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AVID sales inch up by 8% in March:
Auto sector starting to rebound?

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By Kap Maceda Aguila

AS WE get deeper into 2019, more distance is being put between last year and its woeful effects on the local automotive industry — largely because of the Tax Reform for Acceleration and Inclusion (TRAIN) Law, which came in effect in the beginning of 2018. To be fair, the measure, which effectively levied additional excise taxes on new vehicles while providing fiscal relief for hybrids and exceptions for electric vehicles and pickups, had been well-communicated before the axe fell in the beginning of 2018. Car buyers largely hung on to their checkbooks last year, even as the market saw a surge of late-2017 purchases.

In effect, TRAIN — conceived to basically bankroll the government’s push for enhanced and increased infrastructure — effectively stymied what had been an excellent multi-year run of growth for the sector.

So, with an industry hard-pressed for good news, the disclosure recently of the Association of Vehicle Importers and Distributors, Inc. (AVID) is a welcome one. The business association “pioneered by 11 leading automotive firms representing 20 world-class brands in the Philippines” reported an 8% hike in sales last March compared to the same month last year. “This bucks the trend in the first two months of the year which saw a decline of 8%. For the first quarter of 2019, AVID sold 22,497 units, 3% lower than the 23,038 units reported in the same period last year,” it reported in a statement.

AVID President Ma. Fe Perez-Agudo said: “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. AVID aims to be at the forefront of this growth in vehicle sales.”

In March 2019, the light commercial vehicle (LCV) segment alone hiked by a hefty 21% year-on-year increase with a total of 4,998 units moved. This made it the primary volume driver. LCV sales rose by 4% in the first three months of the year, for a total of 14,168 units. AVID reported that Ford leads the segment with 5,456 units sold in the first quarter.




On the other hand, AVID’s passenger car (PC) segment “declined 9% to 2,831 units in March, and fell 13% to 7,993 units in the first quarter of the year.” With 5,404 units sold during the period, Hyundai maintains segment leadership. Finally, commercial vehicle sales dipped by 2% to 123 units in March and by 1% to 336 in the first quarter.

“If positive economic fundamentals, including low inflation and rising living standards, are sustained, we can expect a renewed boost to motorization in the country,” added Ms. Agudo. AVID expects “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.”