Brakes not hit as slump in vehicle sales persists in July
MANILA, Philippines — Vehicle sales sustained a double-digit annual decline in July, putting the industry on set for its only third year of drop for the past decade, industry data released Friday showed.
Manufacturers sold 10,542 of cars and trucks in July, down 35.4% from year-ago levels, according to a joint report by the Chamber of Automotive Manufacturers of the Philippines INc. (CAMPI) and Truck Manufacturers Association.
From January to July, vehicle sales plummeted 48.7% on-year to 105,583, which means meeting the already tempered target sales of 240,000 units this year challenging. “This volume reduction can have serious operational and financial impact on the automotive industry,” CAMPI President Rommel Gutierrez said in a statement.
Car sales are good indicators of economic activity so much so that the central bank, in its monetary policy meetings, consider appetite for vehicles as an input on making policy decisions. Indeed, in the past 8 of 10 years that car purchases rose, the economy recorded sterling growths.
In the three years that sales went down— 2011 and 2018— economic growth slowed and fell behind government expectations. This year, with the pandemic lingering on the background, last year’s recovery in vehicle sales are bound to be cut short.
The chronic annual decline in sales highlights the impact of the coronavirus disease-2019 (COVID-19) pandemic on the industry, as lockdowns meant to arrest virus spread crippled factory operations and sapped overall demand for durable goods.
But there were some signs of recovery as month-on-month, sales picked up 32%.
“It is understandable that achieving the industry’s average monthly pre-COVID-19 level remains elusive and a challenge at the same time amid this pandemic and the recent pronouncement of economic recession,” Gutierrez said.
“But this month-on-month of nearly 32% growth is what the industry needs at this point to achieve its sales forecast,” he added.
Broken down, commercial vehicles accounted for the bulk of sales in the seven-month period at 75,514, down 47.6% year-on-year.
Light utility vehicles, including commuter vans and pick-ups, followed with 56,854, shrinking by 75.3% on an annual basis. Passenger cars, meanwhile, dropped 51.4% from year-ago to 30,069.
Smaller Asian utility vehicles went down a little more than a quarter on-year to 14,810, data showed. Light trucks inched down 2.7% to 2,043, while combined sales of various categories of trucks and buses plummeted 48.6% year-on-year to 1,807.
“We have submitted some recommendations for industry support, which are now under study by the (trade department),” Gutierrez said.
“The industry is doing all it can to sustainably provide sales promotions to encourage customers amid another stricter community quarantine for this month,” he added.
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