Auto industry expects to hit pay dirt this year
The Philippine auto industry is expected to get a major boost this year as the country’s economic growth continues to drive up vehicle sales.
Board of Investments (BOI) Executive Director Lucita Reyes said Thursday that higher car sales would not only lead to big paydays for car distributors, but would also help revive the auto manufacturing industry, which could lead to the creation of tens of thousands of jobs, directly or otherwise.
Car sales rose 11.6 percent last year to a record 184,248 units, according to separate reports from the Chamber of Auto Manufacturers in the Philippines Inc. (CAMPI) and Association of Vehicle Importers and Distributors (AVID).
“This perceivable increase in demand is a signal to take advantage of opportunities to expand,” said Reyes, speaking at the opening of the 9th annual Manila International Auto Show in Pasay City.
Despite the increase in car sales in the country, Reyes noted that there were still just 33 registered cars for every 1,000 Filipinos, showing the country’s higher potential for growth, compared with neighbors like Thailand, Malaysia, and Indonesia, where their respective industries are more mature.
She also noted that the country’s gross domestic product (GDP) per capita, which measures the average prosperity of every citizen in a country, could reach $2,500 this year.
“According to many studies, once this level is surpassed, motorization will set in,” Reyes said, adding that the expected higher level of car ownership would be “fueled by a growing economy.”
She added that over half of all registered vehicles in the country, or 1.7 million cars, are already more than 10 years old and will have to be replaced soon.
She said the bright prospects for car sales in the country should encourage more auto manufacturers to reinvest in the Philippines, which has a market of 95 million people. The country is also in the center of the world’s fastest-growing region, Southeast Asia, which means the Philippines can be a valuable part of the supply chain of many auto manufacturers in the region.
