Automakers pin their hopes on PIMS and Christmas

The 7th Philippine International Motor Show (PIMS), which opens today, carries the hopes and dreams of the beleagured auto industry.

In a press statement accompanying the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) year-to-date (January to September 2018) total vehicle sales joint report with the Truck Manufacturers Association (TMA), CAMPI president Rommel Gutierrez expressed optimism that the trend established by a month-on-month growth from August to September “will be sustained before the year ends, as we expect a boost in sales from the upcoming 7th Philippine International Motor Show this month and the Christmas season.”

Gutierrez was referring to the month-on-month growth in total vehicle sales of 2.6% from 30,313 units in August 2018 to 31,116 units in September 2018.

Gutierrez, who is concurrently first vice president of Toyota Motor PH Corp., said that new models continue to drive this sales growth for two consecutive months.

However, a closer look at CAMPI’s figures reveals that aggregate sales for the first nine months of the year fell by 13.8%, with total sales of 261,057 units compared to 302,869 in the same year-ago period.

The news from the Association of Vehicle Importers and Distributors, Inc. (AVID) was just as gloomy.

AVID president Ma. Fe Perez-Agudo reported that in YTD January-September, AVID sales slid to 65, 917 units, or 13% less from last year’s 75,949 units sold.

In other words, CAMPI’s 13.8% decline in Q3 YTD 2018 was matched by AVID’s 13.0%.

The CAMPI and AVID September YTD 2018 reports reflect a continuous drop in total vehicle sales since, in the first half of the year, CAMPI and TMA’s total vehicle sales fell 12.5% compared to the first half of 2017 while AVID reported an 11% drop in total vehicle sales versus the first sem last year.

From 12.5% in the first half to 13.8% in the third quarter YTD, the downward trend continues for CAMPI, while for AVID it’s 13.0% down from 11% in the first semester.

AVID can only look to the Christmas season to improve sales, because PIMS is off limits to companies that are not CAMPI or TMA members.

AVID has its own yearly Manila International Auto Show (MIAS) at the same venue, but the 14th MIAS last April failed to stop the downward trend in sales.

Agudo, who heads Hyundai Asia Resources, Inc. (HARI) as president and CEO, said that the 6.7% inflation rate in September, the P26.7 billion damage caused by Typhoon Ompong, the Central Bank’s elevation of the interest rate by a total of 150 basis points, the weak agricultural sector and rising oil prices caused consumers to balk at buying big ticket items.

Agudo said nevertheless that AVID expects supply and demand factors to stabilize.

Again, as in the first semester report, neither Gutierrez nor Agudo blamed the slowdown on the Tax Reform for Acceleration and Inclusion (TRAIN) law, which hiked excise taxes on new vehicles.

It looks like the soaring inflation rate blindsided the industry, as evidenced by 319,609 total vehicle sales in the first nine months of 2017, plunging to 278,587 in the same period this year, or a difference of 41,022 units.

SAME, SAME RANKING

Meanwhile, the Top 10 Performers’ ranking remains the same from the first sem with only Nissan, Suzuki and Foton again posting positive growth.

Nissan’s gain in variance was a whopping 41.1% to 24,507 units sold over 17,365 in the same year-ago period, allowing it to retain fourth place and nip at the heels of third placer Hyundai Asia Resources, Inc., which sustained a 6% decline in sales from 27,451 in the year-ago period to 25,440 in 2018.

How did Nissan do it? Perhaps by fielding a combination of popular models in three segments and entering a fourth segment (Midsize SUVs) with the Terra.

The Nissan Navarra astounded everyone by vaulting to first place in the Top 5 Pickup Trucks list, beating longtime leader Toyota Hilux by 871 units sold.

The Urvan (5,267 units sold) ranks second in the Top 5 Minivans list, outselling the Hyundai Grand Starex by over 2,600 units, while the Almera (4,501 units sold) ranks fourth in the Top 5 Subcompact Cars list.

Suzuki’s sales grew by a more modest 6.2% compared to the same period in 2017, led by the Ertiga AUV/MPV (4,834 units sold), Celerio mini subcompact (2,051 sold) and Vitara subcompact SUV/crossover (1,758 sold.)

Incidentally, the Vitara outsold the Nissan Juke (760 units sold) by 998 units in the first nine months this year.

Foton, which joined CAMPI two years ago, declined to break down its sales report in number of units sold per model except for the Gratour 8-passenger subcompact minivan (503 units sold.)

Foton’s sales report had three categories: passenger vehicle (859 units sold), light duty truck (1,684) and heavy duty truck/heavy equipment (201) for a grand total of 3,247. However, in the CAMPI report, Foton’s grand total was 3,217.

