Auto industry seen to post 1st annual drop in 7 years
VEHICLE sales are expected to drop by 10-15% for the full year, as demand continues to be dampened by higher excise taxes, soaring inflation, and rising fuel prices.
“This year, down lahat. The market itself... We project 10% to 15% down,” Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) President Rommel R. Gutierrez told reporters on the sidelines of the 7th Philippine International Motor Show in Pasay City on Wednesday.
If realized, this would mark the first decline in full-year vehicle sales in seven years.
Data jointly from CAMPI and Truck Manufacturers Association (TMA) showed the groups’ member companies sold 425,673 vehicles in 2017, an 18.4% increase from 359,572 units in 2016. The domestic auto industry had recorded annual double-digit growth since 2012.
“Initially, we were expecting yung down will be first quarter, second quarter lang. Pero it continued,” Mr. Gutierrez said.
The CAMPI official, who is also a first vice-president at Toyota Motor Philippines Corp., said “a combination” of negative economic factors, such as high inflation and soaring fuel prices, prevented a rebound in vehicle sales in the second half of 2018.
“I think it was inflation that really kept us. Kasi at that time it wasn’t a factor,” Mr. Gutierrez added.
Inflation surged to a fresh nine-year high of 6.7% in September, bringing the nine-month average to 5%. Prices rose by an average of 6.2% during the July to September period.
For the first nine months of 2018, vehicle sales fell 13.8% to 261,057 units, from 302,869 units sold during the same period last year. In September, 31,116 units were sold, 9.7% lower than the 34,445 units sold during the same month in 2017.
“So we hope it will increase beyond that level by the end of the year,” Mr. Gutierrez said, that car sales are starting to pick up.
The September sales figure is a 2.6% increase from the 30,313 units sold in August. It was also the second consecutive month that vehicle sales showed month-on-month gains.
Asked if this shows the market is stabilizing, TMA President and CAMPI VicePresident Dante C. Santos replied in the negative. “It’s not a recovery, it’s the habit of buying... Maraming pera ang tao, may bonuses, OFW remittances,” Mr. Santos said. —