The automotive industry raised its 2017 sales target to 450,000 vehicles from an earlier estimate of 430,000 units on sustained economic growth and new government policies.
The Chamber of Automotive Manufacturers of the Philippines Inc. and Truck Manufacturers Association expect combined sales of 400,500 units this year, on top of 49,500 units from other manufacturers.
Campi said in a letter to members that the group decided to revise the forecast on improving state of “economic growth due to the trust of investors in the present administration.”
It said the possibility of the market buying Euro 2 models instead of Euro 4 vehicles due to delayed compliance could result in stronger sales, “but not as strong as that of 2016.”
It said another reason was the perceived impact of the proposed increase in excise tax on automobiles that might prod consumers to buy vehicles ahead of the supposed implementation of the tax measure by 2018.
Campi said the new sales forecast of 450,000 units was a bit conservative “to protect the image of the industry to the public.”
Campi and TMA said the changing buying trend “may have a negative effect on the automotive industry in general. Therefore,we may not reach the desired growth higher than 12 percent.”
Vehicle sales in the fourth quarter of 2016 yielded unsatisfactory results. Three segments posted slower sales including Asian utility vehicles which went down by 2.5 percent, light trucks by 31.4 percent and truck and buses category 4 by 29.6 percent.
Industry estimates showed the group would be hard-pressed to replicate the 24.6-percent growth in 2016 as most manufacturers already released new models while the minor model changes or refreshed models were not expected to have a significant impact on sales.
Campi said the 2017 sales target would be about 11.7 percent higher than the 403,003 units sold by the industry in 2016.
Under the government’s automotive program, the automotive industry is estimated to sell 500,000 units by 2018.
The automotive sector accounts for 12 percent of the industrial output and 4 percent of the gross domestic product of the Philippines.