The automotive industry, including the luxury car segment, may be able to survive the bumpy ride this year and step on the gas if all goes well with the country’s Covid-19 response.
SMC Asia Car Distributors Corp.—local dealer of German brand BMW (Bayerische Motoren Werke AG)—told the BusinessMirror that the car industry is now moving slowly towards recovery, noting that it could be quicker if the pandemic situation improves.
“I believe that the automotive segment is slowly recovering, and with the country finding its way towards resolving this pandemic, I am positive that we will see the industry achieve stability by the end of the year,” said Spencer Yu, president of the car company.
Yu stressed the need for a “national effort” in rolling out a vaccination program across the country. This would put the customers at ease, he said, when visiting showrooms and during test drives of vehicles.
“For a full recovery to be possible, everyone must do their part and practice health and safety protocols in every way possible,” he added.
The government recently extended the enhanced community quarantine (ECQ) for “NRC Plus”—Metro Manila, Cavite, Rizal, Laguna and Bulacan—for one more week or until April 11 as more Covid-19 cases are logged in the country.
The local BMW distributor was among the firms affected by the impact of the pandemic in the past year, including the lockdown measures that slowed down business activities.
“2020 was a journey into the unknown, and we are thankful to have survived the challenge all thanks to the great efforts of the BMW team and the entire BMW dealer network,” Yu said.
SMC Asia Car Distributors saw its sales plunge by 15.5 percent to 611 units last year from 723 units sold in 2019, according to the joint sales report by Chamber of Automotive Manufacturers of the Philippines Inc. (Campi) and Truck Manufacturers Association (TMA).
“It was a significant drop compared to 2019, but we are always thankful to the loyalty of our customers, and the efforts of everyone involved. With this momentum, we are looking forward to making new strides this year,” Yu said.
Earlier this year, the BMW importer and distributor launched its new 4-Series model, which is a two-door, four-seater car. It is available in two variants: the 420i Model Advantage and 420i M Sport.
Return of demand
For Lexus Philippines, attaining pre-pandemic level of car sales will depend on the demand for luxury vehicles.
Lexus Philippines Vice President Carlo Ablaza, in an interview with the BusinessMirror, noted that the company’s sales fell to 474 units last year, or a 24-percent decline from 626 units sold in 2019.
“Despite the decline in total number of sales during ECQ/general community quarantine [GCQ] in 2020, Lexus’ market share increased by 2 percent with 25 percent last year,” he said.
Ablaza recalled that the local Lexus dealer reached a record-high of over 1,200 car sales back in 2017, which normalized to a 600-unit sales level in 2018 and 2019.
This year, the car company is optimistic that it can sell more than 500 units, but the target is still below recent pre-pandemic sales.
Lexus Philippines noted it had to make adjustments when it comes to maintaining customer relationships amid the pandemic. Ablaza said the firm ramped up its digital channels to allow continued communication with existing and potential customers.
This is in addition to complying with safety protocols in terms of operating its showroom, he said.
“In terms of achieving our sales target, we had to adjust and further expand in reaching out to our customers when it was GCQ,” Ablaza added.
This year, the Lexus Philippines official said there will be changes and improvements in some of the dealer’s best-selling models.
Lexus is the luxury car segment of Japanese automaker Toyota.
Toyota Motors Philippines Corp., which accounted for 44.69 percent of the market share, saw its sales decline by 38.3 percent to 100,019 units last year from 162,011 units in 2019.
Campi and TMA sales report noted that total auto industry sales fell by 39 percent to 223,793 units last year from 369,941 units year-on-year.
Image credits: Randy S. Peregrino