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Philippines - Car Sales Decelerated, Still Relatively Better
Dec 10, 2008

Car sales in the Philippines declined in October 2008 as a consequence of the worldwide financial turmoil, limited stock availability and rising cost of production.

According to the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi), the auto industry of Philippines is slowing down. It sold 10,624 Units in October 2008, falling short of 11,194 Units sold in October 2007. Sales performance in October 2008 remained 2.9% lower than the previous month’s sales figure of 10,937 Units, as reported by BusinessMirror.

Further, the total sales figure of 104,757 Units was recorded for the period of Jan-Oct 2008, increasing 10% over Jan-Oct 2007. Also, recording a growth rate of 12.3%, 37,573 Units of passenger car were sold during the same period. However, in October 2008, just 3,880 Units of passenger cars were sold, indicating a decline of 11.3% over 4,373 Units sold during the same month previous year.

The declining trend in the Filipino auto sector was triggered by the global economic meltdown. The auto market in the country is appearing too weak to face the drastic effects of the financial crunch. As a result, the automobile sector of Philippines is suffering severely.

Furthermore, one of the important factors that led to the decrease in sales of passenger cars is the limited availability of stock. In such a difficult situation of the market, domestic auto manufacturers are managing inventory so as to regulate optimum cash flow. In addition, globally soaring costs of raw materials and transportation have increased the cost of production of the vehicles and consequently, the consumers have to give high cost for their purchase.

However, the Philippines is comparatively less affected than developed countries such as Europe and America. These countries are major victims of the economic crisis, with the US recording 30% slump in auto sales. The launch of latest car models by the auto manufacturers has also contributed considerably in limiting the decline in the country’s auto industry in comparison of other countries.

According to a Research Analyst at RNCOS, “Though presently, it appears as if the global economic meltdown has affected the Philippines auto industry to a lesser extent, but the auto companies should be prepared to face any unwanted situation in future, as this crisis is getting even more devastating.”

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