From the News! – Your Daily News

Ma. Elisa P. Osorio
Philippine Star

Auto sales went up by 10 percent during the first 10 months of this year as local automakers predicted they will be posting the highest yearend sales in a decade.

A joint statement of the Truck Manufacturers Association (TMA) and the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) showed that total vehicle sales from January to October stood at 104,757 units, up from 95,242 units sold during the same period last year.

However, on a month-on-month comparison sales showed a decline of 2.9 percent.

“Although the effect of the global crisis on the local auto industry is relatively minimal at this point in time, players are preparing for measures to guard against the devastating effect the crisis has had on other larger, mature, foreign auto markets,” CAMPI president Elizabeth H. Lee said in a statement.

Lee pointed out that developed countries like the US and Europe will suffer as a direct result of the global economic slowdown.

Local automakers continue to be cautiously optimistic, supporting the original forecast of 125,000 units to be attained by the end of the year.

“One of the possible ‘side effect’ of some OFWs coming back home is that they will be ‘forced’ to become dual income earners in the short to mid-term. Most may choose to become entrepreneurs against the backdrop of declining job opportunities as a result of the crisis. Bad times could somehow create some good opportunities for entrepreneurs. They must be supported as they are a significant engine for growth,” Lee said.

“Aggressive inventory management to maintain optimum cash flow will be priorities for local operations. At the same time, a market offensive stance to help mitigate the dire effects of the global meltdown locally, is for the government to aggressively support and encourage entrepreneurs most especially during these times,” she added.

Toyota Motor Philippines sold the most vehicles from January to October this year as it captured 36.1 percent of the market. It has sold 37,860 units overall. ?Mitsubishi Motors Philippines Corp commanded 13.9 percent shares with 14,543 units while Honda Cars Philippines Inc was a close third with 11.9 percent of the market which translates to 12,462 units.

Lee said that for the remainder of the year, buyers can take advantage of the last quarter sales programs of most automakes while at the same time enjoy the current price levels which have yet to reflect the full impact of the increase in raw materials and logistics cost.

“Recent model launches have likewise helped boost sales. Buyers can take advantage of remaining limited vehicle inventories with lower prices (while supplies last) while players slowly start to increase car prices reflective of the higher global raw material and logistics costs,” she said.

Sales of commercial vehicles continued to be strong with a growth of 10.5 percent during the 10-month period. Month on month, sales likewise increased by 8.8 percent ?because of fleet sales deliveries, timely stock arrivals and new models introduced. Lee said that the strong performance of the popular multi-use vans, pick ups and AUVs remain the backbone of this particular segment sales.

Toyota sold most commercial vehicles with 34.1 percent market share or 22,899 units. This was followed by Mitsubishi with a 19.6 percent share and 13817 units. Third was Isuzu Philippines Corp with 12.6 percent or 8453 units.

For passenger cars, year to date sales grew 12.3 percent compared to the same period last year. Compared to September 2008, the demand for PC went down by 11.3 percent.

Toyota sold 14,961 units with a 49.8 percent share of passenger car market. Honda had 25.6 percent of the market share with 9632 units while Hyundai Asia Resources had 9.2 percent market share with 3,455 units.

Martin LaMonica
cNet News

General Motors at its centennial celebration in Detroit on Tuesday is expected to showcase the Chevy Volt, a plug-in hybrid electric car that carries the heavy expectations of reversing GM’s slide and slashing consumers’ fuel use.

Buzz around the Volt picked up last week when photos of the production car were captured, showing a less sporty look than the original concept car. But what are the environmental and cost benefits of the Volt?

The Volt will be able to run 40 miles on lithium-ion batteries and get a range of 400 miles from an internal combustion engine that charges the battery. The four-door sedan with a hatchback is set for release at the end of 2010.

GM has not offered many details on the Volt’s fuel economy and didn’t respond on Monday to a request for more specifics. But early estimates indicate that the Volt will deliver a significant boost in mileage and be cheaper to operate than a gasoline car.

Plug-in electric cars also stand to reduce, although not eliminate, air pollution.

