Sales of Imported vehicle in the Philippines Decline by 19%
Sales of imported motor vehicles posted a substantial 19 percent decrease in the month of August versus the same month last year due to supply constraints and seasonal demand factors.
In a statement, the Association of Vehicle Importers and Distributors (AVID) reported the group sold a total of 2,249 units in August or 19 percent lower than 1,825 units sold in August 2010.
AVID, however, was smarting it out saying they only posted a one percent decline year to date which is lower than the decrease reported by the motor vehicle assemblers in the country as represented by the Chamber of Automotive Manufacturers of the Philippines Inc.
AVID sold a total of 16,020 units in the January-August period this year or one percent lower than the 16,020 units sold in the same period last year.
“Though AVID outpaced industry’s decline of 4% in the first eight months of the year, our sales continued to be affected by supply limitations and domestic economic challenges triggered by global uncertainties. We expect our sales to track a positive trend for the remainder of the year as supply conditions normalize and external economic woes in the US and EU stabilize to reinforce the strength offered by the country’s economic fundamentals,” said AVID president Maria Fe Perez-Agudo.
Perez said that AVID still kept a 15 percent market share.
Sales performance was driven more by the passenger car (PC) sales which showed 7% growth than the light commercial vehicle (LCV) segment.
AVID maintains an optimistic sales outlook for the rest of the year with expectations of better supply situation and improved consumer outlook from increased consumer liquidity and stronger OFW remittances with the coming of the Yuletide season.
Business sentiment turned more buoyant for Q3 of 2011 according to the latest Business Expectations Survey conducted by the BSP. Responses suggest that the challenges posed by the US credit rating downgrade and by sovereign debt crisis issues in some parts of Europe could be countered by stronger domestic demand, higher fiscal spending, and continued growth in the private sector. With the expected strengthening of the peso, inflationary pressures are predicted to ease in the last quarter of 2011. These factors bode well for consumer outlook for the remainder of the year.
The Philippines continues to experience short term volatility, the most recent originating from the US and Japan credit downgrade as well as continuing debt problems in Europe. These events have contributed to the uncertainty prevailing in the world and local markets. Standard and Poor’s (S&P) has however affirmed its sovereign credit rating of the Philippines. Strong remittance inflows and its outsourcing business will continue to keep the country’s current account balance in surplus. The slower than projected growth of 3.4% in the second quarter has been attributed to low government spending as well as sluggish foreign trade. Economic officials are quick to point out that economic growth will pick up in the last two quarters of 2011 as the government spends more and Philippine businesses benefit from the recovery of Japan.
Manila Bulletin Online
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