Easing lockdowns bring imported car sales back to growth in May

MANILA, Philippines — Public appetite for imported cars returned in May, a hopeful sign that consumer spending is on the mend as lockdowns relax.

What’s new

A total of 4,864 imported cars were sold this month, up by 8% on a month-on-month basis, the Association of Vehicle Importers and Distributors Inc. (AVID), an industry group, said on Thursday.

Year-on-year, sales leapt by 293% last month, which only appeared large mostly due to low-base effects that mask the industry’s painful way forward. From January to May this year, 25,217 imported cars were sold, up 59% on an annual basis.

Why this matters

Vehicle sales are usually used as a measure for economic strength since buying big-ticket items like cars has big contribution to consumer spending, a traditional growth driver for the Philippines.

What the industry says

That sales finally posted growth last month convinced car importers that demand could be showing some signs of recovery. “This massive sales hike can be attributed to the gradual re-opening of the economy and less restrictive quarantine measures,” AVID said.

Other figures

• By type of vehicles, passenger cars sold hit 1,029 in May, down 5% from the previous month.
• Car importers sold 21 commercial vehicles, down 93% month-on-month.
• Sales of light commercial vehicles managed to cushion the slump, growing 22% month-on-month to 3,814 units.