Business

Lockdowns likely to drag imported car sales to deeper fall after July slump

Lockdowns likely to drag imported car sales to deeper fall after July slump

MANILA, Philippines — Sales of imported vehicles shrank month-on-month in July, and the industry might be headed to a deeper fall as new lockdowns in August weigh on demand.

What’s new

Imported cars sold reached 4,862 units last month, narrower by 2% compared to June sales, data from Association of Vehicle Importers and Distributors Inc. (AVID) showed on Friday.

Compared to a year ago, unit sales contracted at a faster pace of 5%. However, sales from January to July fared better year-on-year to 35,092 units sold, up 43%.

Why this matters

Vehicle sales are often treated as benchmarks for economic strength, such as in the Bangko Sentral ng Pilipinas’ case since it monitors this to gauge consumer appetite for durable goods.

These days, household consumption, which historically accounts for 70% of the country’s gross domestic product, remains weak as a result of pandemic curbs.

What VIPs say

While the threats of new lockdowns bear watching, the industry is not facing uncharted waters. Still, fresh lockdowns in the capital region and some provinces this month to arrest the spread of Delta variant could weigh on demand.

“The gradual adaptation of the automotive industry to ‘now normal’ operations is mainly driven by the valuable lessons gathered and learned over the course of the period,” AVID President Ma. Fe Perez-Agudo said.

Other figures

  • In the first seven months, the industry sold 25,127 units of light commercial vehicles, mostly used for transporting goods. Sales under this segment, which makes up 72% of industry sales, grew 52% year-on-year.
  • Passenger cars sold in January-July period hit 9,110 units, inching up 15% year-on-year.