New vehicle sales in the Philippines declined by 5% to 9,027 units in February, from 9,474 units a year earlier, according to data released by the Chamber of Automotive Manufacturers of the Philippines (CAMPI).
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Economic growth continued to slow in the first two months of 2009, with exports dropping sharply and domestic sentiment impacted by the deteriorating global economy.
Sales in the first two months of the year dropped by 2.5% to 17,818 units, a much better performance compared with the double-digit fall in the final two months of 2008. Commercial vehicle sales were 7.6% lower at 11,272 units, despite strong demand for light commercial vehicles following the launch of new models. Passenger car sales grew by 7.6% to 6,546 units in this period.
CAMPI still expects the domestic vehicle market to grow by between 2-4% this year, after growing by 4.4% to a ten-year high of 124,000 units in 2008. But this target looks increasingly difficult to achieve given the widely anticipated slowdown in GDP growth this year to between 3-4%, from 4.6% last year and 7.2% in 2007. Vehicle sales are expected to weaken further in the coming months and a second-half recovery may prove to be elusive.
Remittances from overseas workers are expected to fall sharply this year, with many returning home as overseas demand for contract workers declines. Export demand will inevitably continue to decline, led by lower demand in Japan and the USA, while unemployment at home is also on the rise. Consumer sentiment has weakened significantly in the last few months
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Tony Pugliese
