We have already completed a month of welcoming 2024 with a new promising flag raised in the local automotive industry.
According to the combined report of the Chamber of Automobile Manufacturers of the Philippines and the Truck Manufacturers Association, the number of registrations in 2023 was 429,807 units, with total sales increasing by 21.9%. Passenger cars accounted for 24% of total sales at 109,264 units. Meanwhile, commercial vehicles accounted for 76% of total sales at 320,543 units. Light commercial vehicles, mainly pickup trucks and sport utility vehicles, accounted for 79% of commercial vehicle sales at 248,148 units.
CAMPI attributes this impressive performance to sustained consumer demand, easy access to credit and improved supply conditions across all brands. The country's market leader remains Toyota, with a market share of 46.5%, followed by Mitsubishi Motors Philippines, Inc. with 18.2%, Ford Group Philippines, Inc. with 7.3%, Nissan Philippines, Inc. with 6.3%, and Suzuki Philippines, Inc. with 4.3%. It becomes. In order of %.
At this early stage, several automakers are positioning their companies for the big battle ahead, aiming to increase the sales and customer share of their products. Mitsubishi has already announced its big entry into the burgeoning pickup truck market with the launch of the Mitsubishi Triton, while Jet Tours unveiled the Dashing Symphony at the recent Media & Friends Appreciation Night.
As the local auto industry heats up, multiple companies are expected to unveil their new models in the coming months. The Manila International Motor Show and the Philippine International Motor Show are two major automotive events that are awaited not only by car enthusiasts but also by various business and industry people.
Experts are boldly predicting a 20% increase in car sales in 2024, and even top local economists are betting on another breakthrough year for the local auto industry. BPI Chief Economist Jun Neri boldly predicts that although the global economy may be unfavorable this year due to various factors, the Philippine economy can weather the storm and have a strong and prosperous year. There is.
And that will also resonate in the local auto industry. This year is expected to be extremely busy with a parade of new brands and models. One of the local banks, Bank of the Philippine Islands (BPI), is very active in opening and expanding its portfolio in local industries. Several other banks are catching up, including Metrobank, Philippine Savings Bank, Maybank and Security Bank.
Dennis Fronda, senior vice president and head of retail lending at BPI, said the bank is now extending auto loans from the usual five years to up to six or seven years. This is very welcome news for the younger generation of car buyers. Mr. Fronda said that BPI is offering several payment solutions through the new BPI MyKotse promotion, which is gradually being accepted by a new generation of car buyers.
Fronda also revealed that electric vehicles (EVs) already account for 4% of the total auto loan portfolio in 2023, with 15% of these new EVs being Chinese brands. Recently, there has been an increase in the entry of Chinese cars into the domestic market, and Fronda said that the current portfolio consists of 16% Chinese cars and 84% cars from other foreign brands.
It is interesting to note that two major car manufacturing companies, Japan and China, are taking different approaches when it comes to vehicle electrification initiatives that are slowly but surely being felt in the local car market. Most Chinese-made cars are electric cars, but most of the Japanese-made cars introduced here are hybrid cars. In other words, it uses an internal combustion engine that burns fossil fuels to generate electricity and supply electricity to the battery.
However, these electric vehicles, whether fully electric or hybrid, are still considered expensive compared to cars running on fossil fuels, so they will have to compete significantly on price. . Although EV sales slowed in 2023, they are still expected to increase in 2024, according to an international report. In the US, EV sales in 2024 are expected to increase by only 16% compared to the previous year, compared to 64% in the US. In China, the year-on-year growth rate in 2023 was 36.5%, while the growth rate in 2024 is projected to be 11.1%. Factors such as reduced incentives, limited charging infrastructure, and saturation of early adopters are major hurdles. To attract the mass market, prices need to be lowered.
Many Japanese automakers are prioritizing maintaining their dominance in the domestic oil-powered vehicle market, but are willing to sit by as their Chinese rivals slowly eat away at their all-electric vehicle market share. I'm gradually starting to realize that I can't afford to just keep watching. Many Chinese automakers are well aware of how Japanese cars dominate the local car market, so they don't go head-to-head with their homegrown rivals.
Instead, Chinese automakers, especially those that have made significant strides in fully electric vehicles, are slowly penetrating the local EV market, sneaking in fossil fuel-powered vehicles.
These two car manufacturing giants have a monopoly on car exports to various countries of the world. According to reports, Japan exported a total of 5.97 million cars last year, compared to 5.22 million cars to China. Although most of the EVs introduced in the country are led by Chinese brands, China remains a major exporter of gasoline vehicles, and exports of new energy vehicles are growing rapidly. Approximately 70% of the 5.22 million cars distributed overseas by Chinese companies were gasoline-powered vehicles. Many of these gas-powered cars went to Russia last year to fill the void left by automakers that pulled out of the country when the Russo-Ukrainian war began. According to the report, “in the first 11 months of 2023, vehicle shipments to Russia increased approximately six times in value terms compared to 2022.” Mexico was also a major export destination for Chinese gasoline vehicles.
As Chinese EVs face difficulties entering the U.S. auto market directly, they are gradually making inroads in several countries in Europe and Asia, where demand for greener energy is high.
So, when you attend your local major car show in the near future, don't be surprised if you see more electric cars (both fully electric and hybrid) than traditional internal combustion engine cars.
– Advertisement –
