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Automotive industry revs up

Powered by the previous year’s record-breaking sales, the automotive sector looks forward to a better performance in 2014, as it prepares for the transformation of the Association of Southeast Asian Nations into a single market next year.

Fresh from posting all-time high sales of 210,000 units in 2013, the automotive industry is optimistic about topping the feat by another 10 percent to 230,000 units in 2014.

The continued improvement in the economy, increased consumer confidence as well as the introduction of more attractive new vehicle models and promotion packages will drive the projected growth in 2014, according to industry associations.

Notwithstanding the lack of a working road map, the government is convinced the local automotive industry will continue to achieve multiple growths on its way to an exporting status over the next 10 years.

The local automotive industry, however, looks forward to the release of the automotive road map by the first quarter of 2014. All forecast and plans will take their cue from the industry road map.

The road map should have been released in December 2013, if not for additional inputs needed by the National Economic and Development Authority to compare the magnitude of incentives given by other countries to their own automotive industries.

Local assembly involved about 75,000 units in 2012, up from about 65,000 units in 2011.  This pales in comparison with regional leader Thailand’s 1.56 million units, Indonesia’s 838,000 units and Malaysia’s 534,000 units.  Even Vietnam, which is new in the vehicle manufacturing business, surpassed the Philippines’ feat with 100,000 units.

The auto industry, with an annual output value of P368 billion, contributes about 12 percent to the industrial sector and 3.8 percent to the gross domestic product.

It supports some 70,000 employees, including 30,000 in vehicle assembly in downstream and upstream industries and 40,000 in parts manufacturing.


Small cars and sports utility vehicles are expected to increase their shares in vehicle sales, although both assemblers and importers agree that no single car model will dominate the industry in 2014.

Designs will be less generic, trending towards edgy, bolder and more emotional blueprint yet striking and beautiful, they said.

Innovations in 2014 are expected to include not just new models or new designs but can also involve more exciting promotion packages and novel financing schemes.

Growth prospects for the economy and automotive industry in 2014 remain positive on the back of strong macro-fundamentals, accelerated post-Yolanda construction spending, sustained remittance flow and revenues from the services sector.

However, both vehicle makers and importers expressed concern over the peso depreciation and volatile commodity prices that may pressure the banking system to hike interest rates in 2014.


The Chamber of Automotive Manufacturers of the Philippines Inc. and the Truck Manufacturers Association, two of the country’s biggest groups of vehicle assemblers, reported combined sales of 181,283 units in 2013, or 16 percent higher than 156,649 units sold by their members in 2012.

Adding the sales from the other non-members, this marked the first time total sales topped 200,000 units in a single year.  This also surpassed the industry’s initial sales target of 200,000 units for 2013.

By product line, the passenger car segment exhibited the highest growth rate of 26 percent with sales of 61,083 units compared to the total sales of 48,488 units in 2012.   The growth in the passenger car sales was largely fueled by successful introduction of several new models and the entry of new players in the market.

The commercial vehicle segment also performed well with a sizeable increase of 11 percent to 120,200 units in 2013 compared to 108,161 units sold in 2012.

Within the commercial vehicle category, light commercial vehicles showed a significant volume increase of 16 percent, with sales of 74,398 units for 2013 compared to the 64,101 units in 2012.

However, the luxury car segment suffered lower sales in the last two months of 2013.  One reason cited by the industry was the effect of the twin natural disasters that hit the country in 2013.

The earthquake in Bohol and the storm surge that hit Samar and Leyte caused by typhoon Yolanda elicited lackluster interest from high-roller clients, partly as an expression of sympathy to the victims, and partly as conservation efforts to focus more on the rehabilitation program.

Bullish for 2014

Having met and exceeded the 2013 sales target, the industry is even more bullish for 2014 as it plans to hold the 5th Philippine International Motor Show on Sept. 18 to 21, 2014.

 “As the biggest and most awaited motor show in the country, PIMS has been widely recognized as the best venue for introducing new products and this year’s PIMS should be another exciting project to look forward to,” said Campi president Rommel Gutierrez.

Among vehicle manufacturers in the country, Toyota Motor Philippines Corp. retained its top slot as the best performing automotive corporation, ending 2013 with a 41-percent market share.  

Mitsubishi Motors Philippines Inc. placed second with almost 24-percent share while Honda Motors Philippines ranked third with 7.37-percent share.

Ford Motor Company Philippines finished fourth with 7.33-percent share. Isuzu completed the top five with 6.5 percent.

Meanwhile, sales by another industry group, Association of Vehicle Importers and Distributors Inc., rose 10.6 percent to 39,399 units in 2013 from 28,400 units in 2012, on the back of better economy and good business climate.

Avid said the growth prospects in 2014 remained positive for the automotive sector as the economy continued to grow.

“As the economy’s growth continues to be on a positive track, Avid remains bullish about the prospects for the industry this year with our commitment to provide innovative product and service offerings that respond to the needs and preferences of the Filipino consumers,” said Avid president Ma. Fe Perez-Agudo.

Avid’s sales of light commercial vehicles rose 25.9 percent to 15,256 units in 2013 from 12,116 units in 2012.

The segment’s strong showing was headed by Subaru’s Forester and Chevrolet’s Trailblazer due to their appealing product features, competitive price points and better financing packages.

The growth posted by the light commercial segment compensated for the slow growth in passenger car sales which declined by 0.9 percent to 16,143 from 16,284 units.

Avid said despite the post-Yolanda supply shocks and pressures coming from US stimulus-tapering program, the industry ended 2013 with new record sales.

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