New Market Report Now Available: Philippines Autos Report Q3 2012

Recently published research from Business Monitor International, "Philippines Autos Report Q3 2012", is now available at Fast Market Research

by Bill Thompson

(WireNews+Co) - Boston, MA - 20 October 2012

A major blow to autos manufacturing in the Philippines came from Ford Motor's announcement it will close its Santa Rose facility by end-2012. The closure is highly significantly for the domestic production segment, given that Ford currently stands as the sole autos exporter in the industry. Industry estimates show that Ford exported around 10,000 cars each year, out of a full capacity of 15,000 units. Ford Group Philippines' President Randy Krieger's revelation that the company could not make a strong business case for future production highlights the broader concerns of the industry participants about the final form of the Motor Vehicle Development Programme (MVDP). Following Ford's announcement in June 2012, local parts suppliers urged the government to support vehicle assemblers domestically.

View Full Report Details and Table of Contents (http://www.fastmr.com/prod/451345_philippines_autos_report_q3_2012.aspx) (http://www.fastmr.com/prod/451345_philippines_autos_report_q3_2012.aspx)

In view of the growing caution and pessimism, BMI has revised down its production growth forecast to 2016. After a close to 16.5% year-on-year (y-o-y) increase in autos production to 60,200 units in 2012, we forecast growth to average 1.6% y-o-y during the rest of the forecast period, to 64,400 units by 2016. The obvious upside risk to this forecast is the entry of new players into the autos manufacturing segment. While some carmakers have been reluctant to make investment decisions regarding the Philippines until the new MVDP has been finalised, Chinese carmakers Great Wall Motors and Chery Automobile are reportedly keen to set up assembly operations in the country.

Things look more promising for the demand side on the other hand. Encouraged by the robust 6.4% y-o-y growth in the country's real GDP during Q112, along with the introduction of new car models, improved supply conditions and sustained consumer confidence, domestic autos association CAMPI expects recordbreaking sales in 2012. CAMPI President, Rommel Gutierrez, revealed that the growth is significant in both the passenger car and commercial vehicle segments. BMI accordingly forecasts vehicle sales to reach 218,700 units by the end of 2016, growing by an average of 9% per annum between 2012 and 2016.

With a view to cashing in on this growth, in April 2012, Japanese carmaker Mitsubishi Motors together with authorised dealers Zamboanga Motors began construction of a showroom and service centre on a 5,320 sq m lot located in Governor Carmins Avenue, Zamboanga City. The dealership will have six vehicle displays and 19 work bays. It is expected to be fully operational by December 2012. Meanwhile, Filipino car dealer Autostrada Motore is looking to bring the Ferrari and Maserati brands to the country. These announcements bolster BMI's view that the competitive landscape in the country is still far from saturated by carmakers and the market therefore provides ample opportunities for new entrants.

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