Weak peso drags Isuzu truck sales

ISUZU Philippines Corp. posted lackluster truck sales in the first half due to the depreciating peso, but demand could recover in the second half with the government’s jeepney modernization program and heightened safety standards, a company official said.
“For the first half, medyo down kami dahil sa BP (body parts) namin . . . The whole industry naman nag-down noong first half. Maraming factors kasi a lot of players are coming in. We’re affected by forex,” Mario M. Ojales, head of Isuzu’s fleet sales department, said in an interview in Pasay City.
(For the first half, sales were slightly down because of body parts . . . The whole industry is down in the first half. The factors include a lot of players are coming in. We’re affected by foreign exchange.)
The components of the company’s auto production are sourced mostly from Japan, and a weak peso means spending more to import these parts, he said.
However, for the second semester, Isuzu expects to bounce back to normal levels as it pins its hopes on the government’s broader promotion for safety.
Mr. Ojales said the government had become stricter when it comes to safety. He said end-users such as trucking companies had learned after using used vehicles without warranty and available spare parts.
The company official said prices of brand new units are close to matching those of second-hand or used trucks unlike before when the price difference could go as wide as half that of a brand new unit.
Isuzu is also taking the opportunity of supplying the government with electric jeepneys.
“We’re eyeing around 400 units for this year,” Mr. Ojales said about the company’s current focus.
But he said there are “hindrances” such as payment for the vehicles. He said the company wants to be assured that it will be paid. He said there is a big demand for the vehicles, but there is no assurance that the banks will approve the government program.
He said the company is ready to supply the vehicles, but it wants more clarity on the part of the government. He added that once the rules are clear, the 400 units can easily be delivered.
Mr. Ojales said that although Isuzu’s pricing may be higher, it compensates by including as part of the sales package its services and a three-year warranty.
Isuzu targets to sell 9,000 units of trucks this year, higher by 10% compared with last year’s level. The bulk of the sales target is expected to come from light-duty, medium-duty and heavy-duty vehicles.