Racing toward 350,000

 

THE PHILIPPINE automobile industry is racing toward its sales target of 350,000 units for 2016.

In the first semester, the combined sales of the two industry organizations, the Chamber of Automotive Manufacturers of the Philippines, Inc. (Campi) and the Association of Vehicle Imports and Distributors (Avid), hit 212,901 units, which is more than half this year’s total sales target.

Together with the Truck Manufacturers Association, Campi posted a 27 percent increase in vehicle sales to 167,481 units in the first half of the year compared to the 131,465 units sold in the year-ago period.

At the same time, Avid registered an astounding 103 percent surge in sales or 45,410 units in the first half of 2016 from 22,731 in the same period of 2015.

Campi has eight regular and five associate members. The brand principals who are regular members, alphabetically listed, are BMW, Daewoo Bus, Honda, Kia, Isuzu, Mitsubishi, Nissan and Toyota while the associates are BAIC (Beijing Automotive Industry Corp.), Mazda, Mercedes-Benz, Peugeot and Volkswagen.

To qualify for regular Campi membership, a company must operate manufacturing facilities in the country.

Regular members have the right to vote while associate members do not. But there are exceptions to this rule.

BMW and Kia do not assemble or manufacture vehicles locally, yet they are regular members.

Avid has 10 members, all with voting rights: Auto Nation Group (Mercedes-Benz, Chrysler, Dodge and Jeep), British Bespoke Automobiles Inc. (Rolls-Royce), British United Automobiles Inc. (MINI Cooper), Ford Group Philippines, Inc., Hyundai Asia Resources Inc. (Hari), Motor Image Pilipinas Inc. (Subaru), Scandinavian Motors Corp. (Volvo), Suzuki Philippines Inc., and The Covenant Car Co. Inc. (Chevrolet).

Ford and Suzuki were originally with Campi, but switched to Avid in 2015.

Mercedes-Benz, which is distributed by the Auto Nation Group, is a member of both Campi and Avid.

Surpass

It looks like the combined efforts of Campi and Avid will surpass the industry’s total sales target of 350,000 units this year, the same way that they exceeded the 310,000 objective in 2015 by posting sales of 323,928.

The top two manufacturers, Toyota Motor Philippines Corp. (TMP) and Mitsubishi Motor Philippines Corp. (MMPC), have joined the Comprehensive Automotive Resurgence Strategy (CARS) that the government set up last year to boost vehicle and parts manufacturing capability, and thus give industry players the opportunity to take part in the region’s supply chain and achieve competitiveness in the region.

TMP has chosen its (and the industry’s) best-selling nameplate, the Vios subcompact sedan, to participate and comply with the CARS requirement of producing 200,000 units of one model over the next six years.

MMPC, which last year acquired and moved into the manufacturing facilities in Laguna formerly owned by the Ford Group, has also taken up the challenge of the CARS program.

MMPC is expected to participate in CARS with the Mirage mini subcompact.

The other regular voting members of Campi who meet the organization’s requirement to assemble vehicles in the Philippines found the 200,000 production volume of CARS unattainable.

But given the continuing yearly surge in sales, industry players have reason to be bullish about the potential of the Philippine market, so much so that several more may be encouraged to join the government’s incentives programs in the future.

Top 10 performers

(first semester 2016 and 2015)

Comparing the sales figures in the 2016 roster with those of the first semester 2015 top ten performers will show you why industry players are bullish.

The changes in ranking indicate the keen competition for third place between Ford and Hyundai, which is benefiting from the Asean-Korea Free Trade Agreement that lowered tariffs on vehicles imported from Korea to 5 percent from 20 percent effective this year.

AKFTA translates into a reduction of between P20,000 and P80,000 from the retail price of vehicles made in South Korea. No wonder SsangYong, another Korean brand, entered the Philippine market early this year.

Toyota, Mitsubishi, Ford, Isuzu, Nissan and Chevrolet enjoy the advantage of selling pickup trucks and pickup-based passenger vehicles (PPVs) and SUVs, an edge that Hyundai, Honda, Suzuki and Kia do not have.

Yet Hyundai has managed to stay in the top five circle, nipping at the heels of 2016 third placer Ford, while Honda has replaced Isuzu at fifth place.

Honda overtook Isuzu by flooding the market with 11 nameplates, including new ones (to the Philippines) like the Brio, CR-Z, HR-V, Legend and Pilot.

Suzuki, recognized worldwide for its mini subcompact cars, leaped over Kia to eighth place via a 37 percent growth in sales compared to the year-ago period, on the back of an amazing 426 percent jump in sales of the new Celerio.

However, like last year, Suzuki Philippines Inc. would not disclose the number of units it sold per model.

