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Most major European equity indices closed higher, APAC markets
were mixed, and all major US indices closed lower. US and benchmark
European government bonds closed sharply higher. European iTraxx
and CDX-NA closed wider across IG and high yield. The US dollar,
natural gas, oil, gold, silver, and copper all closed lower on the
day.
Please note that we are now including a link to the profiles of
contributing authors who are available for one-on-one discussions
through our Experts
by IHS Markit platform.
Americas
All major US equity indices closed lower; DJIA -0.5%, Russell
2000 -0.8%, S&P 500 -1.4%, and Nasdaq -2.5%.
10yr US govt bonds closed -5bps/1.70% yield and 30yr bonds
-5bps/2.04% yield.
CDX-NAIG closed +2bps/53bps and CDX-NAHY +8bps/307bps.
DXY US dollar index closed -0.1%/94.79.
Gold closed -0.3%/$1,821 per troy oz, silver -0.2%/$23.16 per
troy oz, and copper -0.7%/$4.55 per pound.
Crude oil closed -0.6%/$82.12 per barrel and natural gas closed
-7.4%/$4.01 per mmbtu.
Solar power will account for nearly half of US generation
capacity installations in 2022, more than natural gas and wind
power combined, according to the US Energy Information
Administration (EIA). Based on surveys of utilities and independent
power producers, EIA said it expects 46.1 GW of utility-scale
generating capacity to be added to the US power grid in 2022, of
which 21.5 GW (46%) will be solar. Natural gas will contribute 9.6
GW (21%), wind 7.6 GW (17%), and 5.1 GW (11%) will come from the
fast-emerging category of battery power. (IHS Markit Net-Zero
Business Daily's Kevin Adler)
When 2.2 GW of nuclear power is included from two units coming
onstream at Southern Company's Vogtle Electric Generating Plant in
Georgia, carbon-free power will account for nearly 80% of US
installations in 2022, marking a significant step towards the
country's goal of transitioning to only clean energy production by
2035.
Growth can be further accelerated by supportive federal policy,
Hensley said. "This growth can be accelerated with the passage of
the Build Back Better Act coupled with the infrastructure
package—putting the country in a better position to meet
climate targets and deliver clean energy to Americans," he
said.
"Wind, solar, and battery storage have been the top choice for
new power capacity for six of the last seven years in the US," said
John Hensley, vice president for research and analytics at The
American Clean Power Association, a US trade group."Falling costs,
improving efficiency, and customer demand support the strong growth
this industry is experiencing, and we expect those drivers to
continue shaping the energy transition underway," he added.
Build Back Better is the Biden administration's $1.75-trillion
spending plan that would include about $550 billion in incentives
and loans for a wide range of renewable energy, from electric
vehicle tax breaks to investments in transmission lines to
extensions of tax credits for new wind and solar projects. The bill
has been held up in the US Senate for several months due to
objections raised about its overall price tag by US Senator Joe
Manchin, Democrat-West Virginia, and is likely to be subject to
significant modifications if it is passed at all.
Federal Reserve governor Lael Brainard, the White House nominee
to serve as the central bank's No. 2 official, told Congress that
efforts to reduce inflation are the central bank's "most important
task." The Fed's rate-setting committee "has projected several
hikes over the course of the year. We will be in a position to do
that as soon as asset purchases are terminated," said Ms. Brainard.
