By Bernie Cahiles-Magkilat
Sales of imported vehicles dropped by a considerable 18 percent in the first nine months of the year restrained by higher interest rate and rising commodity prices.
Data from the Association of Vehicle Importers and Distributors Inc. (AVID), a group of purely 12 car traders, showed there were able to sell 65,917 units in the first nine months this year or 13 percent lower than the 75,949 units in the same period in 2017. In the third quarter alone, sales slipped further by 18 percent to 22,774 units against 27,605 units sold in the third quarter of 2017.
Ma. Fe Perez-Agudo, AVID President, attributed the sharp decline to the rising commodity prices, higher interest rate and increasing fuel prices.
Based on its data, demand for passenger cars (PC) continued to dip in favor of SUVs with 23,531 units sold in the first nine months of the year, down by 20 percent. With 7,350 units sold, the PC segment dropped by 30 percent in Q3 2018. In terms of volume, Hyundai continues to spearhead the segment as it managed to sell 15,359 units from January to September this year.
Accounting for 63 percent of the total AVID sales, the light commercial vehicles (LCV) segment reported a 10 percent year-to-date drop, bringing the year-to-date sales tally to 41,808 units versus previous year’s 46,683 units. A total of 15,279 units were sold during Q3 2018, 11 percent lower than the 17,108 units sold in Q3 2017. Ford recorded 17,600 units sold for the first nine months of the year, making it the top selling brand in this segment.
Represented by JAC Automobile Int’l Philippines Inc., AVID’s commercial vehicle (CV) segment sold 578 units from January to September 2018.
Amidst the headwinds, Agudo said, “AVID retained its rosy outlook that its wave of new product launches and customer-focused service offerings will augur well for the automotive industry.”
Agudo cited that the government remained optimistic on the strength and stability of the country’s macro-economic fundamentals despite the slashed growth forecasts by international agencies.
The Asian Development Bank (ADB) downgraded its growth forecast to 6.4 percent from 6.8 percent for 2018 while the International Monetary Fund (IMF) and World Bank expect Philippine GDP to grow 6.5 percent this year, a downward revision from the 6.7 percent estimate. The lower growth forecasts are attributed to the weak agriculture sector, oil prices, continued global monetary tightening and high inflation.
While the government is looking at various countermeasures to high inflation, inflation in September stay elevated at 6.7 percent after typhoon Ompong caused P26.7 billion damage. The faster rate of increase in the commodity prices prompted the Central Bank to hike interest by a total of 150 basis points. This, coupled with food and other basic needs as the consumers’ priority and high inflation, are reasons for the household’s less favorable outlook on their buying conditions across all big ticket items.
Nevertheless, AVID will continue to offer innovative products and services with the customers