Closed showrooms, limited marketing strategies, and an almost absent consumer demand – these are the hurdles that the Philippine automotive distributors have to face amid the COVID-19 pandemic that has hit the country. This has started at the implementation of the enhanced community quarantine in March, covering the majority of Luzon, including Metro Manila where the center of commerce is located.
But then again, the qualms of automotive dealers didn’t actually start there. In a letter sent and addressed to Department of Trade Industry (DTI) Secretary Ramon Lopez, the Philippine Automotive Dealers Association appealed to let the automotive sector reopen due to the negative effects of the COVID-19 crisis on automotive production, sales, and after-sales services. The industry disruption started as early as January when the Taal Volcano erupted, causing massive ash fall in nearby provinces.
Of note, several of our country’s top brands have headquarters and assembly plants located in Laguna – just a few kilometers away from the Taal Volcano.
Consumer demand for brand new cars naturally went down during that time, as well, because people, especially those affected by the volcanic eruption, would have probably chosen to buy more important and essential items before thinking about buying a new car.
Needless to say, that negative trend continued as soon as the novel coronavirus entered our country. With limited mobility among the population now, people are thinking twice or even thrice before spending their hard-earned cash on a brand new car. Plus, dealerships are closed to interested car buyers, if any at all, which adds insult to the injury.
Unfortunately, DTI declined PADA’s plea. citing the importance of public health safety above others.
AVID released Q1 2020 sales report
The Association of Vehicle Importers and Distributors (AVID), which is comprised of 20 companies representing 26 vehicle brands in the country, has released its latest sales report – from January to March 2020. As you would have guessed, the numbers aren’t pretty.
Based on the report, the members of AVID were only able to sell a total of 14,404 cars in the first three months of this year. Compared to the same period in 2019, the collective experienced a 34.4 percent dip in car sales – a harrowing turnout, but not surprising at all.
These numbers include passenger cars, light commercial vehicles, and commercial vehicles.
“The local industry is reeling from this invisible enemy as vehicle manufacturing, importation, distribution, and maintenance have stopped completely. Demand has likewise declined as consumers spend on more urgent needs. With this disruption, we estimate that car sales may drop by around 40% for the year,” AVID president Ma. Fe Perez-Agudo said.
March vehicles sales experienced the most notable drop when compared to February 2020 – only 2,649 units were sold in March, which is a 58 percent decrease when compared to February’s 6,262 units. Take note that the enhanced community quarantine was enforced on March 16 in NCR while the Luzon-wide lockdown followed a day after, explaining the plunge.
A few silver linings
Despite the harrowing outcome for the first three months of 2020, there are companies who recorded a positive sales output as compared to the numbers from last year.
Auto Nation Group – comprised of brands Chrysler, Jeep, Dodge, and Mercedes-Benz – sold 178 units of passenger cars from January to March 2020, which is a bit of an increase compared to the 159 units sold in the same period last year. It wasn’t mentioned, however, from which specific brands do these numbers came from. Did more people want a Mercedes at the start of the year only to find out that they won’t be able to drive them frequently? We’re not sure.
Ford Group Philippines also tallied positive numbers for Q1 2020 per AVID’s report. There were 415 passenger cars sold by the company from January to March – a 300 percent increase from the 104 units sold in the same period last year. It’s unclear, however, which of the Ford vehicles are considered under the passenger cars segment. One thing’s for sure – the Ranger and Everest, the brand’s bestsellers, are under light commercial vehicles.
Geely, under Sojitz G Auto Philippines, continued its strong sales presence despite its sole dealership in Quezon City and one model on offer. Geely Philippines entered 2020 with 229 Coolray units sold and ended the first three months with 295 more units tallied. This says a lot about the company’s strong marketing campaign, as well as the trust of consumers with the brand and the car itself.
CAMPI numbers aren’t in yet
As of this writing, sales number for Q1 2020 from the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA) aren’t out yet. Toyota Motor Philippines and Mitsubishi Motors Philippines Corporation (MMPC) belong to this group, which should show us the negative effects of the crisis to the market leaders.
However, we’re not expecting a positive turnout from CAMPI and TMA. Regardless of the company’s position in the market, we’re all in the same shroud of uncertainty during this crisis – and that’s what we’ll have to keep an eye on in the months to come even after the lockdown gets lifted.
For now, all we can hope for is the improvement of the situation in all aspects, locally and globally.