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Vehicle sales up 20% in 2021, but ‘soft’ growth worries analyst

Vehicle sales up 20% in 2021, but ‘soft’ growth worries analyst

By Roy Stephen C. Canivel, Inquirer Business

Car and truck manufacturers sold 20 percent more units last year from 2020, a recovery after the pandemic upset demand for new vehicles.

Still it was not fast enough to match their 2019 performance, data showed.  The firms sold a total of 268,488 units in 2021, according to a joint report by the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA) on Wednesday. This was 20 percent higher than the 223,793 units sold in 2020. 

Campi and TMA, which together account for a bulk of the total sales in the auto industry, saw a 39.5 percent drop in sales in 2020 as the pandemic weakened the demand for new vehicles.

While the 2021 figure recovered some of that lost momentum, it still was not enough to match its 2019 sales that sold 369,941 units. 

“Looking back at last year’s performance, the automotive industry has remained remarkably resilient with an overall growth of 20 percent compared with the same performance a year ago – that is no small feat indeed,” said Campi President Rommel Gutierrez, who is also a top official of market leader Toyota Motors Philippines. 

“The industry remains optimistic for a continued recovery this year from the COVID-19 pandemic downturn as progress on inoculation has provided hopes for a better outlook for the wider economy, but ‘business as usual’ is still unlikely as challenges remain at hand,” he added.

Sales growth for the month of December alone was flat at 0.9 percent year-on-year with 27,846 units sold. Campi and TMA sold 27,596 units in December 2020. 

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Vehicle sales is one way to measure the consumers’ ability to invest in durable goods, according to Nicholas Mapa, senior economist at the ING Bank NV.  The latest sales, however, suggest that people are not willing to buy cars like they used to. 

“The 22,000 sales average in 2021 suggest that demand for durables remains soft and that much anticipated revenge spending can only carry the economic recovery to so far.  Prior to the pandemic, average car sales was topping 30,000,” he said in a research note. 

“With the Omicron variant looking to disrupt business activity to start the year, we can only surmise that consumers will have a little less in their budgets to set aside for a new car in the near term,” Mapa added. 

Toyota cornered nearly half of CAMPI and TMA total sales for 2021, accounting for more than 48 percent or 129,667 units. It was followed by Mitsubishi Motors Philippines, with a market share of 13.98 percent. Ford Motor Company Philippines, Inc. placed third with 7.45 percent.