Gov’t eyes anti-dumping cases vs Asian automotive makers

MANILA, Philippines - The government plans to clamp down on the importation of motor vehicles from major Asian automotive makers as part of efforts to boost state coffers and protect the local industry, Finance Secretary Cesar Purisima said over the weekend.

He also said he is working with the Department of Trade and Industry for the filing of anti-dumping cases against some Asian automotive makers.

“We’re looking at importations of cars from major auto exporting Asian countries that declare construction value which, based on our information, is much lower than how much they sell that same car in their home markets. I believe that would be a basis to file an anti-dumping charge,” he said.

Republic Act No. 8752 or the Anti-Dumping Act of 1999, which amended Sec. 301 of the Tariff and Customs Code of the Philippines, provides protection against unfair foreign competition to local industries.

Dumping comes into play when foreign producers sell their products at prices lower than the cost of production or lower than prices in their home markets.

By selling cheap in their export markets, foreign automotive makers can threaten domestic competitors.

Although meant to save domestic jobs, anti-dumping duties lead to higher prices for domestic consumers.

Expected to be affected by the government’s plan to restrict vehicle importation is the Association of Vehicle Importers and Distributors (AVID), which has been posting steady growth in sales in the past years. 

Car importers sold a total of 28,400 units last year, up 14 percent from 24,880 units in 2011. 

Leading the pack were Hyundai Asia Resources Inc., followed by Covenant Car Company inc. (Chevrolet) and Motor Image Pilipinas (Subaru).

AVID members alone sold 16,284 passenger cars in 2012, 18 percent higher than the 13,806 units sold in 2011.

The light commercial vehicle segment rose nine percent to 12,116 units from 11,074 a year earlier.

Other AVID members are Mercedes Benz importer CATS Motors, Mini distributor British United Automobiles, Porsche and Audi distributor PGA Cars Inc., Volvo importer Scandinavian Motors Corp. and Motor Image Pilipinas (Subaru).

AVID sees sales growing by 10 percent this year on the back of a robust domestic economy.

Locally made vehicles have been losing ground to cheaper imports due to a free trade agreement among Association of Southeast Asian Nations (ASEAN) aimed at increasing ASEAN’s competitive edge as a production base in the world market.

The Philippine automotive market, one of the country’s few major industries, currently pales in comparison to its neighbors Thailand, Indonesia, Malaysia, and even Vietnam, which overtook the country in 2007.

Based on data from the National Statistical Coordination Board, the industry – comprising 16 vehicle manufacturers – accounted for 12 percent of the country’s industrial sector output and four percent of the total gross domestic product in 2011 alone.