The premium automotive segment is seeing a slowdown this year amid changing consumer behavior and stiffer competition fueled by the popularity of Chinese car brands.

Mercedes-Benz Philippines General Manager Maricar Parco said the luxury car segment posted an eight-percent decline by the end of October compared to the year before.

In terms of Mercedes-Benz, data from the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) and the Truck Manufacturers Association (TMA) showed that the company sold 466 cars over the first 10 months, down 24.8 percent from 620 units sold in the same period last year.

While high-end cars are usually insulated from shifting economic conditions that affect other vehicle types, Parco said the overall market interest for the segment has recently softened.

“Spending on luxury items is not really a priority for many,” she said in a chance interview last week.

The luxury segment, which accounts for less than one percent of the country’s total sales, comprises Mercedes-Benz, BMW, Lexus, Ferrari, Audi, Porsche, Jaguar, and Land Rover.

It covers companies whose entry-level vehicles are priced at ₱4 million or more and have already established themselves as a luxury brand.

These premium car brands have been part of the national conversation over recent weeks, not because of their quality or design, but because of purchases made by contractors and engineers linked to the flood control scandal.

A number of these premium vehicles have since been put up for auction by the government.

It was earlier reported that luxury spending, in general, is on the decline, with many well-off Filipinos holding off on purchases that could show off their wealth as public outrage against corruption continues to grow.

Parco said this could be a factor in the decline, although minimal, as she cited the popularity of Chinese brands as a major disruptor to the local industry.

“The competitive landscape is much, much wider now. So consumers also take a little bit of time to choose,” she said.

Parco noted that Chinese brands, which are typically more affordable, are slowly capturing demand that would have otherwise gone to the luxury segment.

“They're affordable but still have the bells and whistles that the consumers are used to from higher-end brands,” she said.

This, she said, has also been happening in other markets such as Thailand and Indonesia.

Mercedes-Benz, however, sees this as an opportunity to make adjustments to strengthen its competitiveness despite a tight market.

“Hopefully, [in] the last two months we’ll be able to finish strong,” Parco said.

Last week, CAMPI President Rommel Gutierrez remained optimistic that the automotive industry would meet its target of 500,000 sales this year.

CAMPI-TMA data showed that car sales declined by 0.3 percent to 383,424 units between January to October from last year’s 384,310 units.