A steady automotive industry in third quarter of 2023

Picking up from gains from previous quarters, the automotive and mobility sector was seen to have performed positively in the third quarter (Q3) of the year as the sector saw a spike in demand