Domestic Autos Market Outperforms Neighbours

In 2008, vehicle sales in the Philippines stood at 124,449 units. This amounted to a rise of nearly 6% compared with the total completely built unit (CBU) sales recorded in 2007. Moreover, 2M09 sales remained reasonably steady despite the global downturn causing precipitous plunges elsewhere in the world (40% year-on-year (y-o-y) in some countries). Total CBU sales for the two-month period registered a decline of 2.5% y-o-y, although the February figures show a rise of 2.7% month-on-month (m-o-m) to 9,027 units. Relative to many other countries, we anticipate that the Philippines' car sales will remain reasonably well-shielded across the course of the year. At this stage, we do not expect the country to enter a recession, with real GDP growth predicted to remain positive, although private consumption will come under some pressure. As such, we predict a small fall in car sales for 2009 of 4% y-o-y, followed by a modest recovery in 2010 to CBU sales growth of 4% y-o-y.

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