Despite the continued rise in fuel prices, the Bank of the Philippine Islands (BPI) said auto loan applications and releases in the country made record-breaking sales last year.

The bank expects to end the year with double-digit growth in their auto loans, said David G. Sarmiento, BPI Family Savings Bank senior vice president for auto and motorcycle loans and credit services.

“We have already grown 15.4 percent from January to February in new auto loan releases, which is very high compared to the industry rate of only 6.7 percent compared to the same period last year,” Sarmiento said.

Sarmiento said 2010 was a record-breaking year for the auto industry as it saw the sale of 168,000 auto units, a 27 percent increase from the industry’s biggest figures of 160,000 in 1996.

Sarmiento said people were buying mostly sport utility vehilces (SUV) and Asian sport utility vehicles (AUV).

But he said there could be a market for small and more fuel-efficient car models.

Michael C. Mendoza, BPI senior manager for product marketing, said the number one selling car in the past were compact cars like Toyota Vios and Honda City, followed by the Mitsubishi Montero, an SUV that runs a diesel-powered engine.

“I think people right now tend to go for smaller cars but at the same time think of cars that are best driven in areas prone to flooding , which is the reason SUVs like Montero are still very much preferred,” he said.

The BPI Family Auto Madness promotion in Cebu will be held at the Ayala Center Cebu starting today until Sunday, April 3.

“We started this 13 years ago here in Cebu and now this is the 4th nationwide event after we also introduced it in other areas like Manila after we experienced success in Cebu 13 years ago,” said Sarmiento.

Marvin P. Sevilla, BPI Cebu Business Center head, said they approved and released 100 to 120 car units during their Cebu event last year.

He told Cebu Daily News he is optimistic they can surpass this number.

There are 15 participating dealers—including BMW; Cebu Autocentrale Corp. that deals Subaru, JMC and Suzuki; Cebu Southbay Automobiles Inc. for Mazda; Dearborn Motors Co. Cebu Inc. for Ford; Fast Autoworld Philippines Inc. for Mitsubishi; and Gateway Motors Cebu Inc. for Kia.

Also joining are Global Motors Cebu Distributors Corp. for Chevrolet, Honda Cars Cebu Inc., Hyundai Cebu Inc., Isuzo Cebu Inc. Nissan Cebu Distributors Inc., Pasajero Motors Corp. for Volvo and Toyota Cebu City Inc.

Sarmiento said free GPS units will be given for every approved loan.

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The global financial meltdown is expected to affect significantly the sales of entry-level vehicles, bulk of which are financed by bank loans.

“The impact of the crisis is on the entry-level vehicles because banks are already starting to implement more stringent rules in car financing,” Froilan Dytianquin, assistant vice president for marketing of Mitsubishi Motors Philippines Corp., told reporters.

Entry-level cars are those with price tags of P600,000 or less apiece.The Mitsubishi official said local banks had become stricter in financing car purchases as the US financial woes stemmed from abuses in the sector, including the granting of loans to individuals who are not credit-worthy.

“Banks have more strenuous rules now. They look at your monthly billings of utilities and check if you pay regularly. They do more background investigation on your credit cards. Banks started implementing stricter measures starting the third quarter of this year when the US financial crisis broke out,” said Dytianquin.

He said about 70 percent of car purchases were financed through bank loans, a big percentage of which were entry-level cars. Buyers of entry-level cars are mostly those who do not have the financial capability to pay in cash.

“While banks do not actually deny loans, there are delays in the processing and buyers get discouraged and so car purchases get postponed,” said Dytianquin.

Mitsubishi has just regained its position as the second best-selling vehicle brand in the Philippines after losing out to Honda Cars Philippines Inc. in the past two years.

It ended the year with a 14-percent market share from 12.6 percent last year. Mitsubishi drew up a sales target of 18,000 units for the whole of 2008. The Japanese car assembler is looking at a flat growth next year, or 18,500 units.

“We cannot really project sales next year if it’s going to be a decline or growth because of the crisis. It would all depend on bank financing,” said Dytianquin.

Mitsubishi, however, remains upbeat with four launchings, including model upgrades on a sedan and a sports utility vehicle planned for next year. Two of the launching are scheduled within the first quarter of 2009.

Its best-selling model remains the Adventure, which is very popular among families of migrant Filipino workers. The L300 van, pickup Strada and the SUV Montero are also selling well.

By Elaine Ramos Alanguilan, Manila Standard Today

Tsikot.com Philippines

Car loans climbed in June as the local automotive industry continued posting sales growth amid the perceived economic downturn.

Data from the central bank showed that automobile loans (ALs) stood at P79.1 billion as of end-June, 3.3 percent higher than the loans extended for car purchases at the end of the first quarter.Automotive loans ratio to the banking industry’s total loan portfolio dipped to 3.4 percent in June from 3.3 percent in March.

The Bangko Sentral ng Pilipinas (BSP) did not report annual comparative data as it is applying a new package in financial reporting. Auto loans are now classified as car loans to individuals for consumption purposes against an earlier classification which combines car loans to individuals and corporate accounts.

BSP data showed that thrift banks dominated the car loan disbursements as they accounted for 58.1 percent of the auto loans in the second quarter. Universal and commercial banks cornered 40.4 percent of the loans, while non-banking financial institutions carried 1.5 percent of the car loans.

The central bank said soured car loans ratio against the total auto loans fell to 5.1 percent in the second quarter.

“The improvement in the ratio from the last quarter transpired as the 5.2 percent drop in non-performing ALs to P4.0 billion came with the growth of ALs,” the central bank said.

Non-performing car loans against the banking industry’s total non-performing loans portfolio stood at 3.0 percent from the first quarter’s 3.2 percent.

Data from the Chamber of Automotive Manufacturers of the Philippines showed that the local car industry sold 61,654 units as of end-June, a 13.6 percent rise from sales as of the same month in 2007. The domestic automotive industry hopes to sell 125,000 units this year.

GMANews.TV

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