Auto demand softens, EV mix improves

From AB Capital's The Opening Bell: Three Moves

Event

Philippine auto sales declined 8.5% YoY in Feb to 35,842 units, with passenger cars down 13.6% and commercial vehicles down 7.1%. We think weaker household budgets and higher fuel costs are already weighing on demand for big-ticket purchases.

View

In our view, demand remains sensitive to fuel and financing conditions. If oil sustains above US$100, we think auto sales could decline high single digits in 2026. EVs, however, are gaining share, with February volumes up 70.6% YoY and now accounting for about 8-9% of sales.

Catalyst

Near-term trajectory hinges on oil prices and consumer confidence. If fuel stabilizes near current levels, volumes may recover modestly on improved supply. However, a sustained oil spike could further delay purchases, while accelerating substitution toward hybrids and lower-cost mobility alternatives.

Action

We think positioning should remain cautious on auto-related names and consumer durables (i.e. GTCAP). Favor companies exposed to EV supply chains or financing (i.e. AC). Watch for margin pressure among dealers and OEMs, particularly if discounting rises to support volumes amid softer demand conditions.

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.