Q1 results chase auto industry’s dream

The Philippine automotive industry has a dream: to sell 500,000 motor vehicles by year 2020.

Industry players call their dream Vision 2020, and it looked attainable at the close of 2016 when total sales of the Chamber of Automotive Manufacturers of the Philippines, Inc. ( CAMPI), Truck Manufac- turers Association ( TMA), and the Association of Vehicle Importers and Distributors ( AVID) added up to 417,356 vehicles.

CAMPI has 17 member companies representing 19 global automotive brands, while AVID has 16 members representing 23 world- famous, mostly luxury brands.

This means that 42 automotive brands are fighting for market share in a developing country like ours where motorization has just begun and where the number of vehicles sold each year is the smallest in Southeast Asia.

It’s puzzling that car brands from all over the world continue to arrive and conduct business here.

They probably foresee an increasingly growing market for their products due to steady economic growth, a population boom in the absence of family planning, the government’s massive new infrastructure program, and the attractive auto loan packages offered by many commercial banks.

Q1 CAMPI and AVID sales

The industry’s bullishness is based on surging sales figures overall.

For the first quarter of 2017, CAMPI and TMA claimed total sales of 94,026 units, a record 23 percent increase over last year’s sales of 76,473 units in the same period.

“The Philippine automotive industry has, thus far, continued the path of motorization,” CAMPI president Rommel Gutierrez, who is 1st vice president of Toyota Motor Philippines Corp., said.

“While the first quarter performance gives us reason to be optimistic, we are still cautious about our own target for the year,” he added.

AVID announced that from January to March 2017, AVID members sold 23,312 units, 10 percent more than the 21,160 in the first quarter of 2016.

“Riding on sustained demand in the automotive market, AVID’s sales growth story continues its upward trend as it picked up by 10 percent for the three- month period in 2017,” AVID president and concurrent Hyundai Asia Resources, Inc. CEO Ma. Fe Perez- Agudo, said.

“This encouraging response further drives AVID to deliver topnotch products and services to our beloved customers,” she added.

If you add up CAMPI/ TMA’s 94,026 units to AVID’s 23,312, you come up with 117,338 vehicles sold in the first quarter alone.

Counted twice

But before celebrating, remember that both CAMPI and AVID include in their total sales count the digits of Ford Motor Co, Philippines, Suzuki Philippines, Inc.( SPI) and Auto Nation Group ( ANG), the importer/ distributor of Mercedes- Benz, Chrysler, Dodge, and Jeep.

Therefore the 117,338 yearto- date ( YTD) 2017 grand total is misleading since the sales figures of Ford, SPI and ANG are counted twice.

AVID claims Ford, SPI and ANG are members, same as CAMPI except that in the case of ANG, CAMPI includes only the Mercedes- Benz division’s sales data.

Whatever the reason why these three brands— Ford, Suzuki and MercedesBenz— are, in effect, members of both CAMPI and AVID, we just have to count the sales figures of Ford ( 7,773), Suzuki ( 4,051) and ANG MercedesBenz ( 344) only once to arrive at an accurate grand total.

Result: the YTD 2017 grand total is 105,170 units sold.

Higher excise taxes

If quarterly sales continue at this pace, boosted by the annual shopping splurge of the Christmas season, Vision 2020, or the goal to sell half a million cars by the year 2020, looks doable.

However, Vision 2020 is threatened by the government’s tax reform package, now pending in Congress, that includes increasing the excise tax rates on new car purchases.

The industry was optimistic that Vision 2020 would be achieved mainly through the Comprehensive Automotive Resurgence Strategy ( CARS) program.

Now, its implementation could be derailed by the Department of Finance’s tax restructuring proposal.

CAMPI and AVID have submitted a position paper to lower the excise tax rate increases, but the approval of their request looks bleak.

In the short term, the looming excise tax hike benefits the industry by compelling consumers to buy now before Congress approves it.

Yet, when it does become law, the fresh investments worth $ 1.2 billion required under the CARS program will be restudied by existing and future investors, the generation of 200,000 new jobs may not be realized, and new economic activity estimated at P300 billion may not take place.

