PH auto sales possible to hit 500K in 2024

The Philippine automotive vehicle sector may cross the 500,000-unit sales in 2024, a target set back in 2017.

Chamber of Automotive Manufacturer of the Philippines, Inc. (CAMPI) president Rommel Gutierrez said in a recent interview that reaching the 500,000 units sales this year is possible after combined CAMPI and Truck Manufacturers Association (TMA) sales alone grew 22-percent to 429,807 units in 2023. The number does not include sales of independent industry players.

This will be the first time for the industry to hit the 500,000-mark.

Gutierrez said new model introduction of car companies, the rosy outlook on Philippine gross domestic product (GDP), tempered inflation, easing of lending rates and growth in remittances will support industry sales this year.

He said Chinese vehicle brands have also applied for membership with CAMPI, which is expected to improve the official industry sales figures for 2024.

“With their membership, we can already capture more accurate data from Chinese brands, unlike before, we were just estimating,” he added.

To reach the 500,000 units sales this year, the industry has to grow by at least 16 percent.

The Department of Trade and Industry (DTI) initially forecasted that vehicle sales in the Philippines would reach the 500,000-mark in 2017 and the 1 million units sales by 2025.

In order for the local vehicle assemblers to take a larger share of the pie, the government rolled out the six-year Comprehensive Automotive Resurgence Strategy (CARS) Program from 2015 to 2021.

A PHP27 billion in fiscal incentives were earmarked for the program to stimulate the local production of automotive vehicles.

The government gives tax perks to participating carmakers for the sales of the locally manufactured vehicles as long as they reached the 200,000 units per enrolled model. Two out of the three slots were filled –Toyota Vios and Mitsubishi Mirage.

But due to the coronavirus disease 2019 (Covid-19) pandemic, auto sales were drastically affected, with the industry missing its targets.

Gutierrez also recalled that the Tax Reform for Acceleration and Inclusion (TRAIN) law which took effect in January 2018 slowed down the performance of the industry due to higher excise taxes on automobiles and fuel.

Official numbers from CAMPI and TMA showed that the industry was growing at 18 percent before the TRAIN law.

One year of the TRAIN implementation, the industry recorded a 15-percent decline in sales. It slightly grew by 3.5 percent in 2019 before the pandemic struck in 2020, when sales plummeted by 40 percent.

The industry started to recover in 2021, growing between 20 to 30 percent until last year. (PNA)

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