car bullish

Local car industry lists reasons for bullishness
by Max V. de Leon/BMirror/11.25.08

CONSIDER these: low car-to-people ratio, returning overseas workers who will be looking for new sources of livelihood, local banks still enjoying liquidity and the rising income of Filipinos. These factors inherent to the Philippine market are what, local automakers say, kept them confident these days—even if their counterparts in the developed economies are already frowning. Elizabeth Lee, president of the Chamber of Automotive Manufacturers of the Philippines Inc., said the growth potential in the country remains very high amid the worsening financial and economic crisis. For instance, Lee said, there are currently only 22 owners of vehicles for every 1,000 people in the country, compared with the US where 800 out of 1,000 individuals own a vehicle. With the income of Filipinos rising and the returning overseas Filipino workers turning into entrepreneurs, Lee said the auto industry expects to sell a lot to first-time buyers next year. “The first-time car buyers will come from the expanding upper-C segment who are graduating into the B segment,” Lee, also senior vice president of Universal Motors Corp., said. Supporting the desire of these buyers to purchase vehicles are the financing offers of local banks, which remain liquid and largely unaffected by the financial crisis as attested to by the Bangko Sentral ng Pilipinas, she added. Lee said the high price of oil would not stop them from buying vehicles. It will just influence what type of vehicles they will purchase, which will, of course, be the fuel-efficient types and those that can double for personal and business use. With this, Lee said they remain confident that the industry will reach its target of selling 130,000 units next year even if some of those who already own vehicles will probably postpone making purchases in 2009. Mel Dizon, vice president of Mitsubishi Philippines, said unlike the US and other developed countries, the Asian Development Bank has projected that the Philippines will just experience an economic slowdown and not a recession. “The worst thing that we could do is to import the confidence problem in the US to the Philippines,” Dizon said. He said the government should continue investing in social services, infrastructure, housing and utilities to continue stimulating the economy. Also, Lee said the government should continue giving more support to the micro, small and medium enterprises, especially in terms of financing. With the local banks maintaining their liquidity, Dizon said there will be no credit freeze in the country, although they will put greater emphasis on due diligence. The local car industry continues to grow its sales by 10 percent this year and is poised to achieve its sales target of 125,000 units, as compared to the US and other developed markets that are already seeing declines in vehicle sales.