Top 10 Q1 performers

The brands that made it to the top 10 for Q1 2017 are the same players in the top 10 2016 list, but the fifth and sixth slots have changed.

( See Table 1 for the list of the top 10 performers in Q1 2017, culled from the CAMPI and AVID reports.)

Let us begin with the carmakers who have retained the top four places: Toyota, Mitsubishi, Hyundai and Ford.

Toyota eyes 16th triple crown

In CAMPI’s 2016 annual sales report, Toyota Motor Philippines ( TMP) not only increased its market share to 43.32 percent, it also cornered seven of the 10 top slots in the hierarchy of nameplates.

In Q1 2017, TMP’s market share dipped ever so slightly to 43.20 percent, but that would hardly imperil Toyota’s reign as triple crown champion, going forward to its 16th year as such this year.

Top 10 nameplates

As evidence, six Toyota nameplates dominate the list of top 10 nameplates. ( See Table 2.)

Notice that mini subcompacts— the Toyota Wigo, Mitsubishi Mirage G4, and Ford Everest SUV— are missing from the list of the top 10 nameplates of Q1 2017.

In 2016, the Wigo was fourth, and the Mirage G4 was seventh.

The Wigo, Mirage G4 and Everest have been replaced by three non- Toyotas, two of which made it to this list for the first time: the Mitsubishi L300 ( sixth) and Hyundai Accent subcompact ( seventh).

In fifth place now, the Mitsubishi Montero Sport marks its reentry in the top 10 nameplates list after missing out in 2016.

In 2015, the Montero Sport was sixth in the list.

Montero Sport bounces back

The return of the Montero Sport in the this year’s first quarter top 10 nameplates means that it has bounced back from the SUA ( sudden unintended acceleration) issue that dogged its preceding model.

The controversy evaporated after an independent automotive testing lab in the United Kingdom dismissed the complaints as mechanically unfounded.

In Q1 this year, the Montero Sport outsold the Isuzu mu- X, the Ford Everest, and the Chevrolet Trailblazer by large margins.

Montero Sport sales totaling 2,007 units in March 2017 was the highest monthly sales for the nameplate since its intro in the Philippines.

In terms of total vehicle sales, March also set a new monthly sales record for Mitsubishi Motors Philippines Corp. ( MMPC) with 6,822 units sold.

Compared to the same month last year, MMPC gained a 38.3 percent growth.

Things are looking up for MMPC with the recent rollout of the first locally manufactured Mirage, MMPC’s participation in the Comprehensive Automotive Resurgence Strategy ( CARS) program.

This time, MMPC was ahead of Toyota, which is slated to roll out next year the first locally manufactured Vios, its participating vehicle in CARS.

Hyundai widens lead over Ford

In our 2016 annual industry report listing the top 10 performers, Hyundai Motor snatched the coveted third spot from Ford Motor Philippines by selling seven more vehicles than the American brand.

Since then, industry pundits have been closely watching the two rivals’ monthly sales reports to see which one had momentarily gained the upper hand.

In Q1 this year, Hyundai consolidated its hold on third place by increasing its lead over Ford from last year’s seven vehicles to 1,068.

Both the CAMPI and AVID 1st quarter 2017 reports state that Ford sold 7,773 vehicles YTD while the AVID report declares that Hyundai Asia Resources sold 8,841 units YTD.

Hyundai thus scored an impressive 18 percent increase over its Q1 2016 performance of 7,469 units, and in the process left Ford behind by more than a thousand units.

Hyundai’s best- selling nameplate, the Accent, is second only to perennial overall sales leader Toyota Vios in subcompact segment sales.

The Accent beat Honda’s City, Kia’s Rio and Toyota’s Yaris.

The Accent’s advantage is that consumers can choose a diesel- fed hatchback or a petrol sedan, both fashioned with Hyundai’s signature Fluidic Sculpture design.

In Q1 this year, 3,835 units of the Accent were sold, more than a thousand units more than the City ( 2,055) and the Nissan Almera ( 1,098.)

