DTI Probes Auto Industry, Dealers

MANILA, Philippines --- The Department of Trade and Industry (DTI) is investigating reports that automotive companies do not accept cash payments preferring financing settlement or installment basis, which is in violation of fair trade practice.

DTI Secretary Gregory L. Domingo announced during a press conference they are looking into this practice following several consumer complaints received by his office.

"We are looking at auto and motorcycle dealers because there have been complaints that all they want is financing they don't want cash and if consumers pay in cash the delivery took longer. We have to look on this for unfair trade practice," Domingo said.

Industry players said that auto and motorcycle dealers have bank partners for auto loans, which would earn interest depending on the payment terms. The longer the payment term, the higher the interest would accrue on the loans. This provides more leeway for dealers on their profit.

Cash payments, on the other hand, leaves little margin for dealers. There is also the commission to the sales agent.

Usually, automotives sales are 70 percent financing and 30 percent cash payments. This is because of the magnitude of the amount involved in buying a unit. This time, however, some Filipinos can already afford to pay in cash. This is also one way of avoiding interest payments.

Fe Perez-Agudo, president and CEO of Hyundai Asia Resources Inc. said that such complaints complaints, "may not be 100 percent true" but she refused to elaborate.

Agudo said its sales is 20 percent cash and 80 percent financing.

Text messages to motorcycle firms, however, were not answered. Atty. Rommel Gutierrez, president of the Chamber of Automotive Manufacturers of the Philippines Inc., did not also return the text messages.

The auto and motorcycle sales practice is one blot on the otherwise peaceful consumer protection side as Domingo reported steady prices of commodities because of stable supply.

The Bill of Rights for airline passengers is being finalized which is going to incorporate some of the DTI inputs to protect the riding public from unfair promotional practices.

In fact, he said, that the domestic economy enjoys the best of both worlds for having low inflation environment and strong growth.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting