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Philippines: Greater Manila lockdowns pull down car sales to 10-month low
MANILA, Philippines — Car sales plummeted to their lowest level in 10 months in April, adding to growing evidence that consumer demand suffered a fresh blow from reinforced lockdowns that likely halted the economy’s already slow bounce-back.
A total of 17,843 units were sold by members of the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) last month, down 18.3% from March.
It also marked the lowest number of cars sold since June last year when sales hit 15,578 units. Year-on-year, growth of over 1,600% was distorted by the fact that in same period a year ago, strict pandemic lockdowns shocked the sector with an unprecedented sale of just 133 units.
The same story applies this time around, with CAMPI President Rommel Gutierrez pinning the blame for the month-on-month decreased on the reinstitution of enhanced community quarantine and the modified version of it in key urban areas including Metro Manila.
The government put back Metro Manila, Cavite, Laguna, Bulacan and Rizal under ECQ last March 27 and 2 weeks after under MECQ after more infectious coronavirus variants caused a spike in cases in these areas. The MECQ expires on May 14 unless otherwise extended.
But apart from pandemic prohibitions, Gutierrez added that banks’ hesitation to lend have started depressing demand for cars, a key durable good tracked by no less than the central bank to help gauge economic activity.
This indeed is already happening. Just a day before the CAMPI report was released, separate data from Bangko Sentral ng Pilipinas (BSP) showed lending by big banks slumped 4.5% on-year, the steepest decline in nearly 17 years.
In addition, car makers have long complained about the government’s decision to slap higher safeguard duties on car imports. While by their name CAMPI members are meant to assemble vehicles at home, in reality, around 80% of local cars sold in the Philippines are already imported from countries like Thailand, Japan and South Korea.
Still, the industry has continued to benefit from low-base effects. From January to April, CAMPI data showed members selling 88,155 units, up 36.3% year-on-year.
In 2020, car sales from CAMPI hit a 7-year low of 222,793 units. — Prinz Magtulis
Source: https://www.philstar.com/business/2021/05/11/2097499/greater-manila-lockdowns-pull-down-car-sales-10-month-low