NOT a single soul was surprised. I refer, of course, to the nosedive of vehicle sales in 2018. Even before 2017 could say goodbye, sales predictions for the year just ended were one and the same: the motoring industry would absorb sales blows left and right.
The main reason, as we all know, is the Tax Reform for Acceleration and Inclusion (TRAIN) law that imposed gargantuan excise taxes that readily sent prices of many models soaring almost sky-high. The tax measure was a necessary evil for the government to jump-start its ambitious “Build, Build, Build” program, which needs billions for the much-delayed infrastructure-based thrust targeted to orbit nationwide.
Along this line, the following are some of our experts’ predictions for 2019:
DANNY ISLA, The founding president of Lexus Manila Inc.
“While I was away for most part of last year, I took a keen interest in what was happening within the motoring industry. Last year’s double digit sales decline could primarily be attributed to the implementation of the Train law. You will recall that in anticipation of higher tax rates that pushed prices up, customers bought more vehicles than what they probably actually needed in 2017. There was an abnormal demand, which subsequently affected the sales caused by the Train’s implementation. To make matters worse, global oil prices skyrocketed, affecting fuel prices and dampening potential new demand for cars. Inflation, likewise, peaked. It was a doomed combination for sales. I anticipate, however, that vehicle sales will be on a rebound in 2019. People actually get used to new price levels and consider current levels as the new norm. Fuel prices have normalized and the economy appears to be more stable now. With the election in May, it is expected that there will be more money in circulation from campaign funds. Political parties normally purchase vehicles for added mobility of candidates and their supporters. I hope for the industry to return to its vigor.”
BOB SHAW, Auto Nation Group Inc.
“In my opinion, 2019 has the potential for growth coming from the seesaw that was 2018. Declining inflation rates and sustained GDP in Q4 this year, as well as the relatively stable retail volumes of the industry in the same period provides a springboard for the first half of 2019. This, coupled with new model introductions, stronger support from financing companies and increased spending [election year] will ensure a better 2019 for the entire automotive industry.”
VINCE LICUP, Dealer of Chevy, Foton, MG and Nissan.
“THIS 2019, we will see:
- More photokup sales over SUVs mainly because of train-induced prices affecting SUVs.
- Resurgence of Kia mainly because of Ayala’s entry—a marquee player; also, BMW will shoot up because of SMB’s vaunted war chest.
- Nissan will finally claim its rightful global position as Top 3 here (after 30 years of waiting).
- TCCI’s MG might make wonders.
- “Build, Build, Build” of the Du30 administration will propel higher sales on LDT segments, mainly for Foton, Hino and Isuzu.
- Pseudo sports cars, priced under P3M, would be a trend, including similar sports cars from Chevrolet, Nissan, Toyota and Ford.
- Sales of vans and photokups will be neck-to-neck a la Pacquiao versus Marquez in a similar duel between Toyota and Nissan.
- Overall, no government law can stop the growth of the industry as owning a car is an integral part of the Filipino Dream!”
FELIX MABILOG, President of Mahindra
“I think the motoring industry will more than recover in 2019. We are still way below the average sales volume of our Asean neighbors. Considering our population, we should be selling already near the 1 million mark like them. 2018 was down simply because vehicle buyers advanced their purchases in 2017 due to the impending excise tax. From 2019 onward, with the expected GDP still around 6.5 percent, industry sales growth could soar to 20 percent annually.”
GLEN P. DASIG, President of Peugeot PHL
“The industry will continue to undergo correction resulting from years of tremendous growth year over year, as well as the implementation of the Train 2 law. However, we remain cautiously optimistic for growth in the second half of the year because of the strong fundamentals in the Philippine economy, the projected 6-percent GDP growth and the upcoming elections.”
JOSEPH BAUTISTA, Isuzu PHL Sales Division Head
“Isuzu sees more car buffs buying vehicles again in 2019. The modest growth in light commercial vehicle sales will continue this year. IPC remains confident that the market will be able to adjust to the new SRPs, and those looking to buy their new vehicle have also adjusted with their next purchase.”
TINI AREVALO
Toyota First Vice President, Brand and Product Planning, Vehicle Sales Operations
“For 2019, we estimate a 10-percent auto industry growth. This is mainly due to the expected improvements in economic conditions, driven by increased government spending on infrastructure projects under the Build, Build, Build program and election-related spending.”
PEE STOP More industry experts’ opinions coming soon…Happy January birthday greetings to Ray Butch “Elvis” Gamboa and Vernon “Sean” B. Sarne. Here’s to your health—and wealth!…Why Tivoli sold “only” 27 units in 2018 is another unpalatable surprise as this SsangYong model performs like magic, whether handling, ride-wise or fuel consumption. I am speechless. The Tivoli, only P1 million-plus, could yet be Korea’s greatest wonder since the invention of kimchi…My deepest condolences to the loved ones of Ma. Cristine “Baby” Concordia, who suddenly succumbed to pneumonia on January 6. Babes, full of life and brimming with energy before she fell ill, was my fellow MTRCB board member. You will be missed, Baby.