Motorcycle sales zoom past 1M in 2016

PARTICIPANTS to the government’s motorcycle manufacturing resurgence program delivered record sales volume in 2016, breaching the 1 million mark partly on the Filipinos’ strengthening purchasing power and a growing preference for motorcycles as a mode of transportation.

Honda Philippines, Inc.; Kawasaki Motors (Phils.) Corp.; Suzuki Philippines, Inc.; Yamaha Motor Philippines, Inc.; and Kymco Philippines, Inc. disposed of 1.14 million motorcycles or 34% more than the 850,509 sold in 2015.

The manufacturers comprise the Motorcycle Development Program Participants Association (MDPPA), which was established in 1973 in line with the Motorcycle Development Program of the Board of Investments.

MDPPA had expected its sales volume to increase by only 12% to 952,570 units. The association did not only surpass the internal forecasts; it even outperformed peers in the Federation of Asian Motorcycle Industries from Indonesia, Japan, Malaysia, Thailand, Taiwan and Vietnam.

Mopeds accounted for 37% or 418,043 units of the sales volume, while the business motorcycle category cornered 32% or 268,270 units. The automatic transmission segment posted the biggest sales growth of 51% to 274,104 units.

“We had impressive GDP growth at 6.8% and it has strengthened the purchasing power of more and more households and, of course, the prevalent use of mopeds for personal purposes,” MDPPA President Armando B. Reyes said in a media briefing in Makati City on Wednesday.

The motorcycle manufacturing industry further benefited from the introduction of new models, the higher peso value of overseas Filipino worker’s remittances and the lingering traffic congestion in metropolitan areas, Mr. Reyes added.

Banking on the same factors, MDPPA looks to sustain a doubledigit increase in sales volume although it charted a “conservative” 12-15% growth target for 2017 in recognition of the national elections’ role in buoying the 2016 sales.

“I think last year was an exception — all commodities are doubly bigger — because in every presidential election demand goes up and people have a lot of money to buy,” MDPPA Board Member and former President Alfredo O. Lejano, Jr. said during the briefing.

The increase in the association’s sales volume mostly came during the first six months of 2016. The period saw 544,699 motorcycles purchased, compared with the 382,568 units taken up during the comparable 2015 period.

In this light, Mr. Lejano noted the projected growth for 2017 does not necessarily suggest a slowdown especially when compared with the 7% increase in annual sales volume to 752,836 in 2013; 5% to 790,245 in 2014; and 8% to 850,509 in 2015.

“People are getting to realize the usefulness of motorcycles. It’s a nice mode of transportation, which gives one the flexibility especially now that everyone has hectic lifestyles. So, you need a vehicle where you can easily park, you can go through traffic,” Mr. Lejano said.

Mr. Lejano, however, dismissed the notion that commuters have started shifting to motorcycles from cars because of traffic congestion in metropolitan areas.

“That’s just a very small portion. So, what’s driving the growth really is the increase in per capita income and it’s basically the general acceptance of motorcycles especially in the provinces,” Mr. Lejano said.

“Most of our market is Class C and D whereas four wheels is A and B. So, as the populace go up the ladder, there’s where the growth comes from. People can basically afford a motorcycle more today than before and we find out that it’s a very convenient way to go around.”

Motorcycle manufacturers in the Philippines have room to expand and meet the growing demand, given they have utilized only 50-60% of their respective production capacity. Tapping the export market, however, remains beyond the horizon of the association.

“First of all, there are factories already in ASEAN, where demand for motorcycles is very strong. The US and Europe, on the other hand, use motorcycles for leisure so those markets do not jive with the Philippines,” Mr. Lejano said.

“Well, possible markets are in the Middle East and Africa, but currently the local market is very lucrative.”