"And we will simply have to see what the data requires over the
course of the year." (WSJ)
The Supreme Court on Thursday (January 13) blocked the Biden
administration from imposing a COVID-19 vaccine-or-test mandate on
large businesses, ruling the Occupational Health and Safety
Administration (OSHA) lacked authority to impose the underlying
rule. The 6-3 decision stays the rule and sends the legal dispute
back to the US Court of Appeals for the Sixth Circuit. The ruling
by the conservative majority of the court is likely a death knell
for the mandate, which the White House has called critical to
reining in the spread of COVID-19. "Imposing a vaccine mandate on
84 million Americans in response to a worldwide pandemic is simply
not 'part of what the agency was built for,'" the majority wrote in
an unsigned opinion. The court said that although COVID-19 is a
risk that occurs in many workplaces, it is not a universal
occupational hazard. (IHS Markit Food and Agricultural Policy's JR
Pegg)
US producer prices for final demand increased 0.2% in December
and rose 9.7% from a year earlier. The overall increase was the
smallest since November 2020, but it was an anomaly rather than a
fundamental shift. Energy goods, up over 31.4% in the past 12
months, sagged by 3.3% as Omicron variant fears hit the crude oil
market. Food prices cooled by 0.6% but that decline was less than
half of the November gain and monthly moves in food prices are as
reliable as a $2 watch. Core goods prices rose 0.5%. (IHS Markit
Economist Mike Montgomery)
Final demand prices for services grew 0.5% in December but the
November gain was revised 0.2 percentage point higher.
Transportation and warehousing prices climbed 1.7% with airfares
and air freight rates causing the outsized gain. The other services
complex scored a 0.2% gain with car rental prices sagging.
The decline in energy prices was purely temporary. As of 13
January, Brent crude spot prices were just under $85/barrel, above
both the October and November prices and more than $10 higher than
in December. The 3.3% December energy blip will end up a total
quirk as the drop was founded almost exclusively on fears that the
Omicron variant would crimp demand for oil. Those fears have proven
exaggerated.
Seasonally adjusted US initial claims for unemployment
insurance rose by 23,000 to 230,000 in the week ended 8 January.
Despite moving higher in the latest reading, the level of claims
remains low as employers are trying to retain existing employees
amid tight labor markets. (IHS Markit Economist Akshat Goel)
Seasonally adjusted continuing claims (in regular state
programs) fell by 194,000 to 1,559,000 in the week ended 1 January,
hitting its lowest since 2 June 1973. The insured unemployment rate
fell 0.2 percentage point to 1.1%.
Ongoing claims for Pandemic Emergency Unemployment Compensation
(PEUC) and Pandemic Unemployment Assistance (PUA) will no longer be
published with this news release. There was a total of 255,142
claims under PEUC and PUA in the week ended 11 December—the
last week data are available for. According to the Department of
Labor, any ongoing claims under these programs represent claims for
weeks of unemployment prior to the two programs' expiration on 6
September 2021.
In the week ended 25 December, the unadjusted total of
continuing claims for benefits in all programs rose by 226,264 to
1,948,624.
Nuro has unveiled its third-generation electric autonomous
delivery vehicle to scale its services to consumers across the
United States. The new flagship model, called Nuro, is designed to
carry more goods and enable more deliveries. The new model will be
manufactured in partnership with BYD North America and it will be
completed at Nuro's new USD40-million manufacturing facility in
southern Nevada. Nuro has also reached an agreement with existing
retail-chain partner Kroger to use its third-generation vehicle in
grocery deliveries. Nuro has been testing its autonomous system on
the R1 vehicle and its updated version of the R2 via partnerships
with retail companies such as Walmart, Kroger, 7-Eleven, and CVS
Pharmacy, as well as via partnerships for parcel deliveries with
Federal Express and food deliveries with Domino's Pizza. Delivery
services are an attractive option among many potential business use
cases for autonomous vehicles. The expectation is that, eventually,
elimination of the cost of a human driver could make delivery
services far more affordable for both the merchant and the
consumer. (IHS Markit Automotive Mobility's Surabhi Rajpal)
Electric vehicle (EV) startup Lucid Motors is in talks on
beginning production in Saudi Arabia by 2025 or 2026, following the
company starting production of the Lucid Air sedan in the United
States in 2021, according to media reports. During an interview on
the Bloomberg television channel, Lucid chairman Andrew Liveris
said, "Now that we are successfully producing and selling cars in
the US, our attention is turning to this factory here [in Saudi
Arabia]." According to a Bloomberg report, the executive was
speaking at a Bloomberg mining conference in Riyadh, Saudi Arabia.
