Philippines cracks down on luxury car market
THE Aquino administration’s crackdown on tax-evading luxury car owners has sent chills down this fast-growing niche of the Philippine auto industry.
The local distributor of high-end automotive brand Jaguar said buyers of luxury vehicles have turned cautious in their purchases after President Benigno Aquino 3rd in his State of the Nation Address (SONA) alleged that some car owners may be tax evaders. Wellington Soong, Jaguar Philippines Inc. (JPI) president and chairman, on Thursday said that singling out of luxury car buyers somehow tempered the interest of potential customers, according to the Manila Times.
“There remains genuine interest in the luxury car market, but [buyers now] have to manage the timing of their purchases,” Soong said.
“Interest among prospect buyers has been very encouraging. The reaction of the market on the new Jaguar XJ surpassed our expectations in such a short time,” he said during the launch of the new model.
The new XJ costs about P9 million. The duties and various taxes paid for the importation of such model comprise up to 40 percent of the price tag. The units are imported from the UK.
Mick Razza, overseas operations director of Jaguar Cars Ltd., said the Philippine distributor has pre-sold seven units of the new XJ, adding that more orders were forthcoming.
There has been a raft of luxury car launches this year, with Soong’s own Formula Sports Inc. (FSI) launching late last month two latest models of Italy’s Maserati.
Soong said the luxury car market directly reflects the positive economic conditions of the Philippines.
The National Economic and Development Authority on Wednesday said the Philippines may grow faster than the official target of 5 to 6 percent this year.
The Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) had said that it is likely to revise upwards its full-year target after sales in the first half jumped 37.1 percent.
Daniel Isla, Lexus Manila Inc. president, said this month’s sales of the Japanese luxury automotive brand have reached 30 units—the company’s highest monthly figure so far.
He said Lexus’ sales of seven locally available models averaged 18 units a month.
Given the upbeat outlook, the company in September will launch two hybrid models, the sedan LS 600h and the sport utility vehicle (SUV) RX 400h.
Isla said the company already sold one unit of the hybrid Lexus sedan, which costs about P9 million.
Elizabeth Lee, Campi president, said the luxury car segment should not fear anything as long as the right duties and taxes are paid on sales.
“Whether you buy a luxury car or a less expensive one, you should pay the taxes. The government will not go after you just because you own a luxury vehicle,” she added.
Lee is also chief operating office of Universal Motors Corp., which recently launched its new luxury SUV models, the Murano Z51 and Patrol Royale.
She said sales so far have been “very good,” adding that the government’s tax crackdown “has no effect.
Comment on this Article. Send them to firstname.lastname@example.org
Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below