“The Volt story has gotten much more interest than other (GM) product introductions because it represents such a dramatic departure. Historically, things were more incremental,” said David Cole, the chairman of the Center for Automotive Research in Ann Arbor, Mich.

GM says the Volt will get the equivalent of 50 miles per gallon on longer trips where an expected four-cylinder engine will be engaged.

But mileage will improve substantially if a person stays within the batteries’ 40-mile range. GM designers targeted a 40-mile battery range because most people drive less than that in a day.

In all-electric mode, drivers can expect the equivalent of about 100 miles per gallon, said David Goldstein, the president of the Electric Vehicle Association of Washington D.C.

In a mixed mode, where the gasoline engine kicks in, Golstein thinks that overall mileage for a 100-mile trip would be about 50 miles per gallon, but would go down to 35 miles per gallon for a 200-mile trip because the gasoline motor is working more.

Compared with a gasoline car, plug-in hybrids like the Volt stand to be cheaper to operate. Goldstein estimates that people will pay between 2 and 6 cents per mile with the Volt, depending on electricity rates.

That price per mile estimate for the Volt is less than the 15 cents per mile that a typical gasoline car costs, calculated Scott Sklar, an alternative energy consultant at the Stella Group.

Comparing the cost per mile of a gasoline car with a battery-powered vehicle is complicated by the fact that many regions in the U.S. have different electricity tariffs that depend on usage and time of day.

Martin Eberhard, the founder and former CEO of Tesla Motors, is one of the first customers of the all-electric Tesla Roadster. After a few months of driving, he reported in his blog that the cost per mile of the Roadster is between 2 and 6 cents per mile.

From an environmental perspective, plug-in hybrids have the lowest greenhouse gas emissions over their product lifecycle compared with other transportation technologies except all-electric vehicles, according to a recent analysis done on the future of transportation published in August by the Massachusetts Institute of Technology.

That’s because electric motors are more efficient than gasoline engines, said Goldstein. Also, electricity generation is several times more efficient than the energy conversion that happens in a car, said Cole.

Similarly, the the Electric Power Research Institute and the National Resources Defense Council (NRDC) last year concluded that adoption of plug-in hybrid electric vehicles would lower global warming emissions, improve air quality, and reduce petroleum consumption by 3 million to 4 million barrels per day in 2050.

Road blocks?

But for all the promise of the Volt, there are some real engineering and business challenges.

The biggest technical issue is the reliability of lithium-ion batteries, in which nearly all auto makers are investing.

The useful life of these batteries is still not totally clear, as they haven’t already been tested in vehicles for decades.

One business model that automakers are looking at is a leasing option, where consumers would lease a plug-in hybrid electric car’s batteries for 10 years, said Cole. After that, the battery would be replaced and potentially used in less-demanding applications such as power grid storage.

A drop in the price of petroleum, which has fallen dramatically since earlier this year, could also put the brakes on the investment in engineering to make plug-in hybrid vehicles less expensive.

Recent reports said that GM is planning to charge about $40,000 for the Volt, more than what was originally anticipated. For the price to go down, there needs to be a multi-year ramp-up in battery production.

“Anyway you look at it, out of the box, this is going to be expensive. These are going to be expensive batteries,” Cole said.

In its report, MIT estimated that plug-in hybrids will be commercially competitive with gasoline cars in eight to ten years.

The battery will weigh 400 pounds, be 5 feet long, and be placed under the car, Bob Boniface, GM’s Chevy Volt design director said in an interview. Boniface said GM had to make a break from the initial concept car design to improve the aerodynamics and fuel efficiency.

The Volt is a series hybrid, which means that the car’s internal combustion engine only charges the battery, rather than drives the car directly. That means an automaker can design engines that run on different fuels.

Cole said that the biggest environmental pay-off from this design will come once ethanol from nonfood sources, called cellulosic ethanol, becomes commercially viable.

A car that uses E85 fuel, a mix of ethanol and gas, could get 400 miles per gallon of gasoline, he said. There are a handful of pilot cellulosic ethanol plants in the U.S., but none are producing at large scale.

For GM, the Volt is meant to help change its image as a vendor or SUVs and other trucks, while giving it important technical know-how in fuel-efficient cars.

“All GM brands are candidates to receive this technology,” said Cole.

Ma. Elisa P. Osorio
Philippine Star

Vehicle sales for the month of August dropped 14.9 percent due in part to limited stock availability, the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) and the Truck Manufacturers Association (TMA) said in a joint report.

However, cumulative sales for the first eight months of the year showed a 13.1 percent growth. In fact, when compared to other countries, the Philippines is doing well. For instance, the US auto market has been dropping for 10 straight months.

In a statement, CAMPI president Elizabeth H. Lee said August is considered the ghost month in the industry because it is seasonally low month

“Auto sales are still on track to reach forecasted growth targets,” Lee said.

According to Lee, sales are expected to increase in the coming months especially with new models recently launched.

Sales targets for the segment are still on target for the year, she added.

Meanwhile, Toyota Motor Philippines sold the most vehicles from January to August this year as it captured 36.1 percent of the market. It has sold 30,073 units overall.

Mitsubishi Motors Philippines Corp. commanded 11.4 percent shares with 8,365 units while Honda Cars Philippines Inc. was a close third with 9.1 percent of the market which translates to 7,679 units.

Sales for both commercial vehicles and passenger cars went down by 21.8 percent and 2.7 percent, respectively.

Lee said the limited stock availability was the source of the decline for passenger car sales. Lee said they expect the trend to be corrected in the coming months. She said September will be a better month for car sellers because of the launch of new models.

Passenger car sales make up 35.2 percent of the market while commercial vehicles continue to dominate the market with a 64.8 percent market share.

Toyota sold the most cars as it cornered 40 percent of the market or 11,730 units in August. Honda sold 7,482 units representing 25.2 percent of the market. Hyundai Asia Resources Inc. was a far third with 8.8 percent market share selling 2,486 units.

Ma. Elisa P. Osorio
Philippine Star

Vehicle sales for the month of August dropped 14.9 percent due in part to limited stock availability, the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) and the Truck Manufacturers Association (TMA) said in a joint report.

However, cumulative sales for the first eight months of the year showed a 13.1 percent growth. In fact, when compared to other countries, the Philippines is doing well. For instance, the US auto market has been dropping for 10 straight months.

In a statement, CAMPI president Elizabeth H. Lee said August is considered the ghost month in the industry because it is seasonally low month

“Auto sales are still on track to reach forecasted growth targets,” Lee said.

According to Lee, sales are expected to increase in the coming months especially with new models recently launched.

Sales targets for the segment are still on target for the year, she added.

Meanwhile, Toyota Motor Philippines sold the most vehicles from January to August this year as it captured 36.1 percent of the market. It has sold 30,073 units overall.

Mitsubishi Motors Philippines Corp. commanded 11.4 percent shares with 8,365 units while Honda Cars Philippines Inc. was a close third with 9.1 percent of the market which translates to 7,679 units.

Sales for both commercial vehicles and passenger cars went down by 21.8 percent and 2.7 percent, respectively.

Lee said the limited stock availability was the source of the decline for passenger car sales. Lee said they expect the trend to be corrected in the coming months. She said September will be a better month for car sellers because of the launch of new models.

Passenger car sales make up 35.2 percent of the market while commercial vehicles continue to dominate the market with a 64.8 percent market share.

Toyota sold the most cars as it cornered 40 percent of the market or 11,730 units in August. Honda sold 7,482 units representing 25.2 percent of the market. Hyundai Asia Resources Inc. was a far third with 8.8 percent market share selling 2,486 units.

Elaine Ruzul S. Ramos
Manila Standard

The Board of Investments will review Executive Order 156, which prohibits the importation of used motor vehicles into the country, amid the controversy surrounding the entry of second-hand units in Cagayan province via Port Irene.

Trade Secretary Peter Favila told reporters he was asked by Senator Juan Ponce Enrile to revisit the Malacañang directive to clarify whether or not Cagayan Freeport was exempt from the prohibition.

Enrile was implicated in the alleged rampant smuggling of used vehicles in his province of Cagayan.

The Bureau of Customs and Presidential Anti-Smuggling Group denied smuggling in the province, adding that the proper taxes were collected.

Executive Order 156, entitled “Providing for a Comprehensive Industrial Policy and Directions for the Motor Vehicle Development Program and its Implementing Guidelines,” bans the entry of imported used vehicles into Philippine customs territory.

The Supreme Court unanimously voided the inclusion of the Subic Bay Freeport Zone in the directive, which effectively limited the importation and resale of used vehicles within the Subic Bay Freeport.

The high court ruled with finality that used motor vehicles that come into Philippine territory via the secured fenced-in former Subic Naval Base area may be stored, used, or traded therein, or exported out of the Philippine territory, but they cannot be imported into the Philippine territory outside of the former American base.

“In particular, the senator wants a clarification on the provision of the directive that provides for the areas covered by the prohibition,” said Favila.

Cagayan Export Zone Authority has filed a case before the Regional Trial Court of Aparri, Cagayan, arguing that order did not apply to the ecozone.

Cagayan ecozone officials said the October 2007 final ruling of the Supreme Court upholding the constitutionality of EO 156 was not clear whether or not the directive applies to areas other than Subic Bay.

“It is a legal issue, but we will look into that,” said Favila.

Favila said while used motor vehicle imports were prohibited in the country, he also recognized the issue that many Filipinos could only afford to buy a second-hand vehicle.

“I have asked local vehicle assemblers to come up with an affordable people’s car so people won’t have to buy used vehicles that are cheaper,” said Favila.

While sales of new vehicles, as reported by the Chamber of Automotive Manufacturers of the Philippines Inc., continuing to post double-digit growth despite the harsh economic environment, the industry thinks it still needs to work on its competitiveness.

Cito Beltran
Philippine Star

The exposé reportedly authored by members of the American Chamber of Commerce concerning “car smuggling” in Port Irene is now construed as payback for the insults that Senator Juan Ponce Enrile hurled at them in a previous Senate investigation.

On one hand the exposé may be intended to embarrass and steal the thunder from JPE, but on the other hand it could be a red herring intended to distract JPE and the public from focusing on pressing matters such as the speculative prices of fuel.

The public has to realize that such a bold move that was short of implicating Enrile, as the Godfather of smuggling in Port Irene is not something that foreign businessmen enjoy or sanction. Losing face may be a big deal but it is not enough ground to risk long-term corporate interests and investments.

Whatever motivated the exposé I can say from my vantage point that those people made a serious miscalculation. This open attack against Enrile will have very serious fallout and the most visible players will be the first to suffer for their folly. Unfortunately non-aligned or apolitical companies are sure to be affected when their particular issues and concerns become public in the coming months. In other words, the AMCHAM boys just dragged every American company into their disaster.

If certain American businessmen thought to discredit Enrile, they should have remembered a phrase that was coined by American politicians: “He may be a son of a bitch, but he is OUR son of a bitch”. There is sufficient nationalistic fervor seething in the ground that could immediately be released against such trouble makers particularly companies that have a history of abandoning the country during its difficult times and returning when the harvest was plentiful.

From the looks of it the expose’ will seriously backfire because it has stirred up and shed light on an even greater sin: The creation of state sponsored monopolies.

For all intents and purposes Port Irene is metaphorically just another pocket of resistance put up by rebellious entrepreneurs who believe in the right of Filipinos to import, to sell and to buy used vehicles. From the Port of Manila, Clark, Subic, Davao, Cebu and now Port Irene, we have seen a long running battle between the big car companies who have repeatedly influenced government to shut down small businesses involved in the niche market of imported used cars.

The government, particularly officials of the Arroyo administration have acted as proxies, dummies or fronts for the car manufacturers by crafting executive orders, tax edicts or filing legal cases from the lowest court all the way to the Supreme Court. In effect they have become “Replacement Assassins” determined to wipe out any attempt to provide Filipinos with alternatives to meet their automotive requirements.

Many people may be surprised and misled into thinking that the Supreme Court had decided that all second-hand car importations are forever banned. The opinion apparently concerns SBMA or Subic as a free port but not all ports of the Philippines, at least that seems to be the argument of JPE.

This piecemeal legal war happens because the issues are quite ticklish if not illegal. On one hand you have the presumed right of every individual to buy a used vehicle as long as you pay taxes. On the other hand you have the commitments of a state to the monopoly they created in exchange for tax revenues, job creations and business development.

But in our consumer driven economy, he who has the cash is suppose to be the King. Unfortunately the State and the monopoly it created wants to grab the money any which way they can even if the monopoly no longer provides jobs or creates added business. In fact with the imposition of VAT on all products, the state no longer needs to honor its commitment to a dishonorable monopoly.

Now that the Amboys have pissed off  “Super Lolo” we can probably expect questions of constitutionality, separation of powers and privilege, as well as abuse of authority to impose taxes and restrictions related to free and fair trade. Senator Enrile may also want to investigate the very industrious officials of the automotive monopoly on how they managed to solicit and enforce a P500,000 mandatory excise tax on any car imported into the Philippines.

JPE can ask how the Arroyo officials perform with such fervor like trained attack dogs, yet are unbelievably blind and unconcerned about how the car manufacturers in the Philippines continue to benefit from so much incentives yet abandoning all of their previous commitments to support tire and battery manufacturers in the Philippines.

Almost all brand new vans, pick-ups and SUVs sold in the Philippines are CBU or Completely Built Up units which means no more manufacturing, which also means no more local contents. The fact is the automotive monopoly of the Philippines are actually importers of brand new cars who just want to grab and force the secondhand buyers to buy their over priced vehicles designed to be obsolete or excessively expensive to maintain after five years.

So even American companies such as Goodyear tires which have maintained a manufacturing facility in the country for 50 years can’t benefit from the state sponsored monopoly. Motolite, which has displaced foreign brands for car batteries, also can’t benefit. Yet all the incentives go to the monopoly.

When Enrile took up the cudgels for the right of Filipinos to import second hand vehicles, he unwittingly nominated himself as their champion to fight the state sponsored monopoly of automotive manufacturers. Who better to fight this war than a man who knows every aspect of legislation, taxation and has most recently emphasized that his remaining years will be “for country”.

God willing, Manong Johnny can give every Filipino consumer the gift of having the right to choose. Perhaps when the war is won, every Filipino who has worked hard for his money and paid his taxes can get the respect they deserve from a government that is preoccupied in respecting foreign monopolies and their dummies.

Gil C. Cabacungan Jr.
Philippine Daily Inquirer

MANILA, Philippines—Claiming that a Supreme Court ruling upholding a government ban on the importation of used cars was wrong, administration Sen. Juan Ponce Enrile, also known by his initials JPE, Wednesday defended the entry of thousands of used vehicles into Port Irene in Cagayan, his home province.

Enrile brought along his son-in-law and used-car importers from Port Irene to the Senate to rebut a report by the American Chamber of Commerce (Amcham) that implied the Cagayan Export Zone (CEZ) in Port Irene had displaced Subic Freeport as the country’s entry point for imported second-hand luxury vehicles.

Enrile’s son-in-law, James Kocher, was part of the CEZ contingent that met the Amcham delegation, which visited Santa Ana, Cagayan, from May 12 to 14.

“He’s my son-in-law, my representative, to see to it that there is no smuggling. That’s my area. I don’t want anybody to smuggle there. If there will be smuggling there, that will be me. But modesty aside, I haven’t smuggled even a toothpick to this country,” Enrile said at a press conference.

Flourishing business

Enrile said Kocher operated the 50-hectare car yard, which is enclosed by 10-foot walls, “where all these cars go before they are registered so that there will be no smuggling.”

The operation of the yard is not a concession granted to his family, according to the senator.

Enrile, a former defense minister and acting customs commissioner during the Marcos regime, said that Port Irene’s flourishing used-car import business was legitimate and that the proper taxes on all units sold in the country had been paid.

