade related costs,” Aquino noted.

In terms of the lost revenue as a result of the zero tariff, Aquino said “the foregone revenue is manageable.” He explained that it may only be hundreds of millions per year. This figure is based on the trade last year, Aquino said.

With regards to locally produced parts, Aquino said the existing tariffs will remain in place until 2013. By this time, he said a hearing will take place to determine what will happen to the tariff lines.

Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) president Elizabeth H. Lee declined to comment on the matter. “We will comment after the hearing on May 19,” Lee said in a separate interview.

Meanwhile,  Universal Motors Corp. (UMC), the exclusive assembler and distributor of Nissan LCVs in the market, sees double-digit growth for the overall sales of its popular products that include the Nissan Navara Sport Utility Truck, Nissan Urvan van, Nissan Patrol Super Safari, and the recently launched Murano Z51.

“We are looking forward to stronger growth for our product lines with at least a 10 percent increase in sales on the back of stronger consumer and business confidence after the country went through its successful, first ever automated elections,” Lee who is also the executive vice president of UMC said in a statement.

“Should the aggressive growth trend continue with ample supply to support the growing demand, growth could possibly be upwards of 20 percent,” she said.