8 things that need to pass to break records

ARE WE forcing the sheep to bite off more grass than it can chew? Pundits have been predicting even before the Year of the Horse ended that the chances the local automotive market will exceed a record-breaking 300,000 unit sales this Year of the Sheep is high. After the holiday highs, observers have sobered up and revealed the eight factors that need to be realized first before the 300,000 mark—and beyond—is reached.

1. If interest rates on auto loans go down some more, and national per capita income reaches $3,000

John Philip Orbeta, president of Volkswagen Philippines, said that Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) is already forecasting to break the 300,000 mark in 2015. “If the interest rates on auto loan continue to plunge, and the national per capita income approaches the $3,000 level, these will further fuel demand for automobiles.”

2. If purchasing power goes up

Lawyer Rommel Gutierrez, Campi president and Toyota Motor Philippines first vice president, said that “the increased domestic purchasing power and improved economic fundamentals will make the local automotive industry expect a total of 300,000 sales in 2015. Furthermore, motorization in the country continues to advance.”

Daniel M. Isla, Lexus Manila president, said that he has “a strong belief that the market will continue to grow, albeit moderately in 2015,” and that “the growth will be driven by the subcompacts and commercial vehicles (pickups and MPVs) on account of the continuously improving economy.” He also observed that “World Bank data show a steady rise in the GDP per capita income of the Philippines to a level where motorization is bound to start.”

3. If mass transport continues to be unreliable
Isla said that “another factor that will contribute to the continuous growth of the industry is the lack of a reliable public transport system in the country. Owning a car is a necessity for Pinoys for their convenience and safety.”

Orbeta added: “The continued unreliability of the mass transport system will also fuel the buying public’s desire to have private transport vehicles.”

4. If affluent households continue to buy more cars for the number coding scheme

“What has fueled some of the growth in the past has been the response by the more affluent households to buy additional cars due to the number coding scheme. Key to this was the ability to request for specific plate endings,” he said.

“With the LTO guidelines removing the ability to select license plate ending numbers except for a hefty fee, this may put a damper on some demand,” he quipped.

5. If the country continues to show bullish economic indicators

Fe Perez Agudo, Avid president and Hyundai Asia Resources Inc. CEO and president, said that “there is a strong likelihood that the industry will surpass this projection if we sustain our bullish economic indicators, like GDP and OFW remittances. The introduction of new, value-laden products will likewise move consumers to make wise purchases.”

Greg Yu, CATS Motors chair, also cited economic indicators: “If the economy grows as expected, then I think the local market will exceed projections.”

6. If more models and brands come in

Lawyer Alberto M. Arcilla, president of Volvo Philippines, and president and managing director of The Covenant Car Company Inc., cited new models, new brands: “There is strong growth expected in growing regional markets with the economic growth being experienced outside Metro Manila. With the increasing availability of new brands and new models that target new segments and niches, we can expect an exponential growth of the market in 2015.”

7. If oil prices continue to plummet

“Low oil prices will also help,”  Yu quipped.

8. If more affordable financing packages are available

Isla said: “Hitting a market volume of 300,000 units in 2015 translates to an 11-percent growth over the total industry sales of 270,000 in 2014. As there are more players in the market now, the major players will definitely continue their aggressive marketing approach to protect their share of the market.
“New product launches will continue to excite the market, and the banking and financial industries will cash in on the positive market developments by offering attractive and affordable financing packages.”