Vehicle sales drop by 0.8% in 2025, falls short of target

Philippine automative sales can reach 500,000 this year if interest rates improve after sales in 2025 fell short of the industry’s target, analysts said.

A joint report by the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA) sent on Friday showed that 463,646 cars were sold last year, down by 0.8% from 467,252 units sold in 2024.

Including other industry data, CAMPI said total vehicle sales stood at 491,395 units in 2025, up 3.7% from 473,842 a year prior.

In December alone, CAMPI-TMA members sold 42,870 units, up 2% from 42,044 units sold in the same period a year ago.

“The industry delivered a modest growth last year due to the overall unfavorable market environment during the second half caused by a number of factors such as the reimposition of excise tax on pickup trucks and several natural calamities experienced across the country,” CAMPI said.

Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said that the slight dip in car sales last year reflects “more of a pause than a downturn.”

“Still elevated interest rates, fuel prices, and tighter household budgets made buyers cautious, especially for passenger vehicles, which are more discretionary,” he said in a Viber message.

“That is why CAMPI fell short of the 500,000 target — demand did not disappear; it was delayed,” he added.

According to the industry report, passenger car sales dropped by 23.1% to 92,924 in 2025 from 120,770 in 2024.

In December alone, passenger car sales declined by 20.9% to 8,009 from 10,125 units sold in the same period a year prior.

Commercial vehicle sales, which accounted for almost four-fifths of the total industry sales, rose by 7% to 370,722 in 2025, from the 346,482 units sold in 2024.

In December alone, commercial vehicle sales increased by 8.6% to 34,861 from 32,109 units sold in the same month in 2024.

“The underperformance of passenger vehicles reflects shifting consumer preferences and structural changes in the market,” said Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., in a Viber message.

“Buyers are increasingly favoring used vehicles, ride-hailing, or shared-mobility options, particularly in urban areas where traffic congestion and ownership costs reduce the appeal of owning a private car,” he added.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said that the decline could also be attributed to the faster growth in motorcycle sales in recent months.

“[They] have become a cheaper alternative transport for some Filipinos in terms of lower acquisition costs, maintenance costs, fuel consumption, and space requirements,” he said in a Viber message.

He said that demand for motorcycles has been increasing due to the “boom in delivery and motorcycle taxi services.”

Broken down, sales of Asian utility vehicles jumped by 7.2% to 87,731, while sales of light commercial vehicles went up by 7.2% to 271,630 units.

In 2025, sales of medium-duty trucks slipped by 7.1% to 3,690, while sales of light and heavy trucks grew by 3.6% and 20.5% to 6,783 and 888 units, respectively.

“Sub-segments such as the 1Ton+ multi-purpose vehicles contributed to the industry’s 2025 performance, with a 76.6% increase compared to 2024,” CAMPI said.

“Models in this category include Toyota Tamaraw, Mitsubishi L300 FB, and Isuzu Travis, among others,” it added.

Toyota Motor Philippines Corp. remained the market leader, with sales of 229,447 units in 2025, up by 5.2% from 218,019 units in 2024. It accounted for 49.49% of the market share.

Mitsubishi Motors Philippines Corp. ranked second with a market share of 18.72% after sales fell by 2.6% to 86,808 units from 89,124 units a year ago.

In third spot was Suzuki Phils., Inc., whose sales increased by 7.9% to 21,984 with a market share of 4.74%.

Rounding out the top five were Ford Motor Co. Phils., Inc., which saw a 22.2% drop in sales to 21,784, and Nissan Philippines, Inc., which saw a 23.2% decline in sales to 20,571 units.

Outlook

Meanwhile, Mr. Arce said the industry can reach 500,000 sales this year, but the outlook is still sensitive to economic and policy developments.

“Reaching the 500,000 mark in 2026 will likely depend on a combination of lower financing costs, improved affordability, and a clearer value proposition for consumers, rather than a broad-based surge in demand across all vehicle segments,” he said.

In particular, he said the central bank’s easing monetary policy has the potential to “unlock pent-up demand from consumers who postponed purchases in 2025.”

“Continued infrastructure development, fleet modernization, and stronger business confidence could support commercial vehicle sales, while broader availability of more affordable models and improved supply chains may help revive passenger vehicle demand,” Mr. Arce said.

However, he said that “any renewed inflationary pressures, slower economic growth, or delays in interest rate cuts could again weigh on consumer sentiment.”

“Looking to 2026, hitting 500,000 units is achievable if financing conditions ease and income growth improves,” said Mr. Ravelas.

“The main challenges remain inflation, exchange rate volatility, and expensive credit — but if these ease, 2026 could be the year pent-up demand comes through,” he added.

Electric and hybrid vehicles may also boost industry sales this year.

Data from CAMPI and TMA showed that 32,489 EVs were sold in 2025, accounting for 7.01% market share.

Including other available industry data, EV sales hit 58,905 units, which reflect 12% market share.

“Combined battery, plug-in hybrid, and hybrid EV sales grew 142.5% versus 2024,” said CAMPI President Jose Maria Atienza in a statement on Friday.

“This highlights the public’s growing acceptance and demand for electrified technologies,” he added.

Mr. Ricafort said that better weather conditions in 2026 could help increase demand for cars.

He also cited the increased demand for EVs and hybrid vehicles as potential sales growth drivers amid increasing competition, which is helping “reduce prices and increase options for Filipino buyers.” — Justine Irish D. Tabile, Reporter