Constitutionality of order

The senator threatened to question the constitutionality of Executive Order No. 156, a 2002 edict issued by President Gloria Macapagal-Arroyo and upheld by the Supreme Court in 2006, should Amcham and the Chamber of Automotive Manufacturers Philippines Inc. continue to push for a crackdown on second-hand vehicle imports.

EO 156 banned the importation of used vehicles for resale in the country, shutting down the multibillion-peso, used-car import business in Subic.

“The problem of car manufacturers will just get worse. The Supreme Court decision is wrong. With all due respect to them, they made a mistake,” Enrile said.

He said only Congress, not Malacañang, could ban any item from being imported, noting that the presidential decree amending the Tariff and Customs Code does not cite used cars among the banned items.

US state department

Enrile challenged Amcham, Ford, General Motors and others to show a single case of smuggling in Port Irene.

He specifically mentioned two members of the Amcham team who visited the port in May—John Forbes (who the senator claimed was introducing himself as part of the US state department) and Henry Co (chair of Ford Motor Philippines).

“I don’t care if he (Forbes) is from Timbuktu. Nobody can threaten me in my own area. Nobody can threaten me in this country. We are not doing anything illegal. If Mr. John Forbes or Mr. Henry Co can put up a plant to provide a cheap car for the people of this country, and affordable for ordinary people like you and like many ordinary Filipinos, we will close the operation in Port Irene,” the senator said.

Different market

Enrile disclosed that his group was in discussions with a foreign car maker that could build a car worth $4,000, which could run from 15 to 20 kilometers per liter of gas.

Enrile said Ford was sore because it could not boost its market share in the country as its units were expensive, gas guzzlers and took months to have a part replaced.

In the case of Japanese assemblers, Enrile said they were selling automobiles built overseas and thus were not deserving of the billions of pesos in incentives granted to them by the Board of Investments.

“The people who are buying cars in Port Irene cannot buy the cars assembled in this country, let alone the completely built-up units brought here. We’re serving a different market,” he said.

Worth defending

Enrile said the used-car business was worth defending because it served a market different from the one addressed by mainstream sellers.

“If a 1995 Pajero would be allowed by the government to run in the streets of Manila using the fuel that we have, why should not a model 1995 Pajero be allowed to be imported into this country and be used in the streets of Manila? What is the difference? Safety? Security? Health? What’s the basis?” he said.

As for his son-in-law, the senator said Kocher served as his personal representative when he and the CEZ contingent met the Amcham delegation.

“For the information of these malicious people, my son-in-law is there because I cannot go there to supervise the place. I told the locators, I will allow you to operate your business in Port Irene but no smuggling. Because I cannot go there to enforce the system,” Enrile said.

He said Kocher had nothing to do with smuggling. “If they will investigate him, what is his crime?” he asked.

Senate probe

“When the cars come to the free port, they go to a yard enclosed by a high wall and no car can get out from that yard without paying the correct taxes. Everything is recorded and we challenge anybody to go there, examine the records and find out if there are any cars that are smuggled,” he said.

The Senate committee on ways and means, chaired by Sen. Francis Escudero, is looking into smuggling in the country.

Although he refused to bill it as a “showdown,” Escudero said next month’s hearing would invite representatives from the Subic, Cebu and Cagayan free ports, along with officials of the car industry and foreign chambers, including Amcham.

“There will be no sacred cows in the hearing. Without fear or favor we will get the facts. It is not our intention to malign or destroy anyone but to simply get the facts and raise the revenues of government,” he said in a text message.

Enrile welcomed the Senate investigation but he denied that he would use the venue to “clean” his name.

“There’s nothing to clean,” he said.

Ermita defends Enrile

In Malacañang, Executive Secretary Eduardo Ermita defended Enrile, saying the senator’s home province is not a haven for car smugglers.

Ermita said he was “very sure” that the senator, who crafted the law creating the CEZ, would not allow his province to be a center of car smuggling in northern Luzon.

