Philippines vehicle sales among hardest hit by COVID in Southeast Asia

MANILA, Philippines — The Philippines is among the countries in Southeast Asia to be affected the most by the coronavirus disease 2019 or COVID-19 in terms of vehicle sales, a unit of Fitch Group said.

 “Countries hardest hit by the spread of the coronavirus pandemic, such as Thailand, the Philippines and Malaysia, will face more severe vehicle sales declines as stricter movement restrictions are enforced to stem the spread of the virus,” Fitch Solutions Country Risk and Industry Research said  in a report titled “South East Asian Autos Sales Under Significant Pressure Amid COVID-19 Spread.”

The Fitch unit said a sudden surge in confirmed COVID-19 cases in Southeast Asia would affect the region’s automotive industry in the coming months.

As governments in the region are implementing strict restrictions on the movement of people to prevent the spread of COVID-19, business activity and non-essential services are on a standstill.

Last Wednesday, Thailand started implementing movement restrictions which included shutting down non-essential services and business activity.

The Philippines and Malaysia have imposed similar measures earlier.

“We believe these shutdowns will severely impact the region’s automotive industry as dealerships shut down to adhere to newly imposed measures to stem the flow of the virus,” the Fitch unit said.

It said potential supply chain disruptions from Thailand and Japan which are key component suppliers to vehicle assembly operations in the region, could cause production stoppages.

In addition, the shutdowns on economic activity will have a negative impact on consumer and business sentiment.

As Vietnam, Myanmar and Brunei have reported a small number of coronavirus cases relative to its Southeast Asian neighbors, the Fitch unit is of the view they would not be as badly hit as the other countries.

“We therefore believe these countries will fare better in the short term as movement restrictions have not been put in place, however the risk of an increase in infections remains,” the Fitch unit said.