Liveris said that the outstanding details to be resolved include
ownership percentages for Lucid and the partners on the project. A
site near the city of Jeddah is a potential location for the
proposed plant, as is a site in the city of Neom, reports
Bloomberg. Liveris also reportedly commented on the supply chain
issues continuing to affect the auto industry, saying, "We'll have
a lot more to say to the market about the sorts of things we're
seeing in the supply chain. Yes, we're experiencing supply chain
issues." Previous reports have indicated that Lucid has been in
talks with Saudi Arabia's sovereign wealth fund, the Public
Investment Fund. Lucid began production of the Air sedan in
September 2021 and made the first deliveries in October. IHS Markit
forecasts, prior to reports of the potential second production
facility, showed Lucid's production reaching 94,000 units per year
in 2028. (IHS Markit AutoIntelligence's Stephanie Brinley)
Plastic is key to present and future sustainability goals,
US-based trade group the Plastics Industry Association said in a
statement late last week. The trade group rejected findings in a
report by advocacy group Beyond Plastics, cited in The Atlantic,
claiming plastics production could have greater emissions than
coal-fired power plants by the end of this decade, which it said
ignores context. (IHS Markit Chemical Market Advisory Service's
Chuan Ong)
The Plastics Industry said that an increasing prevalence of
natural gas and other renewable energy sources cut US coal
dependence by 50% from 2011 to 2021.
It said plastics are widely used across the economy and hence
account for higher emissions, and cannot be compared to coal, or to
lesser utilized materials like glass. "Substituting all plastic
bottlers with glass would create carbon dioxide emission equivalent
to 22 large coal-fired power plants," the group said, quoting a
research paper by the Imperial College London.
The trade group also said that moving away from plastics calls
for materials with more emissions-intensive production processes,
adding that aluminum production has 30% more emissions than
plastics, while iron, steel, and concrete's production emissions
can exceed plastics' by up to 200%.
Life-cycle assessment (LCA), a way of assessing environmental
impacts associated with all life cycle stages of a product, also
showed sustainability gains in plastics, the trade group said.
Citing a study published on its own portal, the group said
plastics are the most environmentally beneficial material compared
to alternatives. It said plastic straws have over 60% less global
warming potential, using 50% less energy during production than
alternatives, and said similar figures apply for both plastic bags
and plastic packaging.
Europe/Middle East/Africa
Most major European equity markets closed higher except for
France -0.5%; Spain +0.5%, Italy +0.5%, UK +0.2%, and Germany
+0.1%.
10yr European govt bonds closed higher; Italy -4bps and
France/Germany/Spain/UK -3bps.
iTraxx-Europe closed +1bp/51bps and iTraxx-Xover
+4bps/253bps.
Brent crude closed -0.2%/$84.47 per barrel.
UK recruitment agencies reported a further strong rise in the
number of people placed in permanent jobs in December, the rate of
hiring running close to the record highs seen in prior recent
months. The survey data, compiled by IHS Markit for the REC and
KPMG, suggest that companies continued to take on impressive
numbers of staff despite the rising spread of Covid-19 amid the
emergence of the Omicron variant. (IHS Markit Economist Chris
Williamson)
Demand for staff from employers reportedly also continued to
rise at a rate not seen over the two decades prior to the pandemic,
albeit with the rate of growth of demand cooling further from
July's recent peak to run at the lowest since April. This latest
cooling will in part have reflected lower economic activity in
December arising from the omicron spread. Note that business
activity, as measured by the PMI, grew at the slowest rate since
the lockdowns at the start of the year.
At the same time, staff availability continued to deteriorate
at a rate rarely exceeded in the recruitment survey's 24-year
history, albeit below the rate of deterioration seen in
mid-2021.
Average starting salaries and average pay for temp/contract
staff rose steeply again in December. For permanent salaries, only
in October and November 2021 had the recruitment industry survey
ever recorded a stronger rate of wage inflation than that seen in
December.
Such a lack of available staff is not surprising. The latest
available official data show that the number of unfilled vacancies
had risen to 1.2 million in the three months to October, while
unemployment was down to 1.4 million; an implied record low ratio
of job seekers to vacancies, pointing to a tight labour market
which is conducive of course to high wage growth.