 

 

Top 10 nameplates

(first semester 2016 and 2015)

The Mitsubishi Montero Sport, Ford Ranger and Honda City were toppled from the top 10 roster by the Mitsubishi Mirage mini subcompact, Toyota Wigo mini subcompact, and Ford Everest midsize SUV.

In the top 10, six are Toyota nameplates, showing the super dominant role of Japan’s biggest automaker in the Philippine car market.

The Toyota Hiace minivan replaced the Toyota Innova multipurpose/Asian utility vehicle on third place, indicating a purchase upgrade by consumers with recently increased buying power.

Top 8 midsize SUVs/crossovers

(first semester 2016 and 2015)

In its list of year-to-date (YTD) sales figures, TMP listed 550 units of the Land Cruiser. Since the latter is a full-size SUV and no figures were given for the Land Cruiser Prado, which is a midsize SUV, neither is included in the table above.

Toyota, Ford and Mitsubishi captured the top three spots by rolling out all-new models of the Fortuner, Everest and Montero Sport in the first half of the year.

At the same time, the Ford Everest overtook the Mitsubishi Montero Sport to grab second place by a small margin, and demoted the Isuzu Mu-X from third to fourth place.

Despite alleged SUA (sudden unintended acceleration) issues, the Montero Sport has managed to stay in the top three circle.

Notice that YTD, sales of the midsize SUVs listed among the top eight in 2015 went up except the Chevrolet Trailblazer and the Toyota FJ Cruiser, which Toyota Japan has announced will stop production eventually.

The all-new Ford Everest scored the biggest jump, from 306 units of the old model in the first half of 2015 to 6,961 YTD, while the Toyota Fortuner achieved a five-digit sales figure for the first time.

The Hyundai Santa Fe made it to the top eight for the first time, but may have been included last year if Hyundai Asia Resources Inc. had revealed the number of units it sold of its midsize SUV/crossover.

Top 10 compact SUVs/crossovers

(first semester 2016 and 2015)

The compact SUV top 10 list for 2016’s first semester is the only one where a Hyundai is No. 1 and a Toyota is not among the top three best-sellers.

Two new nameplates, the Nissan Juke and Honda HR-V, displaced the Kia Sportage and Ford Escape from the roster.

The funky Nissan Juke’s (1,158 units sold YTD) grabbing second place is particularly surprising because it entered the market only last January.

The success of the Hyundai Tucson could be traced in part to its offering a common rail direct injection diesel engine, which its rivals do not. Moreover, a lower-priced, gasoline-fed Tucson is also available.

The Kia Sportage, with 133 units sold in the first half this year, down from 230 in the year-ago period, did not make it this time to the 2016 list.

Top 5 pickup trucks

(first semester 2016 and 2015)

The same nameplates occupy the top five slots in the 2016 and 2015 first half of the year sales rivalry, except that this year the Toyota Hilux grabbed pole position by posting a convincing 2,189 units over 2015 leader Ford Ranger.

The Mitsubishi Strada, Nissan Navara, and Isuzu D-Max retained their 2015 rankings, but the Navara appears poised to overtake the Strada for third place.

Strada sales declined by 425 units compared to the year-ago period, while Navara sales improved by 168 units.

 

 

Top 5 MPVs/AUVs

(first semester 2016 and 2015)

The big winner here is the Honda Mobilio which jumped from sixth place in the first half of 2015 to fourth this year, thanks to 2,167 units sold compared to only 592 in the same year-ago period.

In the process, the Mobilio dislodged the Isuzu Crosswind despite the latter’s posting 400 units more in sales compared to its performance in the year-ago period.

Surprisingly enough, sales of the Toyota Innova slid compared to last year’s first half, but it was still good enough to clinch first place once again.

The Innova’s loss was probably Toyota Hiace’s gain. After the Vios and the Fortuner, the Hiace was the third best seller of Toyota in the first half this year.

Top 5 minivans

(first semester 2016 and 2015)

The all-new Kia Carnival rose in sales and ranking in the first semester this year compared to the year-ago period, from only 70 units sold to 433 YTD, and from fourth to third place.

The Toyota Hiace is still way ahead of all competitors in the minivan segment, including the Hyundai Starex which made its first appearance this year as it was only this year that Hari disclosed sales figures of its models.

The Toyota Alphard, Honda Odyssey and Kia Grand Carnival are premium minivans that cost a lot more than the popular Hiace or Starex, which is why their sales figures are much lower.

Top 5 executive cars

Midsize sedans or wagons are acquired as company wheels for middle-level corporate execs who haven’t reached the veep level yet.

This category was not included in last year’s semestral report, so the list below will only cover the first half of 2016.

The top five executive cars from the period of Janunary to June this year are:

1. Toyota Camry (244)

2. Subaru Legacy (77)

3. Subaru Levorg (69)

4. Mazda 6 SkyActiv (59)

5. Honda Accord (47)

Again, it is not surprising that a Toyota leads the pack. What is surprising is that the Honda Accord fell behind the Subaru Legacy sedan, Subaru Levorg sports wagon, and the Mazda6 SkyActiv (sedan and sports wagon) in sales.

