Cautious optimism after car sales post double-digit growth in May

MANILA, Philippines — Car sales posted a double-digit growth in May, but the auto industry is staying "on guard" amid threats of renewed lockdowns that could snap the fragile rebound.

What’s new

A total of 22,062 vehicles were sold in May, up 23.6% on a month-on-month basis, according to a joint report by the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) and Truck Manufacturers Association (TMA) released Monday.

At the same time, car sales jumped an annualized 361% rate last month due to the so-called base effect, which means the current sales appeared stronger when compared year-on-year because the pandemic sank the 2020 figures.

Why this matters 

Vehicle sales are often used as barometer of economic strength. The central bank, for instance, closely follows this 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.

What VIPs say

CAMPI President Rommel Gutierrez attributed last month’s surge to “more relaxed” pandemic restrictions in Metro Manila and four nearby areas. But Gutierrez said carmakers are still watching out for risks of fresh lockdowns that could dent demand again.

“The industry remains optimistic of a nascent recovery but at the same time on guard for any downside risks of the pandemic particularly if lockdowns are re-imposed in NCR plus and in other regions resulting in a tepid consumer confidence,” he said in a statement.

Other figures

• From January to May, car makers sold 110,217 units, up 58.7% year-on-year. The industry is hoping for a 30% on-year sales growth in 2021.
• Of the total sales last month, commercial vehicles accounted for 66.56%. Cars sold under this segment increased 17.8% month-on-month to 14,463.
• Sales of passenger cars, which cornered a 34.44% a market share, went up a bigger 36.43% month-on-month in May to 7,599.