AUTOMOBILE Central Enterprise Inc. (ACEI), official distributor of German car brand Volkswagen, is bullish on doubling its sales this year, even as the threat of an excise tax is seen to weigh heavily on premium vehicles.
Klaus Dieter Schadewald, chief operating advisor of ACEI, gave a rosy outlook on sales for Volkswagen for 2017, seeing the brand doubling its 2016 sales of 1,060 units.
ACEI is a wholly owned subsidiary of Ayala Corp.
“Our target is at least double. Other German car brands, such as BMW and Mercedes-Benz, can also double, although these account for very little of the auto industry in the Philippines,” Schadewald told reporters at the sidelines of the Mabuhay Germany press conference held recently.
Driving this growth is the brand’s offerings in the midmarket segment, priced P800,000 to P 1.1 million, where the Volkswagen Polo sedan and Polo hatchbacks are.
This forecast is achievable, even amid the looming excise-tax hike now hounding the entire Philippine automotive industry.
“At the end of the day, I think there will be a compromise. The excise tax, according to the current House bill, will affect dramatically the luxury cars, but the segment is very small. It starts quite heavily on P1.6-million to P1.7- million range,” Schadewald said.
“We wIll have to look into that. It will affect dramaticaly the luxury cars, but the segment is very small so the effect will not be so bad, not like a 2-percent to 3-percent decrease on the lower end where the majority of the market is, around P600,000 to P700,00,” the executive said.
The excise-tax hike now being discussed in Congress is seen to shift the brunt of the increase on vehicles priced P2.1 million and above, but will similarly impact volume sellers in the lower-priced segment.
To add to this optimism is the European Union-Philippines free-trade agreement (FTA) now being negotiated, Schadewald said.
Should the FTA come into fruition, the 30-percent import duty slapped on European-sourced vehicles can be brought down to zero—paving the way for more competitively priced European brands in the local market.
“If this will happen, it’ll change the game,” the official said.
Volkswagen Group, the world’s largest automaker with headquarters in Wolfsburg, Germany, appointed ACEI as the sole Volkswagen Importer for the Philippines, named as Volkswagen Philippines.