The other executive cars available locally are (alphabetically listed) the Chevrolet Malibu, Hyundai Azera, Hyundai Sonata, Kia Optima, Peugeot 508, Suzuki Kizashi and Volkswagen Passat.

Like Suzuki Philippines, Automobile Central Enterprise Inc., the local distributor of VW, declined to submit its sales data.

Top 10 compact cars

This is a lucrative segment where nine brands compete for bigger market share. Again, this segment was not included in last year’s semestral report, so there is no way to compare it with the year-ago sales figures.

The top 10 compact cars during the period under review are:

1. Toyota Corolla Altis (2,265)

2. Mazda3 SkyActiv (665)

3. Hyundai Elantra (647)

4. Honda Civic (432)

5. Kia Forte (153)

6. Nissan Sylphy (140)

7. Subaru WRX (126)

8. Ford Focus (106)

9. Mitsubishi Lancer (105)

10. Subaru Impreza (12)

Toyota Motor Philippines sold 1,600 more Corolla Altis units than the second placer, the sleek and sporty Mazda3 SkyActiv.

The Hyundai Elantra beat the Honda Civic for third place while the Subaru WRX, the choice of wannabe race drivers, got in at seventh place despite its high price (at least P1.818 million).

The compact cars that failed to make the list this time are (alphabetically listed) the Chevrolet Cruze, Peugeot 308 and Volkswagen Jetta.

Top 9 subcompact cars

Competition in the subcompact cars segment is almost as intense as in the mini subcompact segment as the motorization of the country continues apace and more car buyers graduate from the entry level mini vehicles to subcompacts.

In the subcompact cars category, the top nine best sellers from January to June this year are:

1. Toyota Vios (17,022)

2. Hyundai Accent (5,712)

3. Honda City (4,592)

4. Nissan Almera (1,245)

5. Honda Jazz (949)

6. Toyota Yaris (855)

7. Kia Rio (568)

8. Mazda2 SkyActiv (502)

9. Ford Fiesta (464)

While the Toyota Vios outsold everyone by over 10,000 units, being the country’s best-selling car in all categories, the Hyundai Accent took second place, outrunning the popular Honda City.

The big surprise was the Nissan Almera, which grabbed fourth place.

The Honda Jazz, which is priced almost as high as a compact car, still managed to rank among the top five.

Mazda SkyActiv vehicles keep popping up in best seller lists (compact SUVs/crossovers, executive cars, compact cars and subcompact cars), attesting to the success of its SkyActiv technology and Kodo soul in motion design philosophy.

Top 5 mini subcompact cars

The entry level for people buying their first car, the lucrative mini subcompact market in the Philippines, was discovered by major industry players some years ago.

Mitsubishi Motors beat everyone, including Toyota, and so far has managed to hold on to pole position with the Mirage.

The five best selling mini subcompact cars during the first semester of 2016 are:

1. Mitsubishi Mirage (9,978)

2. Toyota Wigo (8,726)

3. Hyundai Eon (4,783)

4. Kia Picanto (1,967)

5. Chevrolet Spark (38)

The Mirage is doing so well that Mitsubishi Motors is entering it in the Comprehensive Automotive Resurgence Strategy (CARS) program with the plan to manufacture 200,000 units over the next six years.

The advantage of the Mirage is that it is available in two variants: the G4 sedan and the hatchback.

The Hyundai Eon and Kia Picanto were sold locally long before the Mirage and the Wigo entered the fray, but they both lost market share to the two newcomers.

Top 3 subcompact SUVs/crossovers

This is where Ford Philippines scooped other industry players by bringing in the budget-sized, budget-priced Ford EcoSport while no one was expecting anything like it.

The EcoSport took the market by storm and soon became Ford’s second best-selling model after the all-new 2016 Everest.

Coming across as the top three best selling vehicles in the subcompact SUVs/crossover segment from January to June this year are:

1. Ford EcoSport (4,367)

2. Chevrolet Trax (339)

3. Kia Soul (134)

Chevrolet scrambled to introduce the Trax as its answer to the EcoSport, but by then Ford was already enjoying a head start.

The Kia Soul failed to keep up with EcoSport sales.

The Suzuki Jimny belongs to this segment, but unfortunately its sales figures were not disclosed by Suzuki Philippines.

Summing up

Given the numbers chalked up in the first half, will the Philippine automotive industry achieve its 350,000 total sales target by year-end?

Industry leaders are cautiously optimistic, if not outright bullish.

If consumer confidence and the country’s motorization continue to remain upbeat and the rollout of the CARS program succeeds, the industry may yet reach its ultimate sales target of 500,000 units by the year 2020.