Tight Car Financing Seen in 2009
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
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