CAR SALES UP 19%

Makati City, June 7, 2003 -- Sales of the automotive industry went up by 
19.2 percent to 37,985 units in the first five months of the year from 
31,859 units sold a year earlier as demand for commercial vehicles rose 
dramatically ahead of the implementation of the new ruling removing the tax 
exemption of Asian utility vehicles (AUVs).

Based on a report from the Chamber of Automotive Manufacturers of the 
Philippines (CAMPI), sales of commercial vehicles rose by 33.7 percent to 
30,692 units during the five-month period from only 22,950 units in the 
same period last year.

AUVs account for more than half of the total commercial vehicle sales. As 
much as 80 percent of the total auto industry sales belongs to commercial 
vehicles, while passenger cars account for the remaining 20 percent.

Starting June 9, AUV prices are expected to go up by at least P400,000 as 
the new Bureau of Internal Revenue (BIR) ruling the removing tax exemption 
of AUVs finally takes effect.

RR 4-2002 imposes specific requirements on seat size, head-room and legroom 
on vehicles seeking to avail of the tax-free perks granted to vehicles with 
a seating capacity of at least 10 persons.

Sales of passenger cars remain in the doldrums even with the recent 
introduction of new models.

Based on CAMPI data, 7,293 passenger cars were sold in the first five 
months of the year, down 18.1 percent or 1,616 units compared with last 
year's 8,909 units.

CAMPI vice president and concurrent president of the Truck Manufacturers 
Association Elizabeth Lee said "market demand has eased in the last two 
months after the initial forward buying activity experienced in February 
and March in anticipation of the passage of the new excise tax bill."

"But confusion over the timing and the exact excise tax scheme to be 
implemented has dampened the initial buying surge, with market adopting a 
holding position until the price levels under the new scheme are 
determined," Lee said.

She said passenger car sales remain in a slump even with the introduction 
of new models from Honda and Toyota.

"Car prices are widely expected to be reduced under the new excise tax 
scheme, prompting car buyers to defer their purchase until the lower prices 
take effect," Lee said. (By Marianne V. Go, StaR)

Reported by: Sol Jose Vanzi

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