Fueled by growth and innovation, the Philippine automotive sector is poised for positive changes and new opportunities in the upcoming months.
Anticipated to build the momentum for car sales this year, this second quarter has seen strong growth, fueled by positive consumer demand, business confidence, and stability in automotive sales, according to an industry report.
The recent joint report from Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMP) and the Truck Manufacturers Association (TMA) showed a significant increase of vehicle sales in the past three months, marking a recovery from the slow growth reported last March.
According to the data, the market saw a 22% increase in vehicle sales in April, reaching from 30,643 units of the same month last year to 37,314 units this year. Notably, the increase of sales came from different vehicle categories, including Asian utility vehicles (AUV) bumping to 47.5% (6,816 units); medium truck sales to 40.9% (355 units); passenger car sales to 37.6% (10,069 units), and light commercial vehicles to 10.7% (19,561 units).
Following this growth, vehicle sales also rose to 5.5% (40,271 units) in May. Moreover, month-on-month vehicle sales started to pick up after small declines from March and April.
“Improvements in supply and good consumer demand, coupled with an increase in automotive financial schemes and extensive sales activities, helped boost sales on a month-on-month basis,” Rommel R. Gutierrez, president of CAMPI, said in a statement.
CAMPI-TMA’s report further indicated a surge in commercial vehicle sales last May at 7.6%, AUV at 32.8% (6,769 units), and passenger car sales at 12% (10,967 units). Light-duty trucks and buses also marked an annual growth of 19.9% (531 units), while medium trucks increased by 7.3%. However, light commercial vehicle sales hit a slight decline by 3.8% year on year, and heavy-duty truck sales with 22% in the same month.
Meanwhile, for the month of June, vehicle sales saw a 7.6% increase year on year, with a total of 39,088 units sold compared to 36,211 last year. Passenger car sales saw a fast growth of 17.8% while commercial vehicles increased by 9.8%. However, June’s monthly sales decreased by 2% compared to the month of May.
Overall, for the first half of the year, CAMPI and TMA noted, commercial vehicles dominated vehicle sales growth at 75%, leaving passenger vehicles at 25%. Commercial vehicle sales increased from 151,567 units to 166,404 units, while passenger cars sold 59,875 units compared to 50,848 units in the same period last year. Currently leading the top car sales are units from brands Toyota, Mitsubishi, Ford, Nissan, and Suzuki.
In sum, automotive vehicle sales in the country saw significant growth in the first half of the year, with 226,279 units sold, increasing by 11.8% in the same period in 2023.
As the industry continues to grow, the automotive sector is seeing notable growth, driven by strong local vehicle sales. Industry professionals are highlighting trends that are changing the landscape of automotive and mobility in the country.
Micromobility
pixabay / kimdaejeung
Micromobility is changing how people get around. Micromobility, which covers bicycles, electric scooters and electric bicycles, are popping up on every street and corner, shaping a modern era of transportation.
According to global consulting firm RSM Global, micromobility is redefining the automotive sector, offering a more convenient and low-cost transportation, perfect for daily transportation. These vehicles are small-scale vehicles, used to transport people and goods designed for short-distance travel. It is also customized for public transportation, offering practical and eco-friendly features pushing to help ease traffic and pollution in the metro.
The rise of micromobility is driving a higher demand for eco-friendly and sustainable mobility solutions. It can further revitalize public spaces into user-friendly cities, making areas more walkable, reducing carbon emissions, and increasing more green spaces within the metro, the firm said.
“It’s not just about diversifying products; it’s a reimagining of the automotive industry’s role in urban mobility. This change is leading to an increased focus on integrated mobility solutions that blend cars, public transit, and micro-mobility,” the firm’s report said.
Electric vehicles
unsplash / Michael Fousert
The automotive world is evolving quickly as different advancements in car technology are getting more popular. Among these developments, electric vehicles (EV) is taking the center stage. Powered by battery technology and maximizing electricity stored in rechargeable batters, these vehicles produce zero carbon emissions, improve air quality, and are seen to be more energy- and fuel-efficient. As the world goes electric, many automotive companies and manufacturers are shifting to EVs.
In line with this positive outlook, EV adoption is gaining momentum in the Philippines, albeit at a slow pace. According to the latest Global Automotive Consumer Studies conducted by professional services firm Deloitte, 18% of Filipinos surveyed prefer hybrid electric vehicles (HEV), while 8% prefer plug-in HEV and 4% prefer battery electric vehicles. The largest share of respondents (66%) still prefer a gas or diesel engine, also known as an internal combustion engine (ICE).
Despite the slow adoption, the Philippine EV market is gradually gaining traction as a top choice for transportation. Electric vehicles have played a significant role in boosting car sales, surpassing 10,000 units in 2023. This marks a huge increase from the 1,000 units sold in the previous year, as CAMPI outlined in a recent report.
Ride-sharing services
unsplash / Jason Miraples
Ride-share services is another seen driver in the automotive scene. Due to the shift in consumer demand, in particular, the younger generation are more interested in ride-sharing services than leasing or vehicle ownership, as RSM Global recently reported.
“This trend may lead to a decrease in individual car sales but opens new revenue streams in service-based models,” the firm said. “This could also lead to changes in vehicle design, prioritizing durability and adaptability for multiple users. Moreover, the focus might shift towards digital technologies for seamless access and user experience in shared mobility platforms,” it added.
For the Philippines, ride-hailing services and apps have become the preferred mode of public transportation, providing a more convenient and secure alternative to traditional transportation. Combined with technology and affordability, these services make transportation easier for daily commute rides and also boost business efficiency. Dominating the ride-hailing market is Grab, with expanded services including food delivery and digital payments. Other popular services include Angkas, Move It, JoyRide, and Lalamove.
Moving forward
Looking forward, the auto industry stands at a crucial point, with continued growth, innovation, evolving consumer demand, and technological advancements — all converging to redefine vehicles into more than just a means of transportation, but likely a necessity in life. The market is set to see steady growth in the upcoming months, offering more opportunities for the industry to flourish and thrive in the ever-evolving landscape.
At the start of the year, the local auto industry aimed for 468,300 units of sales, yet it remains confident in reaching 500,000 units before the year ends. With new models coming out and more innovative releases in the lineup, the outlook for the industry is looking bright. — Angela Kiara S. Brillantes
