Coronavirus (Covid-19) to severely affect PH auto sales, says US credit rating agency

MANILA: And the hits just keep on coming.  After bouncing back with a 3.69% increase in total vehicle sales in February 2020, the Philippine auto industry is expected to take a big hit due to the enhanced community quarantine (ECQ) to control the spread of Covid-19.

According to US macro intelligence and credit company Fitch Solutions, we should expect an extremely modest 0.4% growth instead of the initial projection of  7.4%.

The report states that the major contributing factors include "closure of non-essential establishments like dealership networks" and that consumers will spend more judiciously, avoid purchases of non-essential items like automobiles.

Its negative effect will be more evident after first half of the year and could reduce sales of the passenger car segment in 2020 by 1%.

Growth of light commercial vehicles will also be stunted. From the previous forecast of 7.7% growth, it is projected to come down to 1% after the ECQ.

Not all news is bad news though. The report indicates that "over the long-term, higher incomes and pent-up demand will drive vehicle sales."

Over the next nine years, sales of passenger cars is expected to go up by 6.8% and reach an annual volume sales of 210,062.

The same can be expected of light commercial vehicles between 2021 to 2029.