Campi report: Auto industry struggled in 2011

The past year was not very kind to the auto industry, with two major disasters—a devastating earthquake and massive flooding—dealing the sector one blow after the other in just a matter of months.

Still reeling from the effects of the March 2011 earthquake that caused a tsunami and a nuclear crisis in Japan, the auto industry barely had time to recover before Thailand was hit by floods that halted operations in many key manufacturing facilities.

According to data from the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi), sales slipped 4 percent to 141,616 units last year from 147,488 units in 2010.

This after registering a 27.2-percent surge in sales in 2010 to 168,490 units, from a dismal 132,444 units in 2009.

The discrepancy in sales figures between those used as a comparative figure for 2011 sales and those used as actual sales in 2010 was a result of industry No. 3 Hyundai Asia Resources Inc. breaking away from Campi in 2011.

The latest Campi report, released last Monday, showed that sales in December alone plunged 24.5 percent to only 10,374 units, from 13,749 units in the same month in 2010. The drastic sales decline was mainly due to a supply shortage stemming from the Thai flooding.

December 2011 sales were also 14.2 percent lower than November’s 12,090 units.

Sales of commercial vehicles, which accounted for the bulk of overall auto sales, dropped 2 percent to 96,754 units in 2011 from 98,749 units the year before. Passenger car sales, on the other hand, fell 8 percent to 44,862 units from the previous year’s 48,739 units.

Amid the difficulties, Toyota Motor Philippines Corp. managed to retain its Triple Crown, lording it over all other manufacturers in overall sales and in the passenger car and commercial vehicle categories.

Toyota sold a total of 54,593 units in 2011, 4 percent lower than the previous year’s 56,855 units. Despite the sales decline, the company maintained its 38.6-percent market share from the year before.

Its commercial vehicle sales hit 35,550 units for a 36.7-percent share of the pie, while passenger car sales reached 19,043 units for a 42.5-percent market share.

Steady decline

Coming from a strong sales momentum in 2010, the industry was off to a relatively good start in the first quarter of 2011, growing 8.2 percent in a cyclically slow season. The effects of the Japan earthquake started to be felt in the succeeding months, slowly eroding the momentum that was built the year before.

The first real sign of trouble came in May 2011, when growth slowed to just 1.5 percent in the first five months of the year. As early as April, however, Campi said it would have to revise its forecast of a 4- to 5-percent growth in 2011, in light of the Japan crisis.

By the end of the first half, the industry suffered its first sales decline in months at 1.6 percent. It was all downhill from there.

The Association of Vehicle Importers and Distributors (AVID) followed more or less the same trajectory. In the first quarter, the group registered a sales growth of 6 percent, but then experienced a sales decline of one percent by August. By the end of the third quarter, the sales drop had inched up to 2 percent, before growing by a slight 0.1 percent by end-October.

AVID had yet to release its 2011 sales figures as of press time.

Despite the industry’s troubles in 2011, AVID president Maria Fe Perez-Agudo expected the auto sector to turn around this year and even grow by as much as 10 percent.

This could be attributed to the expected return to the market of all the supply that was not able to enter the market due to the Japan and Thailand disasters, she said.

She also expressed confidence that vehicle importers could register a larger share of the overall pie at 20 percent, from 2011’s around 15 percent.

This market share expansion, she said, would come from the expected overall growth of the market and the importers’ more aggressive stance in marketing their vehicles.