Too bad Mazda, Kia, and Suzuki wouldn’t reveal their sales figures per model as we can’t know whether the Mazda2 SkyActiv or Suzuki Swift cut into the Accent’s subcompact market share.

Aside from the Accent, the Eon mini subcompact ( 1,856 units sold) and the Grand Starex minivan ( 1,032) were Hyundai’s best sellers during the January- March 2017 period.

Ford’s top 3 sellers

Ford Philippines’ efforts to regain third spot in the top 10 performers’ list seem to be hampered by not having enough Everest units to meet market demand.

In Q1 2016, months after the all- new Everest launch in Manila in September 2015, sales soared to 3,530 units.

In Q1 this year, however, Everest sales dropped by 23 percent to 2,720 units, relegating the marque to fourth place in the top 5 midsize SUVs/ crossovers list.

Fortunately, Ford has enough stock to keep the popular EcoSport subcompact crossover moving out of showrooms as sales rose 35 percent from 1,830 units in Q1 2016 to 2,467 in Q1 this year.

The EcoSport thus retains first place in the list of the Top 5 subcompact SUVs/ crossovers.

Sales of the Ranger pickup have increased 22 percent, from 1,771 in Q1 2016 to 2,153 in Q1 2017, making the Ranger the second best- selling pickup YTD after the Toyota Hilux ( 3,067 units).

Every month, Ford Philippines releases to the media the retail sales figures of only these three top sellers, all of which are pickup platform vehicles except for the small EcoSport.

Ford’s silence about the retail sales of its passenger cars ( PCs) implies that they don’t sell as well as the LCVs.

Indeed, AVID’s report discloses that Ford sold only 187 PCs in Q1 this year, and 344 in the same period last year.

Compare the 187 and the 344 to the 7,586 Ford LCVs sold in Q1 2017 and the 7,532 Ford LCVs sold in Q1, and the logical conclusion is that SUVs and pickup trucks are Ford’s strengths.

Honda overtakes Isuzu

Honda Cars Philippines, Inc. ( 7,356 units sold) dislodged Isuzu Philippines Corp. ( 6,522 units) from the magic 5 in Q1 2017 by grabbing fifth place this year from sixth place in 2016 during comparative first quarters.

Apparently, the hot new Civic RS Turbo and Civic 1.8 E, the BR- V subcompact crossover and amazingly, the Brio Amaze mini subcompact have counterbalanced declining sales, due to the inadequate supply of the City, Mobilio, CR- V, and Jazz.

Honda has every base covered by offering a new model for almost every market segment or category with the exception of a pickup truck ( the Ridgeline, Honda’s pickup, is sold in North America).

Isuzu is not the only carmaker that Honda upset during this year’s period under review.

The Toyota Corolla Altis, which had been comfortably ruling the top 5 list of compact cars in 2016 and 2015, was suddenly ejected from no. 1 position by the all- new Honda Civic.

One thousand one hundred thirty- three Civics were sold YTD, compared to only

914 Corolla Altis units.

The 2017 Civic, particularly the RS Turbo, is the hottest compact car in town.

The Civic’s surge makes Toyota fans wish that a turbocharged Corolla Altis TRD ( Toyota Racing Development) will be marketed soon.

Isuzu’s consistent best seller

Isuzu, on the other hand, continues to offer only three models: the mu- X midsize SUV, the D- Max pickup, and the Crosswind AUV, aside from its Category III- V heavy duty commercial trucks.

The Crosswind is reportedly being phased out because it does not comply with the country’s Euro 4 emission standard.

The D- Max was Isuzu’s best- selling nameplate in Q1 2017, rumored to be so because there were not enough mu- X units available to meet market demand.

Whatever, the Isuzu mu- X managed to hang on to 10th place in the top 10 nameplates’ list for Q1 2017.

Nissan continues to occupy seventh place, Suzuki at eighth, Kia a distant ninth, and Chevrolet at 10th in the top 10 performers list for Q1 this year.

