2018 was not a high point for the Philippine automotive industry; inflation rose, fuel prices peaked, and taxes went up. Apparently, it also was not an easy time for the Association of Vehicle Importers and Distributors (AVID). Compared to its performance in 2017, AVID slid down by 17% in overall sales, from the 106,285 units to 88,700 units sold in 2018. It reported that poor performance can be observed across all segments.
AVID blames this to the combination of high inflation, increase in the value of borrowing costs, oil price hikes, and tax surges. 35 percent of the total sales belong to the passenger cars (PC) segment led by Hyundai Asia Resources Inc. (HARI) with a total of 19,905 units sold - a 22% landslide from the 25,529 of 2017. Collectively, the segment’s sales dropped by 22% in 2018 with 30,960 units.
Meanwhile, the light commercial vehicles (LCV) segment dove 14%, from 2017’s 66,564 to 57,027. Reigning in this segment was Ford, which sold 22,946 units. JAC Automobile International Philippines Inc., on the other hand, represents the commercial vehicle (CV) segment with 713 units sold.
A detailed analysis reported that the notable drop in performance happened by the end of September, as compared to the same period last year. In 2017, the GDP growth was at 6.8%. 2018’s GDP growth sloped a little downwards to 6.3 percent. according to AVID, despite the drop of performance, 6.3% is still a positive number in the East Asia and Pacific region.
Meanwhile, AVID believes that inflation may tone down this year. As a matter of fact, the group recorded a seven-month slow down at 5.1 percent in December 2018. And, as economic backdrop for better sales poses great probability, AVID is positive that 2019 will shed light to a 10% growth.