The domestic automotive industry is projected to recover in the fourth quarter of 2021 and pick up momentum well into 2022, according to investments and banking executives.
House of Investments (HI) Senior Vice-President and Car Business Operations head Johnny Fetalvero said several factors will work in favor of improved auto sales. These include the speed of the Coronavirus 2019 (Covid19) vaccination roll-out, reinvigorated cash remittances, steady lifting of restrictions, and election spending.
In turn, increased economic activities and consumer spending would sustain the momentum the following year.
Fetalvero explained that the auto purchases may have shifted to low gear with the record levels of active virus cases in March this year, and the subsequent reimposition of the expanded community quarantine (ECQ).
“But the Filipino spending and revelry culture in the Christmas season is expected to shift auto sales to fourth gear,” he enthusiast.
Inquiries with car dealers last year only slipped by 20 percent. But inquiries through their social media platforms shot up, proof that the appetite for auto purchases remained warm.
Filipinos also feel safer using their own a car rather than commute to get where they need to be during the pandemic.
Ramil M. De Villa, head of the Consumer Lending Group of the Rizal Commercial Banking Corporation (RCBC) effective May 15, pointed out that there was an increase in the purchase of refinanced cars during the first few months after the lockdown back in 2020, while the purchase of new cars gained momentum in the fourth quarter of the same year.
De Villa echoed Fetalvero’s insights regarding the recovery of auto sales late this year. In fact, RCBC put in place its upgraded version of the Covid19 Assistance Recovery Enhancement Program (CARE) with a six-month moratorium for those who have car loans.
This resulted in a little over 20 percent of the bank’s clients with auto loans availing of payment holidays last year, with majority of customers opting to continue their regular payment modes.
“I’m confident the normal uptick in Q4 will again be observed,” De Villa said.
RCBC and the House of Investments (HI) are part of the Yuchengco Group of Companies.