Back in late December 2019, when the first cases of a mysterious disease caused by a novel coronavirus sprouted in the vicinity of a Chinese wet market in Wuhan, China, people around the world had no idea this would be the beginnings of a pandemic that would eventually alter every human activity around the world. In less than 3 months, the disease that would be heretofore infamously called Covid-19, would directly impact all aspects of life in the Philippines and in the rest of the world.
The local automotive industry, which by the end of 2019 was looking forward to even more glorious days in 2020 in the midst of a resurgent golden age of motorization, didn’t see the looming storm of Covid-19 over the horizon. And when it was apparent by mid-March that society would be “shut down” to control the spread of a deadly contagion, virtually every sector of the transport industry was scrambling to find a way to manage a once-in-a-century disaster.
The first three months of the strict enhanced community quarantine enforced over NCR and much of Luzon and other Covid hotspots in the country proved a disaster both for automotive businesses, consumers, motorists, and commuters. As auto dealers’ operations screeched to a halt, buyers canceled purchases. Inventories stopped moving en masse, and the transport sector suffered operational and economic paralysis.
The result: A 67.5-percent drop in first quarter sales, or just 11,029 units sold by the end of March, compared to 32,173 in the same period in 2019, according to the Chamber of Automotive Manufacturers of the Philippines (Campi) and the Truck Manufacturers Association.
This was mirrored by the Association of Vehicle Importers and Distributors (Avid) which reported a 34.4-percent decline in the same period.
By mid-April, forces within the industry were desperate to stop the bleeding. The 200-dealer-strong Philippine Automotive Dealers Association (Pada) issued a letter of appeal to the Department of Trade and Industry to allow them “to open on or before April 20 on a limited engagement”. By then, auto dealerships were each losing between P3 million and P10 million a month since businesses were shut down in March.
But there was little anyone could do by then. By mid-June, direr numbers came up. The joint Campi and TMA sales update for May showed a bleak 4,788 units sold, an 84.6-percent drop from the 30,998 units sold in the same month in 2019. The only silver lining here was that the figure was a marked improvement from April 2020 sales, when a measly 133 units from the entire Campi and TMA groups were sold. Dealerships, albeit with reduced capacities, were finally allowed to operate, contributing greatly to improved sales.
51.2% drop in first half of 2020
Despite this bit of good news, the first half report remained disheartening. From January to June 2020, Campi and TMA sold just 85,041 units, a 51.2-percent drop from the 174,135 units sold in the same period a year ago.
However, economic life was starting to regain some foothold. The same report showed 15,578 units sold in June, significantly higher than the 4,788 unit sales in May.
Avid sales likewise stumbled in the first 9 months of 2020 compared to 2019 figures. While the association sold only 34,977 units from January to September 2020—a 45.6-percent drop from the same period in 2019, there was, however, a 212-percent increase in sales in the third quarter to 15,471 units from just 4,955 units in the second quarter.
For the remaining months of 2020, it has been a story of slow yet steady recovery. Eventually, automotive businesses adapted to a “new normal” of doing business by adopting innovative measures, mainly through contactless engagement via virtual or online marketing and sales schemes and displays. Car companies also ramped up their promotional activities in order to jumpstart the market into buying again, all while continuing to introduce new models into their product rosters.
Although 2020 sales overall won’t come close to the record 2019 sales of 403,704 units, Campi, TMA, and Avid are on track to ending 2020 on a hopeful note, buoyed by positive numbers in the final quarter. The joint report of Campi and TMA showed that October sales grew 2 percent to 25,023 units, from 24,523 units in September, while Avid posted a 9-percent increase in sales in October, or 6,120 units sold versus the 5,594 units sold the previous month. Campi president Rommel Gutierrez said that the month-on-month growth happened despite the overall negative consumer and business confidence outlook for the fourth quarter. “We are on track to achieve our revised sales forecast of 240,000 units—the baseline for our medium-term recovery plan,” he said.
The long-dreamt-of 500,000 sales mark, which the industry had hoped to have achieved in 2020 if not for the pandemic, may still remain an elusive dream come 2021, as auto industry leaders have conservatively forecast just up to 50-percent sales growth for 2021. Even then, such a number would have to depend on how our society, in general, manages to escape from the clutches of the virus. Industry analysts are one in saying that the Philippines must find a way to extricate itself from the list of Covid-19 hotspots in Southeast Asia, and that the government should focus on such a concerted effort, while the private and business sectors—including the auto industry—should work on building consumer confidence.
Even when the silver bullet of the vaccine (however or wherever it may come from) is finally administered to every Filipino, recovering completely from the “auto-calypse of 2020” still wouldn’t be over. There is no vaccine for lost time and lost opportunities.