Local carmakers struggle despite easing restrictions in February

MANILA, Philippines — Local car manufacturers reported vehicle sales took a hit in February despite the relative easing of restrictions then, but the industry remained bullish on its prospects this year.

What’s new

Vehicles sales in February declined 7% year-on-year to 24,304 units, according to a joint report by the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) and Truck Manufacturers Association (TMA) released Thursday.

On a monthly basis, it grew 17% compared to January figures, when Metro Manila and other areas were placed in strict quarantine restrictions amid the Omicron variant surge.

Local car manufacturers saw sales decline 9.2% year-to-date to 45,069 units compared to the same period in 2021.

The lower sales figure did not hamper the industry's optimism as they aim to sell 336,000 units this year, 17% higher than the sales volume last year. In 2021, local car manufacturers missed their sales target.

Why this matters 

Vehicle sales are often used as barometers 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 insisted February sales figures were still a sign of recovery for the industry since "the February 2022 sales have regained a double-digit growth amid the improved consumer confidence as the country has shifted to ‘low-risk’ for COVID-19 classification.”

As it is, restrictions are at its most lax since the pandemic, which the Duterte administration hopes will stay for the meantime to help aid in economic recovery.

“The industry is anticipating to see a continued recovery this month as the economy further reopens, downgrading to the least restrictive alert level 1 in major areas including the National Capital Region starting this month," Gutierrez said.

Other figures

• Of the total sales last month, light commercial vehicles accounted for 81.42%. Cars sold under this segment increased 25.9% month-on-month to 14,974.
• Sales of passenger cars, which owned a 24.33% market share, inched up 2.25% month-on-month at 5,914.