Philippine car sales post growth for Jan-Feb

Strong car sales in January continued in February, gmanews.tv reported. Sales were largely driven by demand for vehicles for business use, according to industry data released Tuesday.

“Strong car sales reflect a stronger economy with the bulk of the volume coming from CVs [commercial vehicles], particularly the Asian utility vehicles (AUV) and light commercial vehicles (LCV)—most of which have dual-purpose utility that functions as both for family and business use. This trend is forecasted to remain strong and will continue to support vehicle sales in the coming months,” said Elizabeth Lee, president of the Chamber of Automotive Manufacturers of the Philippines, Inc. (Campi), in a statement.

LVCs – vans, pick-up trucks and compact wagons – accounted for 10,439 units sold in the first two months of the year, posting 47.4 percent better and registering an increase of 7,083 from the same period last year.

Lee attributed the increase in sales to OFWs, who are probably buying the vehicles as returns to their investments. “Filipinos get more educated and exposed to various instruments that yield a higher return for their hard-earned money. Increased business activity comes with it the increase in vehicle sales,” she said.

Year-on-year rise

Industry sales last month grew 40 percent from last year’s figures, with 12,573 units sold -- a 6.9 percent increase from January’s 11,763 units, reports the Manila Times.

The first two months of the year allowed the automotive industry to post a 37 percent expansion in sales, with 24,336 units sold compared to 17,818 units in 2009 for the same period.

Toyota Motor Philippines Corp. remained the industry leader with Mitsubishi Motors Philippines Corp. and Honda Cars Philippines Inc. at second and third, respectively.

Waning domestic production

In March 2008 only five out of 14 registered car assemblers and 256 parts and components companies were still operating in the country, according to a paper from the Philippine Institute for Development Studies.

After industry deregulation in the 1990s followed by trade liberalization, the remaining manufacturing firms in the Philippines are Toyota, Honda, Mitsubishi, Isuzu, Nissan and Ford.

Since 2003, domestic production has waned while the number of completely built unit (CBU) imports has increased from 8 percent of total sales in 2003 to 48 percent or nearly half of total sales in 2007, which may have been due in part to the country's commitment to the ASEAN Free Trade Area-Common Effective Preferential Tariff (AFTA-CEPT) scheme which reduced the tariff on CBU imports to five percent in 2005, the paper said. The tariff was eliminated completely this year.

According to the National Statistics Office, 8.3 percent of the country's estimated 35,060 workers were employed in the manufacturing sector as of 2008.

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