Sales could top ’96 peak — car firms

CAR SALES could grow by over a fifth this year to top 1996’s record of over 162,000 units, an industry group yesterday said.

The rosy outlook comes after a latest tally showed that a surge still hasn’t waned eight months into 2010. Twenty car firms sold 112,454 units in January to August, up 37% from yearago levels according to industry data released yesterday.

The growth matches year-to-date increases posted every month since April.

Commercial vehicles accounted for nearly two-thirds of the latest sales figure. The segment, which includes Asian utility vehicles and pickups, recorded 38.3% growth from yearago levels. Sales of passenger cars, meanwhile, rose by 34.6% to 39,126 units.

Toyota Motors Philippines Corp. dominated both segments with a 32.5% share of the total market. Its sales grew by 30.3% to 36,594 units.

Mitsubishi Motors Philippines Corp. and Hyundai Asia Resources, Inc. trailed behind in terms of market share but bested the industry leader with brisker growths of 43.7% and 102.8%, respectively.

“[C]ontinued robust sales is seen in the coming months,” the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) said in a statement.

“This year is looking to be the year that the local auto industry will surpass the highest sales ever attained in 1996 of over 162,000 units,” the group said, noting that remittances from overseas workers, car loans, and market confidence are all expected to improve.

If so, sales this year could top 2009 levels by 23.3%, higher than the group’s current forecast of an 11% growth for 2010.

“The chamber [will have] to revise yet again our target forecast for the year,” CAMPI said.

Observers noted, however, that signs of a growing automotive market may not be enough to lure new car assembly investments into a country with high power and labor costs.

University of the Philippines economist Benjamin E. Diokno said the sales growth so far was unlikely to be sustained.

“The strong performance of the car industry may be attributed to the replacement of cars damaged by [storms] in 2009, the campaigns for and conduct of the May 2010 elections and government procurement. These one-time factors will not be repeated next year,” Mr. Diokno said in a text message.

Benjamin C. Sevilla, executive director of the Philippine Automotive Competitiveness Council, Inc., said: “This kind of sales increase in the local market is still not substantial enough”.

“When car manufacturers look to increase investment in the Philippines, the decision is comprised of several elements,” Mr. Sevilla said in a phone interview.

“Southeast Asia has to be looked upon as a single market … Already, in terms of power costs and labor, the Philippines appears to be uncompetitive compared with its neighbors.”

Added incentives are “necessary” for the Philippines to keep up with the rest of the region, he said, noting that rules for a new Motor Vehicle Development Plan are being drafted. –JESSICA ANNE D. HERMOSA, Senior Reporter, Businessworld