Auto sales rise despite a drop in demand for cars

New vehicle sales jumped by an annual 2.9% in February, the slowest growth in five months amid a decline in passenger car sales, according to a joint report by the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA).

The industry report released on Wednesday showed vehicle sales increased to 39,164 in February from 38,072 units in the same month in 2024.

At 2.9%, this is the slowest year-on-year growth in five months or since the 2.4% sales growth in September 2024.

Month on month, vehicle sales grew by 4.1% from 37,604 units sold in January.

In a statement, CAMPI President Rommel R. Gutierrez attributed the higher sales in February to “supply-chain stability, growing demand for electric and autonomous vehicles, and global economic conditions.”

“There has been a notable consumers’ preference for connected and personalized driving experiences, alongside a shift towards sustainability and environmental concerns,” Mr. Gutierrez said.

“Technological advancements in artificial intelligence, sensors, and infotainment systems, among others, are showing potential to transform the industry over time. These factors will contribute to the overall positive sales trends in 2025,” he added.

CAMPI set a sales target of 500,000 units in 2025. If realized, this would represent a 7% year-on-year increase from the record-high 467,252 units sold in 2024.

Data from CAMPI-TMA showed passenger car sales fell by 15.4% to 8,154 units in February from 9,638 units a year ago.

Month on month, sales of passenger cars went up by 5.5% from 7,729 units in January.

Meanwhile, commercial vehicle sales climbed by 9.1% to 31,010 units from 28,434 in the same month a year ago. This accounted for 79.18% of the industry’s total sales.

Month on month, sales of commercial vehicles went up by 3.8%.

Broken down, light commercial vehicle sales rose by 10.2% to 23,404, while Asian utility vehicle (AUV) sales rose by 5% to 6,681.

Sales of light-duty trucks and buses grew by 7.4% to 554 units in February from 516 units in the same month last year, while sales of medium-duty trucks and buses went up by 9.6% to 286 from 261 last year.

In February, sales of heavy-duty trucks and buses surged by 39.3% to 85 units from 61 units sold last year.

For the first two months of the year, vehicle sales went up by 6.4% year on year to 76,768 units from 72,132 in the same period last year.

Commercial vehicle sales rose by 12.6% to 60,885, while passenger car sales dropped by 12.2% to 15,883 in the January-to-February period.

As of end-February, Toyota Motor Philippines Corp. remained the market leader with a 47.68% share as its sales rose by 10.7% to 36,606 units.

Mitsubishi Motors Philippines Corp. came in second with a 17.2% increase in sales to 15,548 units in the January-to-February period. It accounted for a 20.25% market share.

In third spot is Nissan Philippines, Inc. which saw a 13.7% drop in sales to 4,442 units in the first two months.

Rounding out the top five were Suzuki Phils., Inc., which saw a 20.6% increase in sales to 3,558 units, and Ford Motor Co. Phils., Inc. which posted a 35.6% drop in sales to 3,334 units.

Sought for comment, Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said that “economic recovery” remains the key driver for the demand for cars.

“However, the slowdown last month was due to seasonal demand, and the economic uncertainty arising from Trump’s ‘DisTRUMPTion,’ which is keeping consumers cautious,” he added.

Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said that the lower passenger car sales can be attributed to consumers’ preference for larger models.

“It may have to do with the preference for sport utility vehicles (SUVs), AUVs, and pickups, especially with more lower-priced versions to choose from the biggest automakers… and large or extended families in the country,” said Mr. Ricafort in a Viber message.

“The unusually higher number of typhoons, storms, floods, and shear lines may also have triggered demand for these types of vehicles,” he added.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan said that the sales growth in February was driven by strong demand for commercial vehicles, “particularly SUVs, pickups, and fleet units, as businesses expanded operations.”

“Consumer preference has shifted away from passenger cars, leading to a decline in sedan sales as buyers opt for more versatile and fuel-efficient options,” said Mr. Limlingan in a Viber message.

“The increasing adoption of hybrid and electric vehicles reflects government incentives and a growing interest in sustainability,” he added.

The CAMPI-TMA report showed that 1,816 electrified vehicles (EVs) were sold in February, bringing two-month sales to 3,416 units.

While the outlook for car sales remains positive, Mr. Limlingan said “higher interest rates, inflationary pressures, and supply challenges, could impact affordability and inventory levels.”

RCBC’s Mr. Ricafort also noted the growth in automotive sales is starting to normalize “closer to gross domestic product growth of about 6% for 2025.” – Justine Irish D. Tabile, Reporter