Just like carmakers, importers reverse to sales loss in March

MANILA, Philippines — A still anemic consumer sentiment continued to weigh on sales of imported cars in March, a glaring sign that an expected economic pick-up last quarter likely did not materialize with the return of lockdowns in Metro Manila.

What's new

A total of 5,193 imported cars were sold in March, down 4% on a month-on-month basis, the Association of Vehicle Importers and Distributors Inc. (AVID), an industry group, reported on Tuesday. That reversed a fragile monthly rebound of 3% in February.

Compared to year-ago level, sales jumped 95% but mainly due to a low-base effect. This essentially means that because of last year’s slump when lockdowns were first enforced, even a small uptick would translate to stronger year-on-year reading that hardly reflects a convincing rebound.

For the entire first quarter, sales rose 9% year-on-year to 15,857 units.

Why this matters

Vehicle sales are often used as barometer of economic health. Durable goods like vehicles when purchased contribute highly to consumption, which represent 70% of annual gross domestic product. 

Although movement restrictions have eased since June last year, a full turnaround is yet to happen for the auto industry. Elevated joblessness that trimmed people's incomes have hurt demand, while higher tariffs on imported cars imposed beginning last January added to the burden.

Even car manufacturers, which now import most of their vehicles to save on costs, are struggling to recover, with their March sales reported last week sliding 27.1% on-year. On average, around 70% of cars sold in the Philippines are already imported from countries like Thailand and Japan.

By the figures

• Passenger cars sold in March reached 1,372, down 10% from the preceding month but up 34% year-on-year. In the first 3 months, this kind of cars sold 4,241 units, a 7% decline from a year ago.
   
• Sales of light commercial vehicles inched down 1% month-on-month to 3,676 units, which were more than double last year, still because of low base distortions. This segment closed the first quarter with 11,198 units sold, growing 13% annually.
   
• Commercial vehicles sold in March inched down 6% from February to 145 units but was way above the 6 units sold in March last year when lockdowns were just getting enforced, figures showed. For the entire quarter, 418 imported commercial vehicles were sold, up 9% on-year.

What the industry says

In a statement, AVID President Ma. Fe Perez-Agudo said: “The slow uptick of PC (passenger cars) is a result of continued low consumer confidence. But let us not discount the commendable performances of LCV and CV, and the hardworking teams that drive them. We see these two segments as our industry’s lifesavers as they lend indispensable support to the country’s revitalized infrastructure development programs.”