The Booming Automotive Industry in Philippines
|Carmudi examines the current and future state of the automotive industry in Philippines and other Emerging Markets|
Carmudi’s report on ‘The Booming Automotive Industry in Emerging Markets’ provides a detailed look into the global state of automotive sales and how car purchasing behaviors have changed due to the drastic increase in internet and mobile penetration, rising GDP, and the emergence of a middle class. The findings in this report are the results of Carmudi quantitative surveys conducted online with both car buyers and car dealers, and in-depth interviews with industry influencers throughout the Philippines.
The State of Global Car Sales
Growth of Auto E-Commerce
Globally, auto E-Commerce has grown at such a staggering rate that now as many as 80% of new car customers and almost 100% of used car customers begin their car shopping experience online. With internet and mobile penetration significantly growing in emerging markets, the rate of moving the car shopping experience online is beginning to mirror that of Western Markets. In the Philippines, the fastest-growing automobile market in the ASEAN region, close to 30% of car buyers report using the Internet to conduct research on a car before making a purchase.
Changes in the Philippines Car Sales
The Carmudi study found that over 73% of car dealers in the Philippines reported an increase in car sales over the past twelve months, while only 26.7% reported a decrease. According to the Philippine Daily Inquirer, this phenomenon is caused by the average income of $2,600 triggers a rapid increase in motorization. The higher income, plus easier financing, have contributed to stronger sales, especially in private cars.
The Shift to Online
Car dealers in the Philippines have become more digital when it comes to advertising their listings. Our study found that 66.7% of car dealers in the country are majorly focused on advertising their listings through the Internet. Online classifieds are also seen as a great way to advertise car listings, with over 46% of car dealer survey participants currently advertising their car listings on online classifieds. Car dealers in Philippines are aware of the potential that social media has, with over 33% reporting active social media use.
The Future of Car Sales in the Philippines
With healthy and sustainable economic growth, coupled with strong consumer purchasing power, the Philippines is becoming an increasingly attractive prospect for car manufacturers. In 2014, the Philippines grew 6.1% and is expected to reach around 7% by the end of 2015. The IMF reports that this growth is attributed to more Filipinos joining the labor force and rising investments. Maria Fe Agudo Perez, President of Hyundai Asia Resources Inc. (HARI), who commented on the future of car sales in the country said, “The local automotive industry remains upbeat as increased consumer income and outlook continue to supplement robust consumer demand. The Passenger Car Segment still has the lion’s share of total automotive sales. Total industry sales are expected to grow by 15-20% by the end of 2015”.