Auto outlook improves as fuel prices ease

From AB Capital's The Opening Bell: Three Moves

Event

Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) now expects 2026 vehicle sales to decline 5-8%, better than its earlier 8-10% contraction view. Early May sales reached around 33,600 units, up 3.7% MoM, helped by fuel price rollbacks.

View

In our view, the revision suggests demand is stabilizing after the April slump, but recovery remains fragile. Fuel prices are the main swing factor, while financing costs and weaker household purchasing power still limit appetite for big-ticket purchases.

Catalyst

Key sensitivities include pump prices, product mix, and vehicle supply. If fuel continues moving toward pre-war levels, we think industry volumes could settle near the better end of CAMPI's 5-8% decline range.

Action

We think the read-through is mildly positive for GTCAP's Toyota, which benefits from scale and product depth. However, EV supply constraints and margin pressure remain key risks, especially as electrified vehicle demand rises faster than available inventory.

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.