EDF Renewables and DP Energy have entered into a joint venture
partnership to develop the Gwynt Glas project off England and
Wales. The floating wind project is estimated to encompass 1,500
square kilometers in the Celtic Sea, 70 kilometers off the coast,
and will generate up to 1 GW of electricity. Preliminary work has
begun to engage key stakeholders, and remote aerial surveys are
being carried out for wildlife activity. (IHS Markit Upstream Costs
and Technology's Melvin Leong)
IHS Markit provides an overview of key agri-food sustainability
trends to watch out for in 2022. This year could see a big step
towards a more sustainable food system - if businesses and
policymakers turn their words into actions and show that their on
the right path forward. Pressure to deliver is growing after the
world's governments agreed at COP26 that limiting global warming to
1.5°C requires "rapid, deep, and sustained reductions in global
greenhouse gas (GHG) emissions" - with most legislators identifying
agriculture as a top focus area to achieve this goal. (IHS Markit
Food and Agricultural Policy's Steve Gillman)
Methane momentum building: Pressure to act is likely to grow in
2022 after a recent UN report on methane showed reducing this
greenhouse gas is "very likely the strategy with the greatest
potential to decrease warming over the next 20 years". This already
propelled over 100 countries to sign up to the Global Methane
Pledge at COP26, where they committed to reducing their emissions
by 30% by the end of the decade. Agriculture is responsible for
roughly one-third of climate emissions, and as the world shifts
toward eating more meat that proportion may go up. However,
eliminating these emissions is scientifically impossible if methane
from ruminants and nitrous oxide from manure decomposition continue
at its current rate of growth.
Carbon farming foundations: Environmental pressures will see
hopes grow around carbon farming and its potential to generate new
and green revenues for the agriculture sector - if they can
eventually sell the amount of greenhouse gases stored in soils to
green-minded organizations. According to Rabobank, about one ton of
CO2-equivalent can be removed from the atmosphere per hectare of
farmland each year, which also presents a lucrative economic
opportunity if carbon farming practices are rolled out. However,
Barbara Baarsma, CEO of Rabo Carbon Bank, said more farmers need to
adopt more climate-friendly practices for any related profits to
materialize.
Steps to scale sustainability: Whether its government schemes
or corporate programmes, sustainable farming pilots are found in
most agriculture sectors, and in most markets, but the diversity of
farm systems means wide-scale adoption of tried-and-tested
solutions still struggle to materialize at the needed scale. Along
with carbon farming, next year will see greater pressure to attract
more farmers to join successful pilot projects, from boosting
biodiversity to precision practices, and some industry leaders have
already begun to see a clear path forward.
Scope 3 collaboration: The push for more data is also coming
from agri-food companies because they want to see greater progress
towards reducing emissions in their supply chains, commonly
referred to as scope three. Each year, more companies commit to net
zero emissions through the UN science-based targets initiative
(SBTi) and the approval process requires companies to commit to
reducing supply chain emissions.
Deforestation fight: The focus on supply chain emissions next
year will also reinforce discussions around sustainable sourcing of
raw materials, particularly to prevent contributing to
deforestation. This will continue to affect many agri-food
stakeholders and create stronger sustainability links between the
likes of manufacturers and processors with brands and
supermarkets.
Plant-based foods: A lot of the sustainable food trends of 2022
can be concentrated in a single market segment - plant-based foods.
And over the next twelve months, sustainability stakeholders will
be carefully watching the growth of plant-based products to see if
the sector can move from a niche position to a place where it can
significantly push the food system back within planetary limits. US
retail sales of plant-based foods have continued to grow in recent
years, increasing by 27% in 2020 and bringing the total plant-based
market value to $7 billion, according to the Good Food
Institute.
