MANILA, Philippines — Car manufacturers in the Philippines opened the year with a double-digit sales growth, tracking the economy’s recovery from the pandemic.
Total motor vehicle sales in January stood at 29,499 units in January, up 42.1% year-on-year, a joint report by the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) and Truck Manufacturers Association (TMA) showed on Monday.
But the January sales were 20.8% lower compared to the December tally. Nevertheless, CAMPI President Rommel Gutierrez chose to highlight the year-on-year figure which, he said, was “a good development momentum for the auto industry as we start the year.”
“The auto industry is optimistic of its continued expansion from the demand-side standpoint driven by the growing domestic consumer market,” he added.
Vehicle sales are often used as barometer of economic strength. The central bank, for instance, closely follows this gauge to measure consumer appetite for durable goods.
Household consumption represents 70% of annual economic output, and big purchases like cars materially add to gross domestic product when produced more.
In 2022, the economy grew at an average of 7.6% year-on-year, a figure that exceeded expectations as consumption showed resilience in the face of a multi-year high inflation.
READ: Philippine economy grows 7.6% in 2022, beating target and expectations
Breaking down CAMPI and TMA’s report, sale of passenger cars, which cornered a 24.44% market share last month, jumped 29.8% year-on-year to 7,506 units in January. But month-on-month, sales under this segment sagged 12.86%.
Meanwhile, the auto industry sold 21,993 commercial vehicles in January, up 46.8% compared with a year ago. But this segment, which accounted for 74.56% of the industry’s total sales in January, saw a 23.2% decline in sales on a month-on-month basis.
Gutierrez said local carmakers are aware of the lingering headwinds that they’re facing, adding that last year’s target-beating sales won’t guarantee another stellar performance in 2023.
“The supply-side challenges are also an important factor that the industry is mindful of as this may hamper the industry growth,” he said.
“The auto sales sustained growth or exceeded the last year’s record is not always clear-cut as our overall economic health and activity depends on various economic key indicators,” he added.