MANILA -- New car sales in the Philippines peaked last year, as the entry of new models spurred more auto purchases in Southeast Asia's fastest-growing economy, industry groups said Tuesday.
Total sales rose by 24.6% to 359,572 units, according to a joint report by the Chamber of Automotive Manufacturers of the Philippines Incorporated and the Truck Manufacturers Association. Sales of Hyundai Philippines, the biggest among those companies that are not affiliated with either of the two groups, stood at 25,021 units at the end of September, up 50% year-on-year, suggesting that the industry surpassed its 370,000-unit target for 2016.
"Successful introductions of new models complemented by various events and promotions enabled us to meet the increasing customers' demands in an expanding Philippine market," CAMPI president Rommel Gutierrez said.
The International Monetary Fund expects Philippines' gross domestic product per capita to have breached the $3,000 mark last year. The overall economy expanded by 7.1% in the third quarter, while interest rates have been kept relatively low, allowing banks to offer cheap auto financing packages. Auto loans extended by banks jumped 29.1% to 353.80 billion pesos ($7.14 billion) at the end of September from the year before, data from the Philippine central bank showed.
Toyota Motor Philippines, which grew sales by 26.95% to 158,728 units, cornered the leading market share, with 44.14%. Mitsubishi Motors Philippines, which captured a 17.08% market share, sold 61,400 units, up by 13.52%. Ford Motor Philippines sold 33,688 units, an increase of 32.77% and equivalent to 9.37% market share.
CAMPI has yet to set its target for 2017, but Mitsubishi and Toyota plan to begin Philippine production after qualifying for a $600 million incentive program, which could boost car sales. Mitsubishi plans to begin manufacturing its Mirage sedan this year, while Toyota aims to start the local production of its Vios sedan next year. Both companies are required to produce 200,000 units each over a period of six years under the program.
But while local vehicle production is being ramped up, higher excise tax on car purchases could be imposed as early as 2018 as part of President Rodrigo Duterte's tax reform program.
Philippines is the third fastest growing automotive market in Southeast Asia. According to the ASEAN Automotive Federation, Singapore led the car sales growth from January to October, with 50.3% cyclical expansion, followed by Vietnam with 32.1%, the Philippines, and Indonesia with 2.6%. Brunei, Malaysia and Thailand all reported contraction, while data from Myanmar was not available.