Vehicles are seen plying the South Luzon Expressway in Muntinlupa City. — PHILIPPINE STAR/RUSSELL PALMA

By Justine Irish D. Tabile, Reporter

New vehicle sales jumped by an annual 23.2% in February, the fastest growth in seven months, according to a joint report by the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA).

The industry report sent Tuesday night showed that vehicle sales increased to 38,072 units in February from 30,905 units in the same month a year ago.

At 23.2%, this is the highest year-on-year growth in seven months or since the 33.3% sales growth in July 2023.

Auto Sales (January 2024)Month on month, vehicle sales also rose by 11.8% from the 34,060 cars sold in January.

In a statement, CAMPI President Rommel R. Gutierrez attributed the higher sales in February to “early marketing campaigns and improved inventories supported by stable interest rates.”

“We hope to keep this momentum and achieve a strong first quarter finish, which will set the outlook for 2024,” he said.

The Bangko Sentral ng Pilipinas kept its benchmark interest rate at a near 17-year high of 6.5% in February, marking the third straight meeting that it left rates unchanged.

From May 2022 to October 2023, the central bank raised borrowing costs by 450 basis points.

In February, commercial vehicle sales climbed by 19.9% to 28,434 from 23,716 in the same month a year ago. This accounted for 74.7% of the industry’s total sales.

Month on month, sales of commercial vehicles went up by 11% from 25,614 units sold in January.

Broken down, light commercial vehicle sales rose by 17.7% to 21,236, while Asian utility vehicle (AUV) sales rose by 29.9% to 6,360. Sales of light commercial vehicles and AUVs grew on a month-on-month basis by 12% and 7.9%, respectively.

In February, sales of light and heavy trucks increased by an annual 17.8% and 8.9% to 516 and 61, respectively. Light truck sales went up by 25.2% on a month-on-month basis, while heavy truck sales were down 3.2% from January.

Sales of medium trucks declined by 10.3% year on year to 261 in February and by 7.4% month on month.

Meanwhile, passenger car sales rose by an annual 34.1% to 9,638 units in February from 7,189 units a year ago. Month on month, sales of passenger cars went up by 14.1% from 8,446 units in January.

For the first two months of the year, vehicle sales went up by 19.4% year on year to 72,132 units.

Commercial vehicle sales rose by 18.2% to 54,048, while passenger car sales jumped by 23.1% to 18,084 in the January-to-February period.

As of end-February, Toyota Motor Philippines Corp. remained the market leader with a 45.9% share as its sales rose by 16.9% to 33,070 units.

Mitsubishi Motors Philippines Corp. came in second with a 24.5% increase in sales to 13,271 units in the January-to-February period.

In third spot is Ford Motor Co. Phils., Inc. as sales jumped by 24.1% to 5,178 units.

Rounding out the top five were Nissan Philippines, Inc., which saw a 45.6% increase in sales to 5,148 units, and Suzuki Phils., Inc. which posted a 0.4% rise in sales to 2,950 units.

“The sustained double-digit growth in vehicle sales may still be attributed to the continued pickup and recovery of many businesses and industries from the pandemic,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

He noted demand for big-ticket items such as vehicles continued, despite the elevated interest rates since 2022.

“It is important to note that the sustained double-digit growth in vehicle sales is more than three times the country’s economic growth,” he added.

The Philippine economy grew by 5.6% in 2023, which is slower than the 7.6% expansion in 2022 and the government’s 6-7% target for 2023.

“For the coming months, possible Federal Reserve rate cuts later in 2024 that could be matched locally could help spur greater demand for vehicle sales,” Mr. Ricafort said.

Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said vehicle sales growth may have been driven by the introduction of new models of electric vehicles (EVs) and plug-in hybrids as well as discounts and financing deals.

“Infrastructure projects such as road construction and improvements may have also increased demand for vehicles, particularly commercial vehicles like trucks,” Mr. Arce said.

He said that consumer demand for new vehicles may be sustained if the economy “remains stable or continues to grow.”

However, Mr. Arce said “changes in government policies related to automotive industry regulation, taxation, or incentives could affect consumer behavior and sales.”

Earlier this month, the National Economic and Development Authority (NEDA) said that there was a discussion between agencies on the possible expansion of Executive Order (EO) No. 12, which grants incentives for EVs, to include e-motorcycles and hybrid vehicles.

Meanwhile, Regina Capital Development Corp. Head of Sales Luis A. Limlingan said that the strong vehicle sales in February “signals a robust recovery, fueled by increased consumer confidence and strategic marketing efforts.”

“Dominance by GT Capital Holdings Inc.’s Toyota highlights market consolidation. However, risks such as supply chain disruptions warrant monitoring,” Mr. Limlingan said in a Viber message.

“Despite challenges, the industry’s 9% sales growth target for the year reflects optimism for sustained momentum. Investors should stay vigilant amid evolving market dynamics,” he added.

For 2024, CAMPI gave a conservative sales forecast of 468,300 units, 9% up from the 429,807 units sold in 2023.