334 week ago — 4 min read
Sales of automobiles in the Philippines are experiencing a slowdown in the first half of 2018 (H12018) as compared to equivalent sales number in the first half of 2017 (H12017). Despite this statistic, auto sales are expected to recover given growth in OFW remittances and the settling down of the after effects of the tax reform. An analysis of the automotive industry for H1-2018 is provided.
Highlights
• According to the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA), vehicle sales in the first six (6) months of the year totaled 171,352 units, down by 12.5% compared to the same period in 2017.
• The Association of Vehicle Importers and Distributors (AVID) saw an 11% decline in sales at 43,138 units. This brings the industry’s total sales down by 12.24% to 191,470 from the 281,170 units sold in H12017.
Breakdown of market share by car type and industry leaders
Economic factors inhibiting automobile sales
• Economic headwinds slowed down auto sales from Jan-Jun 2018. The Tax Reform for Acceleration and Inclusion (TRAIN) Act continues to take its toll on driving auto prices up. The market is still adjusting to the new excise tax regime.
• Excise taxes from automobile fell short of the PhP3.4 B goal. Collections amounted to PhP2.92 B, 40.62% higher than the PhP2.08 B last year.
Future Projection: Prospects are bright for automotive sector
• However, auto sales are expected to recover due to growing OFW remittances and tampering effects of the tax reform.
• Consumer preference shifted towards cars that are known to safety (i.e. SUVs). To come up with more fuel-efficient cars, more crossover utility vehicles (CUVs) were introduced such as Toyota Rush, Mitsubushi Xpander and Honda BR-V.
Article by Ruben Carlo O. Asuncion, UnionBank's Chief Economist
Note: Any opinion or statement in the Philippine Outlook does not constitute the opinion of UBP. Your use of this document and any of its contents is at your own risk and UBP does not accept any liability for the results of any action or decision taken on the basis of or reliance on the Philippine Outlook or any of its content.
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