How will the possibility of an Economic Crisis affect the local car industry?

[gearhead]

We have heard and read reports that the US crisis is affecting car dealerhsips there in a big way. One article posted in fact likened them to canaries in coalmines as being one of the first to suffer in this type of scenario.

Would the car industry here in the Philippines be immune. Would some have to shut down? Would there be a decline in sales? In repairs done in authorized centers? A change in behavior for car maintenance? Since the luxury cars cater to an upper end with huge sums of cash would they be unaffected?

Will it not affect the industry at all?

How will it also adjust the behavior of the car driving public. Honestly I have been toying with the idea of using a scooter/small motorbike for short distance non-raining runs.

[ghosthunter]

The economic crisis isn't as heavily felt here (yet) but the oil price crisis is still in full swing.

Generally people would prefer to buy smaller cars either for the cheaper price or being more fuel efficient or both. Other people would prefer buying 2nd hand cars (one to three years old) which is more affordable than brand new yet having the same reliability of a brand new car without the initial depreciation costs included.

[uls]

what's killing the auto industry in the States right now is the scarcity of credit.

Banks don't want to lend... they are hoarding cash...

alam naman natin that most people buy vehicles thru financing.

If financing is hard to get, vehicle sales go down.

---

dito sa Pinas, wala pa naman credit crunch.

Financing is very much available.

[gearhead]

what's killing the auto industry in the States right now is the scarcity of credit.

Banks don't want to lend... they are hoarding cash...

alam naman natin that most people buy vehicles thru financing.

If financing is hard to get, vehicle sales go down.

---

dito sa Pinas, wala pa naman credit crunch.

Financing is very much available.

Yup financing is available. But we keep seeing reports to tighten belts and all. Will not a huge fall in the US economy affect us here? Won't less remittances be bad for the car industry or are they not connected? Will less OFWs or FilAms be buying real estate? Just wondering if our local auto industry will be immune. Will there be things to watch out for?

[tidus1203]

And that is why car companies were making a killing in the early part of this decade. People are buying cars which they can't afford with easy money that they don't have. The car companies have already made a lot of money (at least the Asian exports, the US brands were still losing money even during the boom days so I dunno what will happen to them now that the industry is in the frontlines of an economic slowdown).

Sa Philippines naman, maybe delay of purchase rather than not affording it might be the only consequence. Afterall, we are more responsible with credit since the banks still hold the debt unlike in the US were they practically spread the debt to everyone.

[uls]

buti nalang primitive, i mean, traditional ang banking system natin dito.

hehe

[Bogeyman]

The economic crisis isn't as heavily felt here (yet) but the oil price crisis is still in full swing.

Generally people would prefer to buy smaller cars either for the cheaper price or being more fuel efficient or both. Other people would prefer buying 2nd hand cars (one to three years old) which is more affordable than brand new yet having the same reliability of a brand new car without the initial depreciation costs included.

According to CAMPI president Elizabeth Lee, the recent trend among the middle class is to purchase brand-new personal rides that can double as business workhorses. This is akin to buying two vehicles on a singular budget.

Given that a lot of Filipino households has at least one family member working as an OFW, she interprets this as a general sentiment that using OFW remittances to start a business venture, and consequently spending on such versatile vehicles as part of the investment, has the potential to give better monetary returns as opposed to saving on low-yield financial instruments such as banks.