Prospects for recovery of one of the major economic drivers, the auto industry, are dampened by the continuing lockdown of Luzon and parts of Visayas and Minanao, following a hefty 34% drop in sales for the first quarter.
The Association of Vehicle Importers and Distributors, Inc. (AVID) – with 20 member companies representing 26 global brands – recorded sales of only 14,404 units.
Most, if not all, dealerships and their accompanying repair and maintenance facilities have been closed since March 16, 2020, AVID said. Based on government data, the Philippine automotive sector, directly and indirectly, employs 408,000 people.
“The local industry is reeling from this invisible enemy as vehicle manufacturing, importation, distribution, and maintenance have stopped completely. Demand has likewise declined as consumers spend on more urgent needs. With this disruption, we estimate that car sales may drop by around 40% for the year,” AVID President Ma. Fe Perez-Agudo said.
“The industry is no stranger to adversity but this pandemic will be our toughest challenge yet. We estimate that it would take at least 12 months for the local industry to recover once the ECQ is completely lifted. There will be a ‘new normal’ and we must be quick to adapt since Filipino consumers will be even more prudent and looking for more value in their purchases,” Ms. Agudo added.
The Passenger Cars (PC) segment declined by 43% in the first quarter of 2020 with 4,506 units sold versus the 7,848 units in the same period last year. Hyundai leads this segment with 2,724 units sold, followed by Suzuki with 1,127 units and Ford with 415 units.
In the Light Commercial Vehicles (LCV) segment, year-to-date sales dipped by over 29% with 9,806 units sold. Ford leads this segment with a total of 3,479 units while Hyundai comes in second with 2,797 units closely followed by Suzuki with 2,740 units.
Commercial Vehicles (CV) sales declined by 62% to just 92 units over the period.
2nd quarter sales may dip even further due to the ECQ for the whole month of April and at least half of May in major urban areas.
AVID noted, however, that despite the bleak short-term outlook, many members have joined the nation’s battle to fight COVID-19. Several AVID companies are providing free mobility which includes the transport of our front liners, medical supplies, and essential goods across the country. Some have donated personal protective equipment (PPE), masks, gloves, etc. to COVID facilities. Others are supporting their home communities and LGUs.
“Mobility is the lifeblood that drives the nation’s economy and this has been further underscored by this pandemic. Hospitals, groceries, and other essential establishments rely on mobility for sustained operations. We are working closely with our stakeholders so we can resume our operations, especially our repair and maintenance services, in a manner that protects the health and safety of our workforce and customers, once the ECQs and GCQs are lifted,” Ms. Agudo added.
AVID member companies have used the lockdown to develop COVID-ready processes, structures, and organizations. Health protection and safety strategies are being put in place for employees, business partners, and to meet the emerging needs of the customer in the next normal environment. It added that the industry is very much aware of the protocols on social distancing – wearing of appropriate protective equipment, and additional sanitation measures—which it committed to observe. As an added layer of protection, some AVID members will be conducting antibody testing prior to the re-entry of their workforce. This will be done as part of Project ARK, a private sector-led initiative to conduct mass testing for the new coronavirus at the community level.
“AVID fully supports the government’s initiatives to combat this pandemic and we remain optimistic and confident in the tried and tested resilience of the Filipino. The timely restart of the automotive sector is of utmost importance to mitigate the impact of this crisis since tens of thousands of Filipinos and their families depend on this sector. There is life after COVID and we will be there to ensure better journeys ahead,” she ended. Motoring@MS
