The government must give the public specific measures on how the country will deal with the looming economic slowdown as a result of the crisis that has sent a number of rich nations into recession, the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) said over the weekend.
“The government still has not made any substantial statement,” Melchor R. Dizon, CAMPI vice president said.
According to Dizon, it is time for the government to assure the public that it is working in order to cushion the country against the global financial crisis especially since experts have predicted a slower 2009 for the Philippines.
Dizon said businesses are very concerned that is why the government must take a position on the country’s economic fundamentals and implement sound policies.
“It is now a confidence problem,” Dizon said.
Dizon said the government can work on keeping business confidence especially since the country has been somewhat insulated given the healthy banking industry.
In spite of this, CAMPI has predicted growth of two to four percent for the auto industry.
Likewise, they said vehicle prices will remain stable. CAMPI president Elizabeth H. Lee said that prices of vehicles will be steady barring any spikes in the exchange rate.
“As long as the peso does not go over 50 (to a dollar),” Lee said. According to her, the ideal rate is 44 to a dollar.
Lee said they are not expecting any significant price increases next year given the dropping prices in the oil prices, logistics expense and steel prices.
However, she said lower price of inputs does not necessarily translate to lower auto prices because the relatively weak peso against the dollar offsets the gains. “The currency negates the gains,” she explained.
However, Lee stressed that there is no need to panic because the industry is healthy in spite of the contraction of car sales in the US.
Lee said the US market is saturated already with a ratio of 800 cars for every 1,000 people. Here, she said the ratio is 22 cars for every 1,000 individuals. “There is a large growth potential.”
Lee said people who already have cars may think of holding off buying additional vehicles but those who do not have one will still buy. “First time car buyers will still buy a car.”