PHL car sales growth slows in March

By means of Justine Irish D. Table, News reporter

PHILIPPINE AUTOMOTIVE sales rose 1.6% to 37,474 units in March, the slowest in more than two years, amid high interest rates, an industry report showed.

A joint report by the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA) showed that car sales rose from 36,880 units a year earlier.

This was the slowest sales growth since the 7.3% decline in February 2022.

Month-on-month sales fell 1.6%, compared to 38,072 units in February.

Commercial vehicles continued to drive the sector’s performance in March as sales rose 2% from a year earlier to 27,347 units. They accounted for 73% of the total turnover.

However, sales of commercial vehicles fell by 3.8% from a month earlier.

Sales of commercial vehicles in Asia (AUV) rose 23.4% to 6,421, the only commercial vehicle segment to post annual growth. Month over month, AUV sales increased by 1%.

Sales of light commercial vehicles fell 2.6% to 20,101, while sales of light trucks fell 1.3% to 447. Sales of medium trucks fell 17.8% to 333 units, while sales of heavy trucks fell by 61.5% to 45.

Month-on-month sales of light commercial vehicles, light and heavy trucks also fell by 5.3%, 13.4% and 26.2% respectively.

On the other hand, mid-size truck sales grew 27.6% month-over-month.

In March, passenger car sales rose 0.7% to 10,127 units compared to a year ago. Month on month, passenger car sales increased by 5.1%.

Michael L. Ricafort, chief economist of Rizal Commercial Banking Corp., said the slower year-on-year growth was due to higher base effects.

“The slower year-on-year growth in car sales, at low single-digit levels, was due to higher base or denominator effects,” Mr Ricafort said.

“Higher inflation and interest rates that pushed up borrowing and financing costs, including for auto loans, also started to slow demand,” he added.

The Bangko Sentral ng Pilipinas (BSP) has kept its benchmark interest rate steady at a near 17-year high of 6.5% since October 2023 to curb inflation.

Inflation accelerated from 3.4% in February to 3.7% in March.

REVENUE IN Q1 13% INCREASED

In the first quarter, car sales grew 12.7% year-on-year to 109,606 units.

Commercial vehicle sales rose 12.2% to 81,395, while passenger car sales rose 14% to 28,211 in the January to March period.

“Sales performance to date has been driven by continued demand for new vehicles, supported by an overall improvement in supply,” CAMPI President Rommel R. Gutierrez said in a statement.

“Our first quarter performance keeps us on track to achieve our 2024 target,” he added.

For 2024, CAMPI gave a conservative sales forecast of 468,300 units. However, the group expects sales to reach 500,000 as the ninth Philippine International Motor Show is held in the second half.

At the end of March, Toyota Motor Philippines Corp. market leader with a 45.3% share, while sales increased by 9.9% to 49,667 units.

Mitsubishi Motors Philippines Corp. ranked second with a 19% market share as it posted a 17.5% sales increase to 20,867 units in January to March.

In third place was Nissan Philippines, Inc., whose sales rose 23.7% to 7,909 units.

The top five was completed by Ford Motor Co. Phils., Inc., which saw a 27.8% increase to 7,531 units, and Suzuki Phils., Inc., whose sales fell 1.9% to 4,395 units.

Mr. Ricafort said the double-digit sales growth in the first quarter “is a good signal for the continued recovery of the Philippine economy, as well as the country’s favorable demographic conditions.”

“In recent months, the Philippines has experienced one of the highest growth rates for both car sales and car production in the Association of Southeast Asian Nations (ASEAN), consistent with the country experiencing one of the fastest economic growth rates in the ASEAN.” he added.

Data from the ASEAN Automotive Federation shows that Philippine motor vehicle production grew 20.9% to 22,379 units from January to February, compared to 18,510 last year. It was the second fastest growth and faster than the region’s 11.2% contraction.