AUTO SALES growth could end up as high as 21.5%, led by purchases of commercial vehicles as infrastructure spending hits high gear, according to Fitch Solutions Country Risk & Industry Research, which upgraded its previous projection of 10.2% growth.
In a report, Fitch Solutions said the industry is building momentum in the second half of 2020, with sales improving every month since April with the exception of August, when the government reverted to a stricter form of lockdown for two weeks.
According to the ASEAN Automotive Federation, Philippine vehicle sales in the first 10 months fell 42.7% year on year due to the restrictions on movement imposed during the lockdown.
“We are seeing signs of the automotive sales environment improving albeit at a slow pace,” Fitch Solutions said.
The low year-earlier base will also help supercharge growth rates, with 2020 totals expected to decline 43.1% due to the pandemic and late-year natural disasters.
Fitch Solutions said that it expects the 2021 government infrastructure budget to support demand for commercial vehicles, with the segment driving vehicle sales growth up to 2029.
“The heavy trucks and light commercial vehicle sub-segments… will perform better as these vehicles are most suitable for construction-related activities,” it said.
However, Fitch Solutions expects commercial vehicle sales related to jeepney modernization to be muted next year as the distressed financial condition of transport operators could prevent them from buying new low-emission vehicles even with increased subsidies.
“Operators that experienced hardship during movement restrictions will not be able to afford to renew their fleets in time,” it said.
According to the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association, commercial vehicle sales declined 43.2% to 119,968 units in the first 10 months, while passenger vehicle sales fell 41.3% to 53,067.
CAMPI targets industry sales of 240,000 units in 2020. — Jenina P. Ibañez