It’s a fact: Vehicle sales growth in the Philippines is slowing down!
While this is really bad news for car firms that are still hoping sales will reach 500,000 units in 2024, car makers are optimistic that the next months will be better.
From January to October, automobile sales reached 84,310 units, or 8.9 percent more than the 352,971 logged in the same period last year, according to the Chamber of Automotive Manufacturers of the Philippines, Inc. (Campi) and the Truck Manufacturers Association. This was much lower than the 25.9-percent to 352,971 units from 280,300 units in the same period last year.
Campi president Rommel Gutierrez said that the January-to-October figure in vehicle sales is still a reason to be optimistic.
“The increase can be attributed to good sales and good stock availability, neutralizing the effect of Typhoon Kristine on the operations of dealers nationwide last month,” Gutierrez said.
As the year ends, automakers are hopeful in hitting their aggregate target sales of 468,300 units for this year, or just 83,990 short for the period.
When it comes to monthly sales compared year-on-year, the sales increase of 4.9 percent in October to 40,003 units is much lower compared to the same period last year.
In October last year, unit sales reached 39,128 units, for a hefty 21.8-percent increase compared to the 32,145 units of the same month in 2022.
The Popular Choice
Even with the unbelievable low down payment promo, there were very limited takers. And if there were, low maintenance cost and reasonable price of spare parts are major considerations.
In industry ranking, Toyota Motor Philippines Corp. (TMP) sustained its dominance in the industry with 19,333 units sold in October, up 4.9 percent from 18,434 a month earlier. From January to October, TMP sales grew to 178,421 units, 10.0 percent higher year-on-year, cornering a 46.43-percent market share.
Mitsubishi Motors Philippines Corp. (MMPC) came in at second with October sales of 7,348 units or a 2.2-percent decline from the previous month. Year-to-date, MMPC sold 73,376 unit, or 12.6-percent higher compared to the same period of 2023. It’s market share stood at 19.09 percent.
Ford Motor Co. Philippines, Inc. ranked third followed by Nissan Philippines Inc., and Suzuki Philippines Inc.
Robust Economy
For its part, BMI, a unit of Fitch Solutions, sees vehicle sales in the Philippines to continue growing this year, supported by robust economic activities.
In a commentary released in September, BMI adjusted upward its growth projection for vehicle sales in the country from 1.6 percent last year to 8.5 percent this year, with total sales this year reaching 466,500 units.
The Fitch unit said the commercial vehicle (CV) segment will realize a 7-percent growth to 343,000 units, driven by demand from the construction and mining sectors.
“We project demand for CVs to be bolstered by robust growth in the construction sector, driven by substantial government expenditure and increases in fixed capital investment as businesses expand their operations. Additionally, the mining and quarrying sectors will contribute to the growth in medium and heavy truck sales,” it said.
However, BMI sees CV sales growth in 2025 slowing down to 1 percent.
Low Loan Interest
On the lowering of the Bangko Sentral ng Pilipinas (BSP) on policy rates, this is seen benefiting the vehicle industry as banks can start offering car loans with lower interest rates.
“For 2025, we anticipate that reduced borrowing costs will continue to support the growth of the passenger car segment, as households respond favorably to lower financing rates,” it added.
