Slump in imported car sales blamed on high interest rates

Published August 29, 2019, 12:00 AM

by manilabulletin_admin

By Bernie Cahiles-Magkilat

Sales of imported cars as of July this year still remained in the negative pulled down by significant decline in July that traders blamed to higher interest rate and stiff competition.

A report by the Association of Vehicle Importers and Distributors, Inc. (AVID) said their 14-member organization sold a total of 50,164 units sold at for the first 7 months of 2019, a slight dip from the 50,505 units sold in the same period last year.

In July, AVID said their sales decreased by 11 percent to 6,987 units compared to July 2018.

AVID blamed higher interest rates buyers face when making a decision on purchasing big ticket items.

Importers also feel the impact from stiff competition with several car models being introduced in the domestic market.

AVID’s Passenger Cars (PC) segment dipped by 5 percent year-to-date sales to 17,706 units versus same period last year.

Hyundai continued to be the top contributor in PC sales with 10,565 units followed by Suzuki with 5,085 sold since the start of the year.

The Light Commercial Vehicles (LCV) segment, which accounts for the biggest volume driven by preference for sports utility vehicles, grew by 1 percent only or 31,878 units sold in the first seven months of the year.

This segment continued to be AVID’s top volume driver led by Ford with 12,217 units followed by Hyundai with 8,645 units.

Although low volume, the Commercial Vehicles (CV) segment grew by a strong 140 percent.

Hyundai commercial vehicles led the segment with 580 units sold year-to-date versus same period last year.

CV sales are expected to remain strong in step with increased government spending and economic activity.

Despite the lingering negative growth, AVID President Fe Perez-Agudo said they are still confident that sales will pick-up in the latter part of the year with more favorable market conditions coming into play.

“The downtrend in inflation and continuous surge of OFW remittances are two factors that will improve consumer confidence, especially high-ticket acquisitions such as vehicles, in the coming months,” said Agudo.