Vehicle sales fell 39.6 percent in 2020 from a year ago because of the impact of the quarantine restrictions imposed by the government to contain the spread of the coronavirus pandemic.
Data from the Chamber of Automotive Manufacturers of the Philippines Inc., the Truck Manufacturers Association and the Association of Vehicle Importers and Distributors showed their members sold 276,232 vehicles in 2020, down from 457,110 units in 2019.
CAMPI president Rommel Gutierrez earlier attributed the sharp decline to the effect of the global health crisis on many industries, including the automotive sector.
CAMPI and TMA data showed sales of brand members reached 223,793 units, down 39.3 percent from 369,941 units sold in 2019. Similarly, AVID sales in 2020 dropped 40.7 percent to 51,719 units from 87,169 units. Some brands are members of both CAMPI and AVID.
AVID attributed the decline in sales of members to the lockdowns, limited economic activity and weak consumer demand.
AVID, which has 21 members and 26 brands, said it finished the year strong with 5,683 units sold in December, or a 15-percent increase from November. It said the data indicated a slow but steady recovery from the “most challenging period in Philippine automotive industry.”
“Automotive was among the hard hit sectors in this pandemic, and we continue to feel the impact as sales, after-sales and auto-related services remain lackluster. Despite the hurdles, the industry quickly adapted to the new normal, survived and are finally seeing some signs of revival. However, we see more headwinds in the coming months,” AVID President Ma. Fe Perez-Agudo said.
The three automotive groups particularly expressed concern over the safeguard measures slapped on imported vehicles which could further dampen demand and pull down sales in 2021.
“We project further reduction in sales volume which in turn poses risk of employment downsizing, not to mention government revenue loss,” Gutierrez said.
He said the safeguard measures would put to naught the recovery efforts of industry players and stakeholders from the pandemic.
“As if the adverse impact of the pandemic is not enough, the decision to impose provisional safeguard measures against imported vehicles is yet another blow to the automotive industry,” he said.
CAMPI said that while it was supporting the development of local vehicle manufacturing, it opposed the imposition of safeguard duty against imported vehicles as most members were bringing in certain brands and models that are not assembled in the Philippines.
The measure will also encourage revival of the used vehicle market and may defer nvestments in dealer expansion and parts localization.
“Furthermore, this could potentially weaken trade and economic relations triggered by retaliation by concerned exporting countries to the Philippines,” Gutierrez said.
AVID also said the provisional safeguard measures on imported cars would severely impact the recovery outlook of the industry.
“We have clearly and consistently expressed our position that penalizing imports will not trigger investments or create more jobs, much less address issues on the regional competitiveness of our local manufacturing sector,” said Agudo.
“While the worst may be behind us, we still have a long way to go. If we are to restore consumer confidence and revive this sector, we should focus on creating more job opportunities, upgrade infrastructure and logistics and improve the ease and cost of doing business. We are all for the long-term development of the auto industry in the new normal,” she said.