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Tuesday, March 23, 2021

PH Auto Industry Had a Tough First Two Months in 2021


The mood of the automotive industry remained sour as new car sales failed to recover despite a strong showing towards the end of 2020. The Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) recorded a 12 percent slump in car sales compared to a year ago, echoing the 31 percent decline posted by the Association of Vehicle Importers and Distributors (AVID) during the same period.

Based on their combined February 2021 sales report, CAMPI and the Truck Manufacturers Association (TMA) recorded a 12 percent decline in sales compared to a year ago due to slow demand for both passenger cars (PCs) and commercial vehicles (CVs). Sales reached just 26,230 units, compared to 29,790 units a year ago.

This is compared to AVID’s figures of 5,401 units sold compared to 7,876 units in February 2020.

For CAMPI members, passenger car sales went down 2.4 percent to 7,899 units in February from 8,093 units a year ago, while commercial vehicle sales tanked 15.5 percent to 18,8831 units from 21,697 units last year.

While the combined CAMPI and TMA sales declined year-on-year last month, the figure did manage to rise by 12 percent compared to 23,380 units sold in January. This is a sentiment shared by AVID members which saw a modest 3 percent increase in February sales compared to January 2021.

CAMPI members saw passenger car sales rise more than 8 percent from the 7,295 units sold in January, while commercial vehicle sales grew 14 percent from January’s 16,085 units.

Cumulatively, total CAMPI sales for 2021 retreated by 7.3 percent to 49,610 units from 53,513 units sold in 2020. This is matched by a decline in AVID sales from 3,540 to 2,868 units.

As of end February, passenger car sales climbed by 3.8 percent to 15,194 units from 14,636 units in the same period a year ago, while commercial vehicle sales dropped 11.5 percent to 34,416 in the first two months from 38,877 units in 2020.

CAMPI president Rommel Gutierrez said that while the double-digit month-on-month sales growth seen in February was a welcome development, the group was wary of the imposition of safeguard measures on vehicle imports and their impact on overall sales.

Several carmakers, even those who are engaged in local assembly of cars have voiced their opposition to the DTI’s safeguard measures.

The Department of Trade and Industry (DTI) has imposed provisional safeguard duties amounting to P 70,000 and P 110,000 for imported passenger cars and light commercial vehicles, respectively, acting on a petition from the Philippine Metalworkers’ Alliance.

As a result, several car manufacturers have either increased their prices, or started collecting “safeguard deposits” from new car buyers. These include brands such as Toyota, Mitsubishi, Honda, Isuzu, Ford, and Mazda. Other carmakers such as Nissan, Hyundai, Geely, and Subaru have opted to defer the collection of safeguard deposits or increasing their prices for the time being.

Kia Philippines president Manny Aligada says the imposition of the DTI safeguard tariff may derail the recovery of the auto industry as a whole. It may cause the industry to re-think its 301,000-unit sales projection. With the imposition of DTI’s safeguard tariff, the figure may end up at just 273,000 units by the end of the year.

This is a projection shared by the largest provider of auto loans in the country, BPI. They see auto sales to remain flat this year compared to 2020.

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