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The road to recovery: Is the Philippine automotive industry bouncing back from the pandemic?

The road to recovery: Is the Philippine automotive industry bouncing back from the pandemic?

By Alden M. Monzon, Inquirer Business

In the Philippines, the automotive industry has been one of the hardest hit sectors when the coronavirus disease 2019 (COVID-19) hit worldwide more than two years ago.

According to the ASEAN Automotive Federation, motor vehicle sales and production in the country plunged by 40 percent and 29 percent respectively back in 2020, the year when lockdowns, widespread quarantines, and other harsh health curbs were implemented by the government to stop the spread of the disease.

The Philippines was the second most-affected country, in terms of motor vehicle sales, among seven other Asian economies that the federation had records of, the other six being Brunei, Indonesia, Malaysia, Myanmar, Singapore and Thailand.

Local automobile firms went from having a yearly sale of 369,941 units in 2019, to 223,793 units in 2020.

In terms of vehicle production, the Philippines was the third most-affected, same with Thailand, and next only to Indonesia and Myanmar where production went down by 46 percent and 31 percent respectively.

The Philippines went from producing 95,094 vehicle units in 2019, to just 67,297 in 2020.

Back in 2018, former Executive Secretary Salvador Medialdea said the output value of the Philippines’ automotive industry reached more than P300 billion in 2017.

He said it was equivalent to about 4 percent of the Philippines’ gross domestic product.

Auto sales post-covid lockdowns

According to statistics from an umbrella organization of car companies in the Philippines, sales of motor vehicles in the country seem to be on the path to recovery.

Figures from the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA) shows the entire local industry has sold a total of 182, 687 units this year as of July.

“As of June, we already hit fifty-six percent of our target. It’s a very good figure. While we stick with the original target of 336,000 (units), we are confident that the trend will continue,” CAMPI President Atty. Rommel Gutierrez said during a press conference at the Grand Ballroom in Okada, Manila last September 2.

Gutierrez said further that they are set to hit their sales target by December.

For more than a decade before the pandemic, motor vehicle sales in the Philippines have been growing steadily at a rate of around 20 to 30 percent.

It saw a 16 percent slump in 2018, but grew on the average of 24 percent annually in the last three years before this decline.

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Motor vehicle sales saw a slight comeback in 2019 when unit sales grew 3.5 percent to 369,941, before plunging by 40 percent during the year of the outbreak.

2021 saw unit sales rise by 20 percent to 223,793, which is good but still not pre-pandemic levels.

Vehicle production two years after outbreak

Records from the ASEAN Automotive Federation show vehicle manufacturers in the Philippines were able to output 83,846 units from January to July of 2022.

This is a 25 percent increase compared to the number of manufactured vehicles in 2021 which numbered 67,297.

It puts the Philippines ahead of Myanmar, which produced 1,956 in the same year, but is still behind Indonesia, Thailand, Malaysia, and Vietnam.

Indonesia was able to produce 1,121,967 units in 2021 while Thailand outputted 1,685,705 units.

On the other hand, Malaysia’s vehicle production was at 481,651 units, with Vietnam at 163,271.