By Jenina P. Ibañez, Reporter
IMPORTED vehicle sales steadied in 2019 as the number of passenger cars and light commercial vehicles sold dipped only slightly compared with the previous year, according to the Association of Vehicle Importers and Distributors, Inc. (AVID).
In a report released on Tuesday, AVID said full-year 2019 sales slipped 0.5% to 87,984 from an updated 88,430 units the year before.
In 2018, the drop in imported car sales was deeper at 16.8% with the impact of high inflation rates and new tax hikes on the industry.
Combined with sales figures from the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA), the automotive industry breached its sales target of 410,000 with 457,925 vehicles sold last year.
AVID President Ma. Fe Perez-Agudo said sales in December, which went up 12% to 8,089 compared with the same month in 2018, bodes well for the automotive industry in 2020.
“The continued easing of inflation rates, lower fuel prices, and increased government spending will only bolster sales for the group. We will complement these positive indicators with new models, value-packed service offerings, and easier ownership schemes,” she said.
Passenger car sales in 2019 declined 0.5% to 30,726 units from 30,876 cars in 2018. Light commercial vehicle sales dipped 1.1% to 56,351 units in 2019, from 56,999.
Commercial vehicle sales jumped 63% to 907 units last year, led by sales of Hyundai trucks and buses.
In December alone, passenger car sales grew 5% to 2,608 units sold, while light commercial vehicle sales jumped 16% to 5,362 units. Commercial vehicle sales grew 2% to 119 units.
In an e-mail, ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said that road vehicle sales continued to struggle in 2019 due to subdued demand for cars.
“The subdued demand for cars and durable equipment in general was what defined 2019 GDP growth and was one of the main reasons why Philippine growth slipped below target and below potential,” he said.
He said durable equipment purchases helped support an investment boom in the country. But recent rate hikes from the central bank to rein in inflation expectations slowed capital formation.
According to the consumer expectation survey of the Bangko Sentral ng Pilipinas (BSP), 17.9% of Philippine households considered the fourth quarter of 2019 a good time to buy motor vehicles, from 16.2% in the same quarter of 2018.
“Going forward, the 2019 BSP policy reversal bodes well for car sales and investment activity in general, as Governor Benjamin E. Diokno looks to unwind some of that 175 bps (basis points) rate hike from 2018. Already dialing back 75 bps worth, Diokno will likely cut policy rates gain by 25 bps in February, to help bolster loan demand and rekindle the Philippine investment momentum,” Mr. Mapa said.
AVID said that the industry expects to gain traction after the approval of the P4.10 trillion national budget in 2020.
“With the public works and highways department having one of the largest shares of the budget, it is expected that industry performance will gain traction in the new decade with the help from its importers bringing in more models that meet the requirements of various markets for the Filipino people,” the statement said.