Car industry eyes recovery in 2023

Jenina P. Ibañez, Reporter

THE AUTO INDUSTRY expects to recover back to pre-pandemic sales as late as 2023 after operations suffered from the effects of the pandemic, Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) President Rommel R. Gutierrez said.

Mr. Gutierrez, who is also first vice-president at Toyota Motors Philippines, said the stricter lockdown last year caused a sales slump and a two-month long plant production shutdown followed by limited plant operations.

“It took us until September that we were able to go back to two (production) shifts,” he said at a BusinessWorld Velocity online event on Monday. The Taal Volcano eruption early last year also caused delivery disruptions, he added.

“Conservatively, around two years from now, 2023, that’s our (recovery) projection,” Mr. Gutierrez said, noting that this would be achievable if there are certainties in the market, consistent government policies, and widespread inoculation against coronavirus disease 2019 (COVID-19).

Car sales for 2020 declined 39.5% to 223,793 units, data from CAMPI and Truck Manufacturers Association (TMA) showed.

Despite the decline, Mr. Gutierrez said car companies were able to launch products online.

“Internally, we also had the chance to adjust our business plan — the way we do things. We were able to identify those tasks that need to stop to those tasks that we think we can continue doing,” he said.

Mr. Gutierrez said he is cautiously optimistic about sales this year. The industry sold 26,230 vehicles in February, down 12% from 29,790 units in the same month last year but 12.2% up from January levels.

“We’re happy with that figure, February sales figure, but again we don’t know what will happen in the coming months,” he said, adding that car companies are also looking to tap the growing logistics requirements in the country.

The best-case scenario for the industry in 2021, Mr. Gutierrez said, is a 30-35% sales growth. But safeguard duties on imported cars, which he said is derailing the industry’s recovery efforts, could lower growth to 20-25% compared with last year’s figure.

The Department of Trade and Industry (DTI) imposed 200-day provisional safeguard duties on imported cars to protect local jobs after it found a link between a decline in local industry employment and an import surge, based on a petition from an auto parts labor group.

The Safeguard Measures Act or Republic Act No. 8800 allows domestic producers to ask the government to conduct an investigation into their import competitors if they claim to have been injured by excessive imports. Car manufacturers have started collecting deposits from customers for imported cars while the Tariff Commission conducts its own investigation.

Mr. Gutierrez said that the duties are causing market uncertainties as prices go up.

“The industry, in order for it to survive, would have to have local production as well as importation of motor vehicles,” he said.