VEHICLE sales in the Philippines fell by 16 per cent last year, the worst full-year decline since the financial crisis in 1998. Members of two large automotive groups in the country sold 357,410 units last year, much less than the 425,673 units sold in 2017.
The Christmas spirit was also not enough to boost auto sales as December marked the groups’ steepest year-on-year drop in terms of volume sales.
This was shown in a joint report by the Chamber of Automotive Manufacturers of the Philippines Inc (Campi) and the Truck Manufacturers Association |(TMA).
Campi president Rommel Gutierrez previously attributed the industry’s months-long decline to a number of factors, including the Tax Reform for Acceleration and Inclusion (TRAIN) Act, which made most cars more expensive due to higher excise rates.
Inflation has also affected the industry as consumers put buying new vehicles in the backseat in order to prioritize basic goods and services, according to Gutierrez, also a top official of Toyota Motors Philippines Corp.
For the month of December alone, sales reached only 31,945 units, down from the 45,494 units sold in the same month a year ago.
Industry officials earlier said that many consumers bought new vehicles in 2017 ahead of the scheduled 2018 increase in excise under the TRAIN law, the Duterte administration’s first tax reform package.
Campi and TMA are hoping the industry will grow 10 percent this year, which seems likely given the low base figure for 2018.
The full year 2018 figure was slightly worse than expected. Gutierrez said in a previous interview that they expected full-year sales to drop by as much as 15 percent.
Such sales performance marked the lowest in two decades. Back in 1998, vehicle sales slumped 43.76 percent to 81,231 units from 144,435 units in 1997, according to data collated by the Japan External Trade Organization.
It took the industry around 14 years for it to recover its lost momentum.