During several months this year, the coronavirus pandemic caused automotive industry sales to fall by as much as 50% compared to the same period in 2019.
Last year, total vehicle sales reached 403,704 units. This year, the sales forecast ranges from 240,000 to 260,000 units due to the sequential lockdowns imposed by the government to curb the spread of the virus.
Next year, will sales growth recover the 50% lost this year?
Rommel Gutierrez, president of the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and concurrently 1st vice president of Toyota Motor Philippines, thinks it is possible.
“We have been cautiously optimistic about sales recovery from the low volume because of the pandemic,” Gutierrez emailed PDI Motoring when asked about the industry’s prospects for the New Year. “The gradual recovery in 2020 and actual realization of our revised forecast of 240,000 units for the year will give us better confidence to project a 20 – 50% increase in sales in 2021.”
Replying to the same query, Ma. Fe Perez-Agudo, president of the Association of Vehicle Importers and Distributors, Inc. (AVID) and concurrently president/CEO of Hyundai Asia Resources, Inc. and the newly relaunched Changan Motor Philippines, Inc., emailed: “With the conservative recovery of auto sales in recent months, we project sales to grow by roughly 30% in 2021 from this year’s low base. Economists project auto sales to take a slow or U-shaped recovery. 2020 has not been easy, but the challenges have brought out a new and better auto industry as we have discovered new ways to excite the public and offer premium value in pandemic times.”
Elaborating, she added: “We have much to look forward to in the Year of the Metal Ox that underscores all the traits we must exhibit to fast-track industry recovery. This means facing the year’s challenges with hard work, patience, strength, and intelligence.”
Noting that consumers are becoming more engaged with brands due to the continued rollout of digital technologies, value-added offers, and convenient financing done with the required physical distancing and health protocols, Agudo predicted that customer engagement will deepen further next year as industry players look for more channels to interact and transact.
“But beyond the technology,” she stressed, “success in the automotive space and beyond will greatly depend on the human connection, collaboration, and interpersonal relationships that we achieve.”
GOVERNMENT SUPPORT. The industries that have been clobbered by the pandemic, including the auto industry, look to government support to help them recover. But what kind of government support should the industry seek, aside from the non-imposition of the proposed safeguard taxes on imported vehicles.”
“The auto industry needs government support in order to have market recovery,” Gutierrez said. “With uncertainties still looming in the horizon because of the pandemic, government must assure industry stakeholders of favorable policies consistent with such recovery efforts.”
Agudo was more specific, referring to the current administration’s gradual resumption of economic activity with measures to boost various sectors, including auto.
She gave as a prime example Bayanihan 2. “For auto, it supports public transportation and jeepney modernization. Another bill in the pipeline is CREATE which lessens corporate income tax and would certainly ease the pressure on industry players. The ARISE bill allocates P650 billion for the continuation of the Build, Build, Build program, which has a multiplier effect on automotive demand. Several infrastructure projects, such as roads, ports, and airports will be inaugurated soon, and this should spur demand.”
In conclusion, the head of AVID reiterated the industry’s commitment to contribute to the New Normal “by introducing vehicles that are safe, affordable, easy to maintain, and supportive of the fleet requirements of various sectors.”
Aida Sevilla Mendoza is fascinated by everything about cars: their power, styling, design, technology, craftmanship, exciting history of motor sport through the years, and the ever-evolving industry that creates them. But above all, she enjoys driving, especially on a traffic-free expressway where she feels the connection bonding her and the car.