Sustainable pricing wars: With more environmental expectations
falling on farmers, next year will see pressure also fall on brands
and retailers to pay food producers more for sustainable food. Some
brands have already committed to this, such as Pepsico, while
Compass CFO Palmer Brown acknowledges that pricing levels may need
to evolve, but he said this can be difficult as their industry
operates on thin profit margins. In the meantime, he said food
companies can take actions to help send more profitable signals to
the farm.
True cost of food: Answers on a fair price for food will need
to be found sooner than later as the cost of increasing
sustainability could create an economic blockade, one that slows
down both green policies and corporate strategies.
Sustainable labelling battlegrounds: Communicating to consumers
through branding may be a more favored approach than changing food
prices, but this is likely to evolve on its own over the next
twelve months either way.
European vehicle leasing firm Arval has partnered with
software-as-a-service (SaaS) solution provider Ridecell to develop
end-to-end mobility solutions. According to a company statement,
this partnership will enable Arval to meet mobility needs of its
customers across Europe by offering Ridecell's fleet automation and
mobility platform. Arval customers using Ridecell's car-sharing
platform will benefit from value-add services including a
decentralized and convenient booking system and automated
operations. The partnership will also support the recently launched
Arval Mobility Hub concept, which combines shared mobility options,
including car, bike, and micro-mobility solutions, in one location.
Ridecell offers a platform for car sharing, ride sharing, and
autonomous fleet management. The company says that its shared
mobility platform helps companies make their fleets operational
rapidly, as well as maximizes efficiencies. (IHS Markit Automotive
Mobility's Surabhi Rajpal)
Energinet expects that if biogas production continues to grow,
the fuel will be able to meet 75% of Denmark's gas consumption in
2030 and all of it by 2034. Biogas' share of total Danish gas
consumption reached 25% in 2021, up from just over 21% in 2020,
said state-owned Energinet, the country's system operator for
electricity and natural gas. (IHS Markit Net-Zero Business Daily's
Cristina Brooks)
The network operator welcomed the role of increased biogas
supplies in lowering its gas network's CO2 emissions, a result of
more biogas-producing plants connecting to networks.
Denmark has promoted the use of biogas through public
subsidies, including as a fuel for transportation as well as for
electricity and gas networks, aiming for targets obligated by the
EU's Renewable Energy Directive. In 2020, it halted subsidies for
new production plants, but kept subsidies intact for existing
plants through 2032.
More and more biogas plants are connecting to the gas
transmission and distribution system, or 51 since 2016. For
example, Sønderjysk Biogas Plant Bevtoft, an anaerobic digestion
plant that uses manure and straw, was connected to the system that
year.
President Abdel Fattah El-Sisi has announced that Egypt will
produce its first locally assembled electric vehicles (EVs) in
2023, reports MistNews. According to the source, this news comes
after the negotiations with Dongfeng to locally assemble its E70
cars fell apart in November 2021. In December 2021, Egypt ordered
El Nasr Automotive Manufacturing, a state-owned company, to work
with a Chinese firm to build affordable EVs priced at EGP315,000.
Egyptian authorities have approached three potential Chinese
companies to partner with to build the affordable EV, with El Nasr
aiming to invest EGP2 billion. The vehicle's production is planned
to start in 2023 with annual output expected to rise to 20,000
units in three years. The government has also set an aggressive
target of setting up least 3,000 charging stations in three years.
(IHS Markit AutoIntelligence's Tarun Thakur)
South Africa's real seasonally adjusted manufacturing
production grew by 3.7% month on month (m/m) during November 2021.
However, the m/m gain in November was not enough to leave real
seasonally adjusted manufacturing production up from a year
earlier, which fell by 2.5% y/y, following a 7.7% y/y contraction
in October. (IHS Markit Economist Thea
Fourie)
Sectors showing the strongest m/m gains during November
included basic iron and steel, non-ferrous metal products, metal
products and machinery (up 17.2% m/m), followed by electrical
machinery (up 14.1% m/m) and motor vehicles, parts and accessories
and other transport equipment (up 12.1% m/m). Lower output in the
food and beverages sector and the petroleum, chemical products,
rubber, and plastic products sector were a drag on the
manufacturing sector's overall performance during November.
