Auto sales squeezed in 5.6% growth last year

THE automotive industry sold 124,449 units in 2008, posting a 5.6-percent growth from 2007 despite the impact of the global financial crisis.

Elizabeth Lee, president of the Chamber of Automotive Manufacturers of the Philippines Inc., said the total was 1,051 units shy of the industry target, but added it was significant that sales still grew in a difficult year.

The chamber said December sales reached 9,885 units for a slight 1-percent rise over the previous month’s 9,807 units.

Lee said the sales volume for December would have been higher but for the unusually long holidays, which cut the industry’s selling opportunities by almost two weeks.

“Elsewhere in and around the world, the auto markets of developed countries experienced steep declines due to the credit crunch coupled with deteriorating consumer confidence in those respective markets,” Lee said in a statement.

“Thankfully, there is enough liquidity in the local financing environment, with consumers able to take out loans for their personal and business needs.”

Despite the apparent slowdown in demand late last year, she said, carmakers remained optimistic the global economic downturn would not hurt car sales by as much.

She said this view was validated by the recent Fitch Ratings report describing the Philippines as less vulnerable than other countries given the strong fundamentals of its banking and financial system.

“Remittances of Filipinos will remain a significant engine of consumption,” Lee said.

“This year competition will be stiff, which may in turn benefit auto buyers. The entrepreneurial trend will likely continue, and may get stronger as returning Filipinos from abroad may be forced to become dual income earners.”

The industry had earlier projected a conservative growth of 2 percent to 4 percent for 2009 amid new model introductions.

Commercial vehicles continued to dominate the market with an overall market share of 64.3 percent. Over 80,000 commercial vehicles were sold in 2008, while passenger cars accounted for the remaining 35.7 percent of total industry sales.

“It will be a challenging year for most, but nevertheless we are still looking forward to growth year for 2009,” Lee said.

Overall sales for the passenger car segment grew 8.5 percent with a total of 44,426 cars for the year despite the 17.8-percent decline in December sales due to lack of stocks and shorter selling days.

Volumes were sustained by small engine cars supported by the extension of promotion subsidies.

In the commercial segment, sales improved by 4 percent year-on-year with 80,023 units sold. In December alone, sales jumped 12.4 percent despite the shortened selling days supported by strong sales of Asian utility vehicles, vans and pick-ups.

Sales of new models helped boost the performance of vehicles in the segment as well.

Lee said the commercial vehicle segment would likely remain strong throughout the year as buyers became more discriminating in their vehicles purchases, looking for products offering best value for money.

Toyota was the most popular brand with a total of 45,915 units sold, or 824 units more than it sold in 2007. But the carmaker ended the year with a smaller market share of 36.9 percent against 38.2 percent in 2007.

Company officials earlier said cheaper Chinese and Korean cars were steadily eating up the share of the more expensive Japanese, European and American cars.

Mitsubishi Motors Philippines Corp. regained the second spot with 17,539 units sold, or an increase of 2,535 units over 2007. Its market share correspondingly shot up to 14.1 percent from 12.7 percent.

Honda Cars Philippines finished in third spot with 14,298 units sold, a drop of 3,022 units from 2007. It also lost market share, ending the year with only 11.5 percent against 14.7 percent. –Elaine Ruzul S. Ramos, Manila Standard Today