Philippine car sales gaining momentum

At long last, after a dreary first two months of the year, automotive industry sales are picking up.

The Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) together with the Truck Manufacturers Association, Inc. (TMA) posted an encouraging 22 percent increase in sales in March 2019 compared to February 2019, while the Association of Vehicle Importers and Distributors (AVID) reported an 8 percent increase in March this year versus March last year.

CAMPI and TMA consist of 21 car, truck and motorcycle brands while AVID has 13 automotive brands as members.

CAMPI and TMA reported that sales last March hit 32,173 units compared to 26,327 in February, indicating a 22 percent growth and a 14 percent increase over the 28,216 units sold in March 2018.

CAMPI president and concurrent Toyota Motor Philippines 1st vice president Rommel Gutierrez saw these figures as a sign that the industry is rebounding from its dismal performance in 2018.

“The double-digit growth during the month of March compared to the same month last year is a strong indication that the automotive industry is well on its way to recovery,” Gutierrez said in a press release. “We are optimistic that the trend will be sustained in the coming months.”

CAMPI remains optimistic despite the fact that total industry sales in the first quarter this year was 0.8 percent lower at 85,388 units sold versus 86,037 in the same year-ago period.

Meanwhile, AVID reported 7,952 units sold in March 2019 versus 7,380 units in March last year, reflecting an 8 percent increase. However, for the first quarter this year, AVID sold 22,497 units, 3 percent less than the 23,038 sold in the same period in 2018.

AVID president and concurrent Hyundai Asia Resources, Inc. (HARI) president and CEO Ma. Fe Perez-Agudo claimed that “AVID’s first quarter 2019 performance indicates that the automotive industry has turned the corner and is now experiencing modest recovery. We expect a further upturn in the next three quarters on the back of improved consumer sentiment, the introduction of exciting and innovative vehicles, and the government’s aggressive infrastructure program. If positive economic fundamentals, including low inflation and rising living standards are sustained, we can expect a renewed boost to motorization in the country.”

She added that the combined effects of easing inflation, lower unemployment rates, and near-term boost from election-related spending is expected to fuel private consumption for the rest of 2019.

Indeed, as the Inquirer’s editorial noted last Monday, the global debt watcher Standard & Poor’s upgraded the Philippines’ credit rating to “BBB+ Stable,” the highest ever attained by the country and just a notch away from the coveted “A” rating. S&P views the Philippine economy as poised to maintain its strong trajectory over the medium term, growing at a consistently faster pace than that of its peers as long as the current level of investments is maintained.

(The Board of Investments, in fact, reported that approved foreign investments surged 2,224 percent to P66.9 billion in the first four months of 2019 from just P2.9 billion in January to April 2018.)

Top 10 movements

Going back to the top 10 performers as of year-to-date (YTD) March 2019, the most notable movements are Nissan PH’s retention of the No. 3 rank, and the ouster of The Covenant Car Company, Inc (TCCI), the Philippine distributor of Chevrolet, from No. 10 by Bermaz Auto, which imports and distributes Mazda vehicles from Japan.

Nissan wrested the coveted No. 3 spot from Hyundai Asia Resources, Inc. (HARI) last February by posting 6,623 unit sales versus Hyundai’s 6,537. Up until then, Hyundai had held on to No. 3 for nine consecutive years, beginning in March 2010 when HARI surpassed third placer Honda Cars PH, Inc.

Nissan toppled Hyundai when its sales leaped 73.9 percent last February from the same month in 2018. And although Nissan’s lead of only 86 units over Hyundai was meager last February, by the end of the first quarter it had widened its margin to 1,529 by scoring 11,239 units sold compared to HARI’s 9,710.

Nissan PH’s astounding growth is credited to Ramesh Narasimhan, the president and managing director, who was succeeded by Atsushi Najima last March. Industry observers are now waiting to see if Najima will be able to expand Nissan PH’s performance even more.

MAZDA ENTERS, BUT BARELY

The second surprising change in the top 10 list is Mazda (Bermaz Auto)’s entry, thereby pushing Chevrolet (TCCI) off the list altogether.

For several years now, Chevy has been the cellar dweller after being overtaken in sales by the upstart from China, Foton Motor PH.

TCCI’s sales in the first quarter this year finally fell far below 1,000 units to only 625, and although Mazda’s performance was also below 1,000 units sold at 679, it was more than TCCI’s and barely opened the door to the top 10 honor roll.

With the decline of TCCI, the only AVID member remaining on the list is Hyundai.

Quite a few brands eased financing requirements, such as drastically lowering the minimum down payment, to boost sales in the first quarter. For example, Honda ran a broadsheet newspaper ad offering the 7-seater CR-V diesel crossover at a P35,000 down payment for a limited period of time.

Marching on

Summing up, Toyota Motor PH and Mitsubishi Motors PH continue to march on as the indisputable No. 1 and No. 2 leaders, while Honda, Ford, Suzuki, Isuzu and Foton maintain their presence on the top 10 list below third placer Nissan and fourth placer Hyundai.

Among the top 10, only Nissan, Honda and Foton increased their shares of the market in the first quarter: Nissan by selling an amazing 11,239 units versus only 5,873 in the first quarter of 2018, and Foton by selling 1,197 units compared to 1,141 in the same year-ago period.

Honda scored 6,403 in sales in January-March 2019, an improvement over 6,180 in the first quarter of 2018.

The YTD March 2019 sales figures have inspired cautious optimism among auto industry players that there is light at the end of the tunnel, and the rest of the country is looking forward to that with them.