Vehicle sales seen rising by 12%
The volume of vehicles sold in the Philippines is primed for a 12-percent growth this year to reach about 577,000 units amid a government drive to upgrade jeepneys and increase in domestic production, according to Frost & Sullivan.
The US-based consultancy firm said the projected Philippine economic growth of up to 7 percent yearly over the next five years would drive sales of new passenger cars.
Paulo Jose Mutuc, senior consultant on mobility at Frost & Sullivan, said in a statement the manufacturing industry in the Philippines had grown by over 7 percent since 2010, and that Toyota Motor Corp. and Mitsubishi Motors Corp. were increasing their local production capacity through their subsidiary’s participation in the government’s Comprehensive Automotive Resurgence Strategy (CARS) program.
Mutuc said that this, along with the introduction of new models planned for this year, was expected to boost new car sales.
Even then, regulations that result in limiting the number of vehicles used in ride-sharing services are expected to dampen demand for passenger cars, he said.
“There is also concern that the new tax reform law approved in December 2017 will significantly raise car and fuel prices, and the cost of other goods,” Mutuc said.
“But while that tax reform raises prices of entry-level models, it excludes pickup trucks and lowers personal income taxes, so there should be no big reduction in the number of new car sales in total,” he added.
Also, Frost & Sullivan sees government efforts to modernize the public utility vehicle sector contributing to growth in commercial vehicle sales.
Mutuc noted in particular that PUV modernization required the replacement of about 200,000 jeepneys with units equipped with engines compatible with Euro 4 emissions standards. –By: Ronnel W. Domingo