Not bad of a crisis and only a 1.2% dip in car sales has been reported for the first quarter of 2009. It seems like the car industry in the Philippines is not much affected by the global crisis.

- Car Finder Philippines

Here is the complete story behind the news.

Automakers Upbeat as Car Sales Dip Only 1.2% in Q1 of 2009

Domestic automotive sales dipped slightly in the first quarter from year-ago levels, with a modest rise in the passenger car segment cushioning a fall for commercial vehicles, industry data released on Wednesday showed.

The Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) hailed the sector’s performance, citing a steeper 37% sales plunge in the United States.

The local auto industry — tagged by the government as a significant contributor to output, employment, investments and exports — sold 28,565 units in the first three months of 2009, down 1.2% compared to a year earlier.

The sale of 10,746 units in March topped last year’s and was nearly a fifth more than the February 2009 figure.

“First-quarter figures show the resiliency of the local automotive market’s performance,” CAMPI said in a statement, calling the 1.2% drop “negligible.”

“So far, our Philippine auto industry continues to buck the general global trend and continues on a growth path,” CAMPI President Elizabeth H. Lee said in the statement.

“We continue to be optimistic and do everything we can to maintain competitive prices and offer vehicles packages at affordable rates that serve consumers’ vehicle needs.”

Asked to comment, University of Asia and the Pacific economist Peter Lee U said the slight drop was not worrisome.

“The car sales drop is of course the effect of the slowdown. [But] I don’t think it would affect local economy. Much of cars sold here are imported [anyway],” he said in a text message.

CAMPI has forecast a 2-4% growth or a flattening at worst for 2009 after posting a 5.6% increase in sales last year.

Continued bank lending and an entrepreneurial trend which is said to be pushing Filipinos to purchase service vehicles drove car sales, CAMPI said.

Passenger car sales performed better than commercial vehicles during the quarter, with the former growing by 4.9% to 10,311. Commercial vehicles, which continued to corner the bulk of sales, fell by 4.3% to 18,253 units.

Toyota Motors Philippines Corp. remained the top seller with roughly a third of the market share but suffered a 3.4% drop in sales.

Mitsubishi Motors Philippines Corp. and Honda Cars Philippines, Inc. trailed behind: Mitsubishi sales grew by 31.9% while Honda — the top seller in the passenger car segment — enjoyed an 11.8% growth.

The slight sales slump has not been without consequence.

Mitsubishi and Nissan trimmed 12% and 16%, respectively, of their work forces effective last February. Some 2,000 contractual workers in electronic auto parts firms, meanwhile, have been terminated, the Philippine MetalWorkers Alliance said in the same month.

In light of this, the Board of Investments has announced that it is reviewing the Motor Vehicle Development Program with a view of possibly providing more tax perks to car firms. Ford Philippines, meanwhile, may be allowed to retain its import privileges even if it does not meet a required export volume.

CAMPI, for its part, had proposed in February that the government draft policies to encourage consumers to favor locally made vehicles in order to preserve car assemblers’ jobs.

by Jessica Anne D. Hermosa, Business World