Optimism amidst the gloom

By Aida Sevilla-Mendoza Philippine Daily Inquirer July 25,2018

Toyota Vios

The consolidated sales reports for the first half of the year of the two major Philippine automotive industry associations show that seven of the top 10 performers, including market leader Toyota, sustained negative variance percentages compared to the same period in 2017.

Only Nissan Philippines, Inc., Suzuki Philippines, Inc., and Foton Motor Philippines, Inc. gained in sales (see table).

Compared to the first quarter’s top 10 ranking, Nissan leapfrogged over Ford and Honda to grab fourth place, Suzuki stayed steady in seventh place, and Foton, the only Chinese brand to make it to the top 10, rose to ninth place, pushing Chevrolet down to 10th in the process.

The joint report of the Chamber of Automotive Manufacturers of the Philippines, Inc. (Campi) and Truck Manufacturers Association (TMA) recorded total vehicle sales of 171,352 units, down by 12.5 percent versus the same year-ago period’s 195,772 units.

At the same time, the Association of Vehicle Importers and Distributors (Avid) reported 43,138 total sales in the first semester, down 11 percent from the 48,344 units sold in the comparable period in 2017.

However, one cannot add Campi’s 171,352 and Avid’s 43,138 to get the grand total since three players—Ford, Suzuki, and Auto Nation Group (Mercedes-Benz)—post their sales in both the Campi and Avid reports.

Honda Civic Type R

To arrive at an accurate grand total, let us count the vehicle sales of Ford Motor Co. Philippines, Inc. (12,508), Suzuki Philippines (9,455), and ANG Mercedes-Benz division (475) only once.

The resulting sum of 192,052 represents the total vehicle sales of the two groups for the first sem, instead of 214,490 which is the sum when the sales of Ford, Suzuki and Mercedes-Benz are counted twice.

Slowing sales

This time around, auto industry leaders are no longer blaming the Tax Reform for Acceleration and Inclusion (TRAIN) law, which increased the excise tax on new vehicles sales starting January 1, for the slowdown.

Campi president and concurrently Toyota Motors Philippines Corp. (TMP) first vice president Rommel Gutierrez said in a press statement: “This double-digit negative growth was largely due to consumers’ prioritization of buying basic goods and services, as buying big ticket items like motor vehicles is less favorable at this time due to rising inflation, which increased to 5.2 percent this June 2018.

“This is a typical consumer’s behavior pattern when the economic condition is a bit gloomy due to less favorable economic indicators.

“However, we remain optimistic that our sales will recover in the coming months, and hopefully a sustained growth by the end of the year.”

Avid president and concurrently Hyundai Asia Resources, Inc. (HARI) president and CEO Ma. Fe Perez-Agudo offered the following sales and economic outlook: “Recent falls in the value of the peso, rises in imported fuel prices, a higher than ever inflation rate, and other seasonal factors have temporarily dampened consumer demand for automotive vehicles.

“However, business and consumer confidence remain upbeat as the increasing investments of the current administration’s Build, Build, Build initiative, a strong domestic demand, and a stable labor market played a role in influencing these positive sentiments.

“As the market begins to adjust to the effects of the TRAIN law, we expect the sale of automotive vehicles to pick up in the coming months.”

Top 10 nameplates

Five of the 10 top selling nameplates during the first half are Toyotas: Vios (1), Wigo (3), Fortuner (4), Hiace (6), and Innova (8).

Conspicuously missing is the Toyota Hilux, which was replaced by the Nissan Navara in this list, as well as in first place in the list of the top selling pickup trucks.

Mitsubishi Motors Philippines, Inc. landed two slots: Montero Sport (2) and the Mirage G4 (9).

The only other nameplate to make it to this list was the Hyundai Accent (7), which long ago displaced the Honda City as the second best-selling subcompact car after eternal leader Vios.

Toyota retains leadership

Despite a 14.7 percent negative variance in sales compared to the same period last year, TMP remains way ahead of the competition in total vehicle sales.

TMP is celebrating its 30th anniversary this Aug. 1 after selling 73,136 vehicles in the first half of 2018 for 40.2 percent market share.

That’s 12,592 less vehicles sold versus total vehicle sales of 85,728 units in the same year-ago period, representing 41.5 percent market share, but still a number competitors cannot reach.

A Toyota made the top-selling list in eight of nine categories. The Wigo ranks first in the mini subcompact cars list with YTD sales of 9,376, while the Vios leads not only in the subcompact segment, but across all segments, with 13,651 units sold YTD.

Leading the pack in the minivans segment is the Hiace with 7,528 units sold YTD.

Among the top-selling midsize SUVs, the Fortuner gave way to the Montero Sport, ranking a close second with 9,332 units sold YTD.

The Corolla Altis placed a distant second to compact cars segment leader Honda Civic (1,176 sold) with 797 units sold YTD.

In the pickup truck segment, the Hilux (6,047) was a close runner-up to the Nissan Navara (6,777 units).

The Rush, which was launched only last May, already placed fourth in the compact SUV/crossovers segment, with 1,301 units sold.

According to Toyota Alabang, there is a six-month waiting period for the Rush.

TMP has two winners in the MPVs/AUVs segment: the Innova (7,275 units sold) ranked second to the Mitsubishi L300 (8,230), while the Avanza (4,363) was third.

If this survey had included the midsize executive sedan segment, the Toyota Camry would undoubtedly have placed first. The latter segment was excluded here due to lack of sales data.

Mitsubishi Montero Sport

Montero Sport outsells Fortuner

MMPI amazed the industry in the first quarter this year when the Montero Sport, recovering from the sudden unintended acceleration controversy surrounding older models, outsold the Toyota Fortuner.