Nissan’s 45% growth

Nissan Philippines, Inc. ( NPI) scored an impressive 45 percent increase in total sales in the first quarter this year compared to the same yearago period: 5,277 units in Q1 2017 versus 3,645 in Q1 2016.

NPI’s top three sellers in Q1 2017 were the Urvan ( 1,651 units), Navara pickup ( 1,638 units), and Almera subcompact sedan ( 1,098 units), with the funky Nissan Juke compact crossover ( 710 units) poised to surpass the 1,000 units- per- quarter mark.

This year, NPI will capitalize on the Urvan’s success by launching a more spacious 15seat variant called the Urvan Premium, featuring many of the creature comforts and interior amenities of higherpriced rivals.

Ertiga leads Suzuki sales

Following company policy, Suzuki Philippines, Inc. ( SPI) did not reveal the sales data per model of its fourwheeled motor vehicles.

However, the CAMPI quarterly report tells us that SPI sold 4,051 units in Q1 2017 versus 3,048 in Q1 2016 for a 32.9 percent growth.

In March 2017, SPI sold 1,505 units versus 1,077 in March 2016 for a 30.7 percent variance.

The AVID quarterly report reveals that in Q1 2017, SPI sold 1,985 passenger cars compared to 1,621 in the same period last year.

Add to this the 2,066 LCV ( light commercial vehicle) sales of SPI and you come up with 4,051 units, same as CAMPI’s computation of Suzuki total vehicle sales.

AVID’s report reflects the continuing upward trend of LCVs ( sport utility vehicles, multipurpose vehicles, minivans, pickup trucks) compared to PCs ( passenger cars.)

SPI says that its top- selling models are the Ertiga AUV, sales of which grew 60 percent in Q1 2017 compared to the same year- ago period; the Jimny mini compact SUV, with a 21- percent growth year- on- year, and the APV ( All Purpose Vehicle), with a 15- percent growth.

Kia’s zero YTD

Kia, which according to industry scuttlebutt has been challenged by the inadequate supply of its popular nameplates like the Carnival, is expected to recover lost ground when it launches the all- new Picanto this year.

The staff of Columbian Autocar Corp., the importer/ distributor of Kia vehicles, did not send any sales figures, not even growth percentages, despite numerous e- mails, text messages and phone calls from our part.

This was surprising since last January, Kia readily submitted the requested sales data per model for the Philippine Daily Inquirer’s 2016 auto industry annual report.

Anyway, according to CAMPI’s Q1 2017 report, the year- to- date 2017 sales of Kia were the same ( 1,536 units) as in Q1 2016 for zero percent YTD variance.

Kia’s March 2017 figures were better compared to March 2016: 517 versus 452 units for a 14.4 percent variance month- to- date ( MTD).

New Chevy Spark coming up

The Covenant Car Company, Inc. ( TCCI), the importer/ distributor of Chevrolet and a member of AVID, was more cooperative and supplied the information requested.

TCCI reported that a total of 1,405 Chevys were sold this first quarter compared to 1,463 in the same year- ago period.

MTD ( March 2017) figures are 567 units versus 575 in March 2016.

The Trailblazer midsize SUV remains Chevrolet’s best- seller, with the Sail subcompact sedan at second, and the Colorado pickup at third.

Chevy aims to ramp up sales this year when it introduces the all- new Spark mini subcompact, which was displayed at the Manila International Auto Show ( MIAS) last month.

Top 5 nameplates in 10 segments

The remaining tables accompanying this article shows the top five nameplates in each of 10 market segments.

Data was made available from the CAMPI and AVID first quarter reports and some of the car companies.

Keep in mind, however, that the absence of per model sales data from Kia, Mazda, and Suzuki gave us no recourse but to exclude them from these tabulations.

Summing up

The first quarter 2017 sales report of the auto industry confirms that things are still on the uptrend.

Yet, as CAMPI president Rommel Gutierrez said, the first quarter performance gives us reason to be optimistic, but “we are still cautious about our own target this year.”

Coming from the 1st vice president of Toyota, a 15- year triple crown champion, those words are significant.

Meanwhile, let’s forget about the tax reform package for now and march on to Vision 2020.