CAMPI to slash sales target for 2011 by half

MANILA, Philippines -  The Chamber of Automotive Manufacturers of the Philippines Inc (CAMPI) will slash its sales target for the year by half as the auto industry continues to grapple with the aftermath of the twin disasters in Japan last March.

An industry insider who spoke on condition of anonymity said the auto industry will no longer meet their four to five percent sales target for the year. Instead, the sales target will be reduced to one to two percent.

CAMPI members have already met and have all agreed to cut their targets because maintaining the four percent is “unrealistic.” CAMPI is expected to make the announcement of the lower target next month, the source said.

The country’s largest auto company Toyota Motor Philippines initially implemented a 50 percent production cut. Until now, there is no word when normal productions will resume.

The source said it is even unlikely that the new target of one to two percent growth can be met, especially if things don’t go back to normal soon. The insider said that a flat growth is a more likely scenario but the possibility of a decline also exists.

In fact sales figures have started to drop during the latest auto sales data released by CAMPI. Month on month comparison showed a 14.2 percent decline. April sales were at 11,816 units, down from the 13,775 units sold in March.

CAMPI said that understandably, the effects of the calamity are being felt as assembly plants scale down operations due to the lack of parts supply. As expected, the lack of parts supply has affected production (not limited to the Philippines).

“Although some key parts suppliers’ plants have resumed operations, they have yet to operate at normal levels. Hence, demand will continue to outpace supply temporarily as plants try to ramp up operations to higher levels at the soonest time possible,” said Elizabeth H. Lee, CAMPI president.

CAMPI said that currently, players continue to serve demand based on inventories on hand.

Previously, the local auto industry forecast a four to five percent growth for the year prior to the calamities in Japan that crippled the supply chain sending ripples across numerous countries worldwide that depend on key parts sourced from suppliers based in Japan.

“Currently, we are still within the forecast range. However, this may be revised accordingly as we move forward in the coming month with greater visibility on the extent of the damage and its lingering effect on local operations, “Lee said.

The automotive industry sold a total of 48,109 units year to date for the first four months or an average of about 12,027 units a month.