Whether it was 3,247 or 3,217, Foton’s grand total was enough to push Chevrolet’s distributor, The Covenant Car Company, Inc. (TCCI) down to tenth and last place.

Chevrolet posted total sales of 3,131 in the first nine months this year compared to 4,311 in the same period in 2017.

TCCI, a member of AVID, is pinning its hopes for improved sales on its all- new Colorado High Country Storm pickup.

TOYOTA AND FORTUNER STILL ON TOP

No auto industry report is complete without something on Toyota, whose market share of 39.3% YTD 2018 in the consolidated CAMPI-AVID report is impossible to reach for all other brands, although that figure is down from 41.5% in the same year-ago period.

Small wonder, since Toyota Motor PH Corp. (TMP) has the widest vehicle lineup of 18 models and the country’s broadest distribution and service network.

YTD end-September, six out of the Top 10 Nameplates are Toyotas, with eternal overall best-seller Vios (17,896 units sold) almost being equaled by the Fortuner (17,322 sold).

The Fortuner has resurfaced as No. 1 in the Top 5 Midsize SUVs ranking, outselling the Mitsubishi Montero Sport by a solid 4,085 units. In the first sem, the Montero Sport overtook the Fortuner by a small margin of 223 units.

A Toyota is the best-seller in six segments: the Wigo in the Mini Subcompact Cars segment, the Vios in Subcompact Cars, Fortuner in Midsize SUVs, the Rush in Compact MPVs, the Hiace in Minivans and Innova in AUVs/MPVs.

TMP celebrated its 30th anniversary last August by bagging its 17th consecutive Triple Crown Award, being No. 1 in Passenger Car Sales, No. 1 in Commercial Vehicle Sales and No. 1 in Total Sales.

This year, TMP raised the bar in terms of automotive safety when the all-new Vios and the Rush were launched with seven SRS airbags each as standard equipment across all trim levels.

Now, carmakers producing models that compete with the Vios and the Rush are challenged to similarly upgrade their standard safety features without increasing retail prices.

MITSUBISHI MAINTAINS 50,000 PLUS IN SALES

Although Mitsubishi Motors PH Corp. (MMPC) sustained a 5.4% loss in sales YTD compared to the same period last year, it managed to maintain sales above the 50,000 level with 50,588 units sold.

Thus, MMPC’s second place in the Top 10 Performers list is way beyond the reach of third placer Hyundai Asia Resources, Inc. (HARI), which posted total vehicle sales of 25,440 units in the first nine months, down 6% from the 27,451 in the year-ago period.

Long ago, I was told by a MMPC executive that they are no longer trying to catch up with almighty Toyota, they are happy being in second place.

The Montero Sport and Mirage G4 made it to the Top 10 Nameplates as No. 5 and No. 9, respectively.

The Montero Sport was runner-up in the Top 5 Midsize SUVs ranking while the Mirage G4 and Mirage hatchback achieved no. 2 and no. 3, respectively, in the Top 5 Mini Subcompacts list.

The Xpander lost out to the Toyota Rush for first place in the Top 5 Compact MPVs list, but it outsold the Honda Mobilio by a substantial 4,901 units.

HYUNDAI’S NO. 3 POSITION IMPERILED BY NISSAN

As of YTD September 2018, HARI’s third place in the Top 10 Performers ranking was less than 1,000 units more than Nissan PH. Inc.’s (NPI).

HARI sold 25,440 vehicles during the period while NPI sold 24,507, an astonishing 41.1 variance over the year-ago period of 17,365.

HARI’s YTD edge over NPI thereby plummeted from 10,086 units sold in 2017 to only 933 now.

Hyundai, like Honda Cars PH, Inc. and Suzuki PH, Inc. is disadvantaged by the lack of a pickup truck in its lineup.

HARI’s passenger cars, led by the Accent, continue to be the Korean brand’s main volume driver with at least two-thirds of its total vehicle sales.

In addition, the new Kona in the subcompact SUV segment contributed to HARI’s sales.

On the other hand, NPI did not include the newly launched Terra midsize SUV in its CY 2018 Sales report. The Terra’s sales should appear in the fourth quarter NPI report. Will sales of the Terra by year-end push NPI to overtake HARI?

SUMMING UP

As the nation is deluged with holiday songs and promos during the remaining 61 days to Christmas, industry players hope that aggressive marketing campaigns and new product launches will persuade consumers to include a new motor vehicle in their shopping list.

However, a lot will depend on whether the inflation and interest rates will continue to climb, the depreciation of the peso to the dollar, and the continuing effects of the TRAIN law.

Starting today, CAMPI members will push their purposefully discounted products and easy auto loans at the 7th PIMS — but they only have five days to find the light at the end of the tunnel.