“I’ve known him. Who is (a national) leader that will condone illegal activities (in his own turf)?” Ermita asked.

Malacañang, however, ordered its own anti-smuggling task force to investigate the claim of the Amcham that the CEZ was being used by car smugglers.

“I asked the Presidential Anti-Smuggling Group (chief), Bebot Villar, to look at it and give us the report,” Ermita said. With a report from Michael Lim Ubac

Ben Arnold O. de Vera
Manila Times

THE increasing demand for fuel-efficient vehicles and the continuous remittances of overseas Filipino workers (OFWs) will keep the domestic automotive industry on track to meeting its sales target despite skyrocketing fuel prices worldwide, according to the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI).

On the sidelines of the launch of the upcoming 2nd Philippine International Motor Show, Elizabeth Lee, Campi president, said that more car companies are selling fuel-efficient units, reflecting the growing number of customers’ intent on saving up on gas. These low-displacement cars have propped up this year’s sales to date, she said

“Due to rising gasoline prices, fuel efficiency is now an important criteria in purchasing a car. Also, more motorists now are ensuring efficient maintenance of their cars and employing economical driving habits so they could save up,” Lee said.

The CAMPI president said more money sent home by OFWs is spent on buying vehicles, adding, “Lately, it was observed that more Filipinos feel that [buying] a car gives back a larger return of investment than buying a house or putting the money in the bank.”

Last week, the Bangko Sentral ng Pilipinas reported that OFW remittances grew 14.7 percent year-on-year to $6.8 billion in the first five months this year. It forecast remittances to reach $16.4 billion this year from $14.4 billion last year.

However, Lee acknowledged that more expensive fuel dampens local car companies’ operations, specifically in terms of their logistics and procurement of raw materials. “But the impact is not just felt in the Philippines. It is a global phenomena,” she said, adding, “Despite the increasing cost of production, not a lot of local assemblers have increased car prices.”

For instance, Nissan Motor Philippines, Inc. is even reducing its prices this quarter, according to Valentino de Leon, the company’s senior vice president for administration and corporate planning.

De Leon said the company cut prices to boost sales and remain competitive. He said Nissan would launch a relatively inexpensive variant of its X-trail next month.

The Nissan executive is hopeful that sales targets would still be met, but admitted that rising gas prices has resulted in a “wait and see” attitude among buyers.

CAMPI recently reported that June sales fell 1.2 percent to 10,772 units from the 10,900 sold in May. Sales for the first six months however were still up by 13.6 percent year-on-year at 61,654 units from the 54,257 units sold in the same period last year. The five-month total accounts for 49.13 percent of the industry’s target of 125,500 units for the whole year.

Elaine Ruzul S. Ramos
Manila Standard

THE automotive industry sold 61,654 cars and trucks in the first half of the year, up 13.6 percent from the same period last year, even as buyers shifted to fuel-efficient vehicles amid escalating petroleum prices.

“The overall Philippine automotive industry… remains relatively strong and stable,” said Elizabeth Lee, president of the Chamber of Automotive Manufacturers of the Philippines Inc.

With its first-half performance, the industry must sell 63,846 units in the remainder of the year if it is to meet its target of 125,500 units for 2008.

Lee said consumers were beginning to recognize the importance of fuel efficiency in the vehicles they bought as a result of rising fuel costs.

“Buyers are changing the way they use vehicles with utility [dual purpose vehicles for personal and business use] as well as conservation as a shift in mindset,” she said.

Commercial vehicles continued to dominate the market in the first six months, with a total of 40,651 units sold and year-on-year growth of over 15 percent.

Sales of passenger cars grew 10.9 percent with a total of 21,003 units sold.

Lee said growth was sustained on a year-to-date basis, but month-on-month sales dipped slightly by 1.2 percent last month, when only 10,772 units were sold compared to 10,900 in May.

She said the industry not only had to contend with the impact of rising fuel costs on sales, but also with typhoon Frank, which shortened selling days and disrupted the business operations of most provincial dealerships.

But Lee said the local industry still fared better than the other car industries in the region, since the decline in sales last month was still manageable compared to the double-digit sales drops seen in other countries.

