The domestic auto industry is expected to recover in the fourth quarter of 2021 and regain momentum through 2022, according to investment and banking officials.
House of Investments (HI) senior vice president and director of auto operations Johnny Fetalvero said several factors would work in favor of improved auto sales. These include the speed of the rollout of the 2019 coronavirus (Covid19) vaccination, reinvigorated remittances, the regular lifting of restrictions and election spending.
In turn, the increase in economic activities and consumer spending would support the momentum the following year.
Fetalvero explained that auto purchases could be downgraded with record levels of active virus cases in March of this year and the subsequent reimposition of extended community quarantine (ECQ).
âBut the Filipino culture of spending and celebrating during the Christmas season should push auto sales into fourth gear,â he enthuses.
Inquiries from car dealerships last year fell only 20%. But inquiries through their social media platforms have increased, proof that the appetite for auto purchases has remained strong.
Filipinos also feel safer using their own cars rather than commuting to where they need to be during the pandemic.
Ramil M. De Villa, head of the consumer credit group at Rizal Commercial Banking Corporation (RCBC) as of May 15, pointed out that there was an increase in purchases of refinanced cars in the first months after the foreclosure in 2020, while the purchase of new cars accelerated in the fourth quarter of the same year.
De Villa echoed Fetalvero’s ideas about resuming auto sales at the end of this year. In fact, RCBC has implemented its enhanced version of the Covid19 Assistance Recovery Enhancement Program (CARE) with a six-month moratorium for those with car loans.
This resulted in just over 20% of the bank’s customers with car loans enjoying payment holidays last year, with the majority of customers choosing to continue with their usual payment methods.
“I am confident that the normal rise in Q4 will be seen again,” said De Villa.
RCBC and the House of Investments (HI) are part of the Yuchengco group of companies.
SUBSCRIBE TO THE DAILY NEWSLETTER
CLICK HERE TO SIGN UP