MMPI has strengthened its no. 2 position in the top 10 performers list not only via the Montero Sport (9,555 units sold YTD) but also via the L300 (8,230 units sold), Mirage G4 (6,897 sold), and Mirage hatchback (2,900), which, together with sales of other Mitsubishi models, brought the total to 33,506 in the first half.

MMPI’s negative variance of 3.0 percent compared to sales in the same period last year was the smallest among the top 10 performers.

Last March, MMPI launched the Xpander compact SUV, two months ahead of the Toyota Rush intro, which may explain why the Xpander took third place in the top selling compact SUV/crossovers list, with 1,537 units sold versus the Rush’s 1,301.

Accent leads Hari’s sales

Unlike Toyota, Mitsubishi, Nissan and Ford, Hyundai has no pickup truck to market, but Hari has managed to hold on to the coveted no. 3 rank mainly due to the Accent subcompact.

If Hyundai Motor in South Korea comes up with a pickup truck, it would boost Hari’s sales since pickup trucks are not included in the higher excise tax imposed by TRAIN.

So far, Hyundai is the first and only Korean brand to enter the Magic 5 Circle.

Kia dropped out of the top 10 performers’ list in 2017 as Columbian Autocar Corp., its Philippine distributor, sold only a total of 2,118 vehicles that year.

In the first half of this year, Hari sold 15,957 vehicles, an 8.1 percent decline from the year-ago period’s 17,366, but good enough to bag 8.8 percent market share.

The Accent, Hari’s best selling nameplate, registered sales of 7,484 units, slightly down from 7,711 in the first half of 2017.

Nonetheless, the Accent is second only to the Toyota Vios in the list of top selling subcompact cars.

The Accent’s advantage: buyers can choose between a gasoline or common rail direct injection diesel engine.

Hari’s other top sellers are the Eon mini subcompact (2,653 units sold YTD), the Tucson (1,540 sold), and the Grand Starex minivan (1,639).

The Starex, however, has been steadily losing sales to the Toyota Hiace and Nissan NV350 Urvan.

The five-seater Tucson, available with either a gasoline or CRDi diesel powertrain, ranks second to the seven-seater diesel Honda CR-V (1,775 units sold) in the top selling compact SUV/crossovers list.

Top 10: Nissan leaps to 4th

Of the three top 10 performers that reported higher sales, NPI posted the biggest increase with 13,222 units sold compared to 10,651 in the same year-ago period, reflecting a 24.1 percent positive variance.

NPI thus improved its market share to 7.3 percent versus 5.2 percent in the first half of 2017.

In the 2017 top 10 performers list, NPI ranked seventh, same as 2016. But by the end of the first quarter this year, NPI had risen to sixth place.

NPI has subsequently leaped to fourth place, dislodging Ford Motor Co. Philippines, Inc. in the process.

Ford posted total sales of 12,508 units in the first half of 2018, compared to 16,695 in the same year-ago period.

Ford’s market share dropped to 6.9 percent from 8.1 percent last year. Its negative variance percentage of 25.1 percent is the second biggest after Isuzu Philippines Inc.’s negative 44.4 percent.

While Ford revealed the unit sales of its three best-selling models (the Ranger pickup truck, EcoSport subcompact SUV, and Everest midsize SUV), the sales figures of Ford Philippines’ passenger cars were not disclosed.

Ford world headquarters in Dearborn, Michigan announced last year that it will phase out its passenger cars in favor of SUVs and pickup trucks, their best-sellers.

Ford Philippines will most probably follow suit, given the dismal sales record of the Fiesta and Focus, but retain the popular Mustang sports car in its lineup.

Nissan Navara

Meanwhile, capturing fourth spot in the 2018 1st half top 10 performers list is not the only achievement of NPI so far.

The Nissan Navara replaced perennial leader Toyota Hilux in the top selling pickup trucks list, with sales of 6,777 units compared to the Hilux’s 6,047.

The NV350 Urvan is NPI’s second best-seller (3,130 units sold YTD), and ranks second to the Toyota Hiace in the top selling minivans list.

The Almera is Nissan’s third top-selling model after the Navara and the Urvan. Almera sales were slightly up in the first sem this year, with 2,657 units sold versus 2,554 in the same year-ago period.

Below the magic 5 circle

Honda Cars Philippines, Inc. (HCPI} placed sixth in the top 10 performers list with total sales of 12,017 vehicles.

Suzuki Philippines, Inc. (SPI) followed in seventh place with total vehicle sales of 9,455, and Isuzu Philippines, Inc. slid from sixth in the first quarter to eighth YTD with 7,910 units sold.

Foton Motor Philippines, Inc. rose to ninth place by selling 2,208 vehicles in the first sem, while Chevrolet, distributed by The Covenant Car Company, Inc. (TCCI), was 10th and last with 2,130 vehicles sold.

At the end of 2017, Ford was fourth, Honda was fifth, Isuzu was sixth, Nissan was seventh, Suzuki was eighth, Chevrolet was ninth, and Mazda was 10th. Foton wasn’t even in the picture.

But in the space of six months, Nissan leapfrogged over Isuzu, Honda, and Ford to take fourth place; Suzuki moved up one notch to seventh; Foton invaded the top 10 list by dislodging Chevrolet from ninth place; while Chevrolet, pushed down to 10th, ousted Mazda from the list altogether.

Summing up

Auto industry leaders are still hopeful that the impact of the TRAIN law on new motor vehicle sales will diminish in the second half of the year.

The question remains whether the intro of new models and adjusted marketing strategies will overcome the 5.2 percent inflation rate, the declining value of the peso, and rising price of fuel due to new taxes on oil imposed by TRAIN.

So, what will happen to Vision 2020, the industry’s goal to sell 500,000 cars by the year 2020?

Wait for the industry’s consolidated sales report for the year 2018 to find out.

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