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Government Fuels Growth In Philippine Auto Industry
Jun 18, 2007

Prospects for the auto industry in the Philippines appear highly favorable in comparison to 2006 due to a variety of factors especially the initiatives taken by the government.

As per the projections made by the local automotive industry, this year there will be a rise of 8.5 percent in actual sales  in comparison to previous year and the figures will reach 108,000.
Manila Standard Today featured news of a 5 percent target in full-year sales growth at the beginning of the year by the Chamber of Automotive Manufacturers of the Philippines Inc.

The news published on
Money
suggested that by all indications sales are set to achieve an industry target of surpassing the 100,000 units sales in 2007 provided a ban on used car imports continues to be implemented alongside the ability of the peso to maintain its strength as stated by Elizabeth Lee, president of the Chamber of Automotive Manufacturers Association of the Philippines (CAMPI).

Most of the growth is expected from commercial vehicles, which make up 60 percent of the market, with an improvement of 11 percent in comparison to last year’s actual sales. The forecast for passenger cars however is a mere 4.7 percent growth from the level last year.

Philippines is witnessing increasing auto sales due to a combination of factors. These include greater fleet/corporate purchases, entry of new models, stability in fuel prices, complete and stringent observance of the Supreme Court order eliminating second-hand vehicle importation, and rapid economic growth. Other factors are policy modifications that contributed to lower cost of conducting business, an environment conducive to investment and a largely optimistic election result that favored increasing auto purchases.

Further boost in the country’s auto sales is expected from aggressive marketing campaigns by major assemblies apart from long-term and simpler financing terms. Rural infrastructure projects are also expected to enable increasing economic activities to be conducted in the rural scenario. With improved infrastructure transportation of goods from the countryside to the urban locations will be made speedier and easier, contributing to escalation in sales of Asian utility vehicles, buses and trucks.

A
RNCOS research analyst concludes that there is likelihood of positive sales growth on the average in the months ahead, thanks to a well-regulated Philippine auto industry and the government’s active participation in promoting the development of flex-fuel vehicles in the country.

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