South Africa's seasonally adjusted manufacturing sales grew by
7.6% m/m in November 2021, with the biggest gains recorded in basic
iron and steel, non-ferrous metal products, metal products and
machinery, followed by motor vehicles, parts and accessories and
other transport equipment.
Asia-Pacific
Major APAC equity indices closed higher; Australia +0.5%, India
+0.1%, Hong Kong +0.1%, South Korea -0.4%, Japan -1.0%, and
Mainland China -1.2%.
Mainland China's consumer price index (CPI) increased by 1.5%
year on year (y/y) in December 2021, down by 0.8 percentage point
from the November reading, according to the National Bureau of
Statistics (NBS). Month-on-month (m/m) CPI declined by 0.3%,
falling into deflation territory from the 0.4% m/m inflation in
November. (IHS Markit Economist Lei Yi)
The disinflation of headline CPI in December was largely driven
by the weakened food and fuel prices. Compared with an increase of
1.6% y/y in November, food prices fell by 1.2% in December, as pork
price deflation widened slightly by 4.0 percentage points to 36.7%
y/y while fresh vegetable price inflation eased by 20 percentage
points to 10.6% y/y thanks to ramped-up supply. Regarding the
non-food components, vehicle fuel price inflation came in at 22.5%
y/y, lower by 13.2 percentage points from the month before; while
service price inflation held up at 1.5% y/y, unchanged from the
November reading. Excluding the volatile food and energy
components, core CPI stayed at 1.2% y/y in December.
The producer price index (PPI) continued to report double-digit
gains of 10.3% y/y in December; still, this represented a second
month of moderation from the October high of 13.5% y/y thanks to
authorities' interventions. Month-on-month PPI registered deflation
of 1.2%, down by 1.2 percentage points from November.
Retreating commodity prices—crude oil and coal in
particular—contributed to the month-on-month PPI deflation in
December. Prices of oil-related sectors including petroleum
extraction and fuel and chemical product manufacturing re-deflated
month on month; while the coal mining and dressing sector
registered a wider price deflation of 8.3% m/m in December compared
with 4.9% m/m in the prior month. Energy-intensive sectors like
non-ferrous and ferrous metal smelting and pressing continued to
log month-on-month price deflation in December. On the other hand,
owing to the government allowing for a wider coal-fired power
tariff fluctuation range, prices of the power and heat production
and supply sector continued to recover, with m/m inflation inching
up consecutively since September and reaching 3.0% m/m in
December.
Chinese electric vehicle (EV) start-up Niutron revealed the
images of its first model, the NV, on 12 January. The model, a
larger sport utility vehicle, measures 4,915 mm long, 1,950 mm
wide, and 1,750 mm tall with a wheelbase spanning 2,900 mm. Two
variants, a battery electric model and an extended-range EV (EREV),
will be made available in the Chinese market. The model will have a
four-wheel drive as standard, enabling it to accelerate from still
to 100km/h in 5.9 seconds. Reservations for the NV will begin in
the first half of the year, with mass market deliveries slated to
kick off in China in September. Niutron launched its auto brand
Niutron on 15 December 2021. The company was founded by Li Yinan,
the founder of electric scooter company, Niu Technology. According
to local media reports, Niutron has secured an investment of USD500
million in the A round financing, which will help the company
progress with its vehicle launch plan. Production of the NV will
take place at Niutron's plant in Changzhou, Jiangsu province. (IHS
Markit AutoIntelligence's Abby Chun Tu)
South Korea's SK Geo Centric (SKGC) has signed an agreement
with US recycling company PureCycle to construct Asia's first
recycled polypropylene (PP) plant, according to a PureCycle press
statement late Monday. SKGC and PureCycle signed a non-binding head
of agreement (HOA), or term sheet, after agreeing to key terms to a
joint venture that will be further negotiated. (IHS Markit Chemical
Market Advisory Service's Chuan Ong)
This recycled PP plant will be built in Ulsan, South Korea,
with expected completion by end-2024. It is projected to have an
annual PP capacity of 60,000 mt/year.
