Automakers raise ’14 sales projection on strong demand

The Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) remains highly bullish of its prospects for the year, even raising sales forecast to 250,000 units, given the steady rise in demand and the purchasing power of Filipino consumers.

“Last year, the industry soared beyond the 200,000 mark in total vehicle sales—something we have not achieved… We are putting our hopes even higher this year as we revise our 2014 forecast to at least 250,000 units, up 9 percent over the original 230,000 units announced in January,” Campi president Rommel Gutierrez said during a briefing, where he announced the holding of the 5th Philippine International Motor Show in September.

Also, the local auto industry has drawn up “Vision 2020”—a plan that will enable local manufacturers to reach a sales target of 500,000 units in the next six years, Gutierrez said.

“In reaching this target, we are guided by the growing domestic demand for automobiles, fueled by a steady growth in income. The strong domestic market potential is shown by the fact that the Philippines, with a population of 100 million, has a vehicle ownership ratio of only 35 per 1000 population, much lower than those of its Asean neighbors,” he explained.

“As the Philippines already reached a GDP per capita of $2,790 in 2013—higher than the motorization threshold income of $2,500—we are confident that this potential will translate to reality soon. This vision can only be achieved with the right policy direction and government intervention through the issuance of the much-awaited automotive industry roadmap.”

However, Gutierrez also urged the government to provide the infrastructure necessary to support the expected rise in vehicle demand.

Gutierrez further said that the government will have to assist the local automotive industry for it to benefit from the Asean economic integration.

“We might have to make big adjustments to fully integrate into the Asean Economic Community. This is where the government should come in to improve or issue regulations that will help the industry cope with the challenges of this integration,” he said.

“The economic integration will not drastically affect prices as we see it right now, but the challenge is the cost gap between locally produced vehicle and imported vehicles amounting to $2,000. We have to close that [gap] … so we can compete with our Asean neighbors,” he added.

The gap has been attributed to logistics costs involved in importing car parts, as the local content in the cars produced here often make up only about 20 percent.

The local automotive industry accounted for about 12 percent of the industrial sector output and 4 percent of the total GDP.   Amy R. Remo