Kia sees stable car prices via free trade agreement
Business World, 10 Feb '25
Kia Philippines has stated that the free trade agreement (FTA) with South Korea will help car manufacturers stabilise product pricing despite foreign exchange risks.
"There's still going to be excise [taxes], but the import duties will be at zero," Kia Philippines Chief Operating Officer Brian James B. Buendia told the press on the sidelines of the launch of the Kia Sorento Turbo Hybrid last 7 February.
When asked if the FTA could lead to lower prices for Korean cars, he noted that apart from import duties, the automotive industry closely monitors foreign exchange movements.
"There's another issue, which is the forex. The projected forex, and we deal with the US dollar, will be up to US$ 59. So that's an issue, because when we were doing our budget, it was only at US$ 57-US$ 58. So now we have to recalibrate," he said. "One opportunity is, yes, we will not lower the price, but we will not increase the price too, even with the forex. So those are the things that are actually being studied."
Despite this, he said that the company is looking at how it can take advantage of the FTA as Kia Philippines expands its electric vehicle (EV) lineup.
"We are now also scanning for some advantages that we can maximise," he added.
Aside from the FTA with South Korea, he said that the company hopes the executive order (EO) for the lowered tariffs for all types of electric vehicles will be retained amid its review.
"I think what's working for Kia now is the current tariffs. Whatever adjustments are made, then we would have to plan for it again," he said. "But I hope they just keep it the way it is for now. Because you can't really change the rules within the game. They just keep on changing. I hope theyÂ? just let it pass through 2028, I think."
Last year, President Ferdinand R. Marcos Jr. signed EO 62, which modified the nomenclature and rates of import duties on various products.
A part of this covered the expansion of the reduced Most Favoured Nation tariff rates for products under EO 12 to other battery EVs, hybrid EVs, plug-in hybrid EVs, and certain parts and components.
It temporarily reduced tariffs on EVs to zero until 2028.
