Car sales hit new record high
MANILA, Philippines - Car sales last year topped the record high seen in 1996 after surging by more than a fifth over 2009 levels, industry data released on Saturday showed.
But sales growth is expected to ease this year and will need a boost from government via its long-promised upgrade of the sector’s development policy, an industry group said.
The Board of Investments, for its part, said work to tweak the import ban on used vehicles and ease requirements to qualify for export incentives -- moves which promise to widen the market for car firms -- is in its final stages.
The developments come after a year that saw demand driven by election spending and the market’s need to replace vehicles damaged in the late 2009 storms.
Twenty automotive firms sold 168,490 units in 2010, up 27.2% from the previous year and surpassing the 1996 record by roughly 4%, the data showed.
The feat was accomplished even after the industry added in December just 13,749 units to the running tally, a figure barely 2% more than November sales.
Commercial vehicles like Asian utility vehicles, vans and trucks accounted for 109,799 units or nearly two-thirds of the total, topping the 2009 figure by 27.4%.
Passenger car sales grew at a similar pace to 58,681 units over the year-ago total.
Top seller Toyota Motors Philippines Corp. tracked the industry sales growth average, selling 56,855 units or 23.1% more cars in 2010 than in 2009. But it lost roughly a percentage point of its market share, now down to 33.7%.
Mitsubishi Motors Philippines Corp. and Hyundai Asia Resources, Inc. followed with the second and third largest market shares, respectively.
Mitsubishi grew sales by 39.5% to 32,422 units and increased its market share by less than two points to 19.2%.
Hyundai, meanwhile, sold roughly two-thirds more than its 2009 tally. The car firm’s 18,696-unit total accounted for 11.1% of the market, up nearly three points from its share in 2009.
Sales growth, however, is expected to ease this year to just 4%-5%, the Chamber of Automotive Manufacturers of the Philippines, Inc. reiterated in a statement.
"To move forward, faster, and stronger, we must showcase this administration’s political will to stamp out corruption in any form. This sends a very strong and positive signal to those who are already looking to expand their auto investments in the country," the group said.
"We are likewise hopeful that this year will bring in new investments on the back of government’s direction to support the expansion of local assembly operations, create jobs, and create a competitive environment where the Philippines can participate on a larger scale, regionally," it said.
"A strong, clear, and competitive road map is key," it added, referring to the long-delayed upgrade of the Motor Vehicle Development Program due to unfinished work on its implementing rules.
So far, the BoI has finalized portions of the road map that deal with the import ban on secondhand vehicles and parts, said the state agency’s managing head, Cristino L. Panlilio. The draft proposes to gradually ban the import of used engines -- which are reassembled into vehicles that compete with locally made models -- if they are more than five years old, Mr. Panlilio told reporters on Friday.
It further requires used part importers to get permission from the Trade department and also retains earlier policies which ban imports that compete with locally made models and those with right-hand steering, he said.
Meanwhile, a draft executive order easing requirements for car exporters to qualify for tax perks will be submitted to the Trade secretary today for endorsement to Malacañang, Mr. Panlilio said.
Car firms can qualify for tax perks if they export 5,000 completely built-up units a year or export a volume worth at least $15 million, he said. They will then be able to earn export credits for five years for each unit sold, with the amount decreasing per year. These credits can be used to pay off import tariffs which are set at rates lower than that slapped on non-exporters.