PureCycle said that PP is commonly combined with other
materials and additives, limiting traditional mechanical recycling
from separating contaminants to produce "like-new" recycled
plastic. Contaminated food storage containers, colored detergent
bottles, and automotive interior plastic are mostly incinerated
because they are difficult to recycle.
Its technology can be used for commercial production to recycle
these into ultra-pure recycled (UPR), it said.
According to PureCycle, the cooperation with SKGC extends
beyond a joint venture to recycle plastic waste and provide South
Korea with UPR, but also to develop consumer products.
PureCycle states that it is the world's only company with
Procter & Gamble's solvent-based purification technology to
separate contaminants, odors, and colors from PP plastic waste, to
convert it to UPR, plastic suitable for any PP market.
The company had also signed a memorandum of understanding on
Sep. 13 last year with Japan's Mitsui & Co. to develop and run
a similar facility in Japan. Project details remain unclear.
SKGC, a petrochemical subsidiary of SK Innovation, had
announced on Jul. 8 last year its plans to invest KRW 600 billion
($506 million) in South Korea's largest plastic waste recycling
factory in Ulsan, which can process 184,000 mt of trash a year,
about 60% of the country's total plastic waste.
Vietnam's National Assembly has approved a supplemented and
amended special consumption tax law, officially reducing this tax
for electric vehicles (EVs) in the country, reports the Vietnam
News Brief Service. Battery electric vehicles (BEVs) with nine
seats or fewer carrying only people will be subject to a tax rate
of 3% from 1 March 2022 to 28 February 2027 and 11% from 1 March
2027. BEVs with 10-15 seats will be taxed at a rate of 2% from 1
March 2022 through to 28 February 2027, increasing to 7% from 1
March 2027. BEVs with 16-23 seats will be subject to a 1% tax rate
from 1 March 2022 to 28 February 2027, increasing to 4% from 1
March 2027. The tax rate for BEVs carrying people and goods will be
2% from 1 March 2022 to 28 February 2027 and 7% from 1 March 2027.
For other types of alternative-powertrain vehicles, the tax rate
will be 15% for passenger vehicles with nine seats or fewer, 10%
for passenger vehicles with 10-15 seats or people and goods
carriers, and 5% for passenger vehicles with 16-23 seats. (IHS
Markit AutoIntelligence's Jamal Amir)
New vehicle sales in the Philippines grew marginally by 0.9%
year on year (y/y) during December 2021 to 27,846 units, reports
Business World, citing data released by the Chamber of Automotive
Manufacturers of the Philippines Incorporated (CAMPI) and the Truck
Manufacturers Association (TMA). Sales of passenger vehicles stood
at 8,447 units during the month, down 3.8% y/y, while commercial
vehicle (CV) sales were up by 3.1% y/y to 19,399 units. Last
month's sales figure also represented a month-on-month (m/m)
increase of 5.3% from 26,456 units registered in November 2021.
During the full year 2021, total sales were up by 20.0% y/y to
268,488 units, comprising 85,260 passenger vehicles, up 22.4% y/y,
and 183,228 CVs, up 18.9% y/y. Toyota Motor Philippines continued
to dominate the vehicle market last year, taking a market share of
48.3% with sales of 129,667 units. It was followed by Mitsubishi
with a 14.0% market share and 37,548 units sold. Ford ranked third
in terms of market share with 7.5%, selling 20,005 units. The
strong growth in the Philippine new vehicle market during 2021 was
mainly due to a low base of comparison, a recovery in economic
growth, and the government's move to ease social and business
restrictions, which had been imposed to curb the growing number of
COVID-19 cases. However, the prolonged COVID-19 virus pandemic and
the provisional safeguard duty on imported passenger vehicles and
light commercial vehicles (LCVs) that was imposed earlier in 2021
did weigh down on the Philippine new vehicle market last year. (IHS
Markit AutoIntelligence's Jamal Amir)
Posted 13 January 2022 by Chris Fenske, Head of Capital Markets Research, Global Markets Group, S&P Global Market Intelligence
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