Car demand grows parallel with economic movement

The demand for cars will always be there as the economy continues to grow.

"Growth will be there. Parallel to the growth of the economy would also be a desire to own and part of that ownership is for vehicles," Juan Gregorio Syquia, chief operating officer of online vehicle marketplace Carmudi Philippines, said in an interview with journalists late Friday.

Kris Lim, marketing head, said: "The economy is doing well. And the salary of middle-income [people] is increasing."

While the present administration vows to address the traffic problem in key cities such as Manila and Cebu, it is also encouraging the revival of the auto manufacturing industry in the country through the Comprehensive Automotive Resurgence Strategy (CARS) program.

The increasing number of cars is partly blamed for the worsening traffic woes in major cities in the country.

CARS PROGRAM

The CARS program offers fiscal incentive of P27 billion, an amount to be divided among CARS participants that agree to produce 200,000 vehicles each over six years.

Recently, the Board of Investments granted Toyota Motors Philippines Corp. and Mitsubishi Motors Philippines Corp. the certificates of registration for the CARS.

The six-year CARS program is expected to draw P27 billion in fresh investments, manufacture 600,000 more vehicles, add P300 billion to the domestic economy – equivalent to 1.7 percent of gross domestic product – and generate up to 200,000 direct and indirect jobs into auto manufacturing, parts making, distribution and ancillary services, the BOI said.

The program also aims to resurge the automotive sector and make the country as a regional car manufacturing hub in Southeast Asia.

The program was authorized by former president Benigno Aquino III last year and is expected to boost the auto industry labor force, strengthen supply chain and attract additional investment.

Lim said they are looking into this program and at the same is hopeful of the government's promise to solve traffic woes through infrastructure development.

"Infrastructure would really decentralize bigger cities," Syquia said.

The high interest among the middle-income population to own cars is also partly blamed on the lack of fast and quality mass transport systems in the country.

In Cebu, a light railway transit (LRT) is being eyed to solve its worsening traffic problem.

Industry players and people from the business had been calling for a mass transit in Cebu to complement its growing economic activity and to raise its competitiveness.

President Rodrigo Duterte had announced plans to pursue railway projects in Metro Manila, Cebu and the other major key points.

SALES

Meanwhile, Carmudi expects that the auto industry is going to surpass its sales target this year.

In July, the auto industry sales rose 22 percent to 29,967 units sold from 24,569 units in the same month in 2015, according to data from the Chamber of Automotive Manufacturers of the Philippines Inc. and Truck Manufacturers Association.

In the first seven months of 2016, car sales grew 26.5 percent to 197,448 units sold.