Autos eye recovery as pent-up demand meets easing rates
From AB Capital's The Opening Bell: Three Moves
Event
Philippine auto sales reached 491,395 units in 2025, up 3.7% but below the 500,000 target, as high financing costs, excise tax changes, and weather disruptions softened demand. Passenger cars fell 23%, while commercial vehicles rose 7%, highlighting uneven consumer recovery and evolving mobility preferences.
View
We think the sector’s resilience reflects demand deferral rather than deterioration with 2026 positioned for a rebound as rates ease and real incomes stabilize. EVs remain the standout segment i.e. industry data show EV and hybrid sales surged 142% and reached ~12% share, signaling structural outperformance.
Catalyst
Key drivers for 2026 include BSP’s easing cycle improving loan affordability, stronger infra-linked commercial vehicle demand, and sustained EV adoption as competition lowers prices. In our view, hitting 500,000 units in 2026 is achievable if financing conditions improve and inflation risks stay contained.
Action
We expect EV penetration to rise further, benefiting brands with competitive EV lineups (i.e. Ayala Corp’s BYD and GTCAP’s Toyota) and supply-chain flexibility. Risks include FX volatility, delayed rate cuts, and softer household demand.
Disclaimer: The information, analyses, and views contained herein is based on sources which we, AB Capital Securities, believe are reliable, but is not guaranteed by us and is not to be considered all inclusive. It is not to be construed as an offer or solicitation of an offer to sell or buy the securities herein mentioned. AB Capital Securities and its Directors and Officers and/or members of their families may have a position in the securities herein mentioned and may make purchases and/or sales of the securities from time to time in the open-market and otherwise.
- Latest
