Car Firms Expect Flat Growth in 2009 as Crisis Hits
The Philippine car industry expects sales to slow next year as a result of a global economic downturn which threatens to cut consumer spending, especially among families dependent on relatives working abroad.
But for the moment, the Chamber of Auto Manufacturers of the Philippines, Inc. (CAMPI) remains confident that its 2008 sales target of 125,000 vehicles — “the most in more than a decade” — will still be met.“At this point in time, we are still going to be able to reach our target,” CAMPI President Elizabeth Lee told BusinessWorld yesterday.
“That’s the target for this year.”
She said the group expects to post strong sales going in to the fourth quarter, when seasonally more cars are sold.
“Actually, last quarter was one of the stronger quarters. Hopefully, the global meltdown is not going to hit us that hard,” Ms. Lee said.
Ms. Lee, who is also executive vice-president at Nissan distributor Universal Motors Corp., said growth towards the end of the year will still be driven by sales of Asian utility vehicles, pick-up trucks and vans, often used for businesses by entrepreneurial buyers.
She said the three segments combined make up around 60% of total car sales.
The local automotive industry sold more than 100,000 vehicles last year, the first time since the Asian currency crisis. CAMPI is scheduled to release its October sales report today.
Last month, CAMPI reported overall sales for the January to September period of 94,131 units, or almost a 12% increase from the same period last year.
For the month of September alone, the industry sold close to 11,000 units for a similar near 12% gain.
Ms. Lee, however, said sales could slow down next year as overseas Filipino workers (OFWs) affected by the global financial crisis send less money to their families in the Philippines.
“We’re still banking on OFW remittances … although, that may slow down a little bit,” Ms. Lee said.
“The minimum [CAMPI] is looking at for next year is flat growth,” she added.
Economist Benjamin E. Diokno said this should be expected given battered consumer confidence, adding “That’s still on the optimistic side.”
He said consumers nowadays were less inclined to invest in expensive goods like cars, due to the fear that a bearish economy may leave them unemployed in the near future.
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