The industry should still be able to show some growth for the whole year, she said.

“Sales are expected to be stable next month. Auto players continue to be cautiously optimistic. The forecast for year-end sales remains positive,” Lee said.

Toyota Motors Philippines Corp. stayed ahead with a total of 22,209 units sold, and for a market share of 36 percent.

But its sales slipped by 1.1 percent month-on-month, with only 4,003 units sold last month compared to the 4,046 units sold in May.

Mitsubishi Motors Philippines Corp. was a far second with 8,365 units sold and a market share of 13.6 percent.

Honda Cars Philippines Inc. took the third spot with 7,679 units and a 12.5-percent share.

Isuzu Philippines Corp. was at no. 4 with 5,185 units sold and an 8.4-percent share.

Hyundai Asia Resources Inc., the only Korean brand, placed fifth with 5,064 units sold and a market share of 8.2 percent.

Buyers continued to favor Asian utility vehicles, with sales improving 3.3 percent month-on-month to 3,034 units in June from only 2,938 units in May on fleet deliveries.

Although sales of light commercial vehicles last month declined by 8.8 percent from May, the overall sales result for the first half was still the strongest, with a 20.6-percent growth for this segment alone.

Compact wagons and full-sized sports utility vehicles bore the brunt of the decline in sales last month. But sales for the first half of the year remained positive, contributing 20.6 percent to the overall growth in the light commercial vehicle segment.

The slowdown in business and high fuel prices contributed to the low performance of light trucks, with sales declining by 15.5 percent to 136 units last month from 161 units in May.

Deferred purchases of most trucks and buses resulted in a 28-percent fall in sales, to 59 units in June from 82 units in May.

Manila Standard

Local automotive sales rose 10 percent year-on-year to 28,904 units in the first quarter of 2008, sustaining the momentum last year when they climbed past the 100,000 mark for the first time in a decade.

The Chamber of Automotive Manufacturers of the Philippines Inc. said sales in March hit 10,624 units, up 12 percent from the level in February and 4.1 percent on year.

“There is still a relatively strong demand for vehicles as consumers continue to buy cars, albeit with much more discretion as higher food and fuel prices come into play in the purchase decision,” said Campi president Elizabeth Lee in a statement.

She said consumers appeared to prefer vehicles that double for personal and business use.

“Buyers are also smarter nowadays, choosing to purchase brand new cars that yield a longer lifespan, making their investments last,” said Lee.

Passenger car sales grew 7.6 percent in the first three months of the year to 9,830 units, while commercial vehicles increased 11.8 percent to 19,074.

Commercial vehicles continue to dominate the market with a share of 66 percent.

“The industry still foresees a growth for the year. Sustained economic growth is also key to the industry’s growth as it is positively correlated to auto industry growth,” said Lee.

Campi sees total industry sales of 125,000 units in 2008 from the actual 117,903 in 2007.

Lee said remittances of migrant Filipino workers would help boost private consumption despite the stronger peso.

She said the upcoming 2nd Philippine International Motorshow to be held in the second half of the year was also expected to sustain demand for new vehicles.

The robust growth of the passenger car segment is expected to be sustained in the coming months, helped by promotional activities and the launch of new models.

The commercial vehicle sector grew 11.8 percent on year, which Lee said was a good start for the dominant category.

She attributed the growth to stock availability and continuous promotional activities. “We forecast sales to continue to be strong in the coming months,” she said.

Toyota Motors Philippines Corp. held on to the top spot with 10,119 units sold in the first quarter and a corresponding market share of 35 percent.

Honda Cars Philippines Inc. was a far second with 4,034 units sold and a market share of 14 percent, followed by Mitsubishi Motors Philippines Corp. with 3,684 units and 12.7 percent.

Hyundai Asia Resources Inc. followed at the fourth spot with 2,369 units and a market share of 8.2 percent.

Isuzu Philippines Corp. rounded up the list of top five best-selling vehicle brands with 2,330 units sold and market share of 8.1 percent.

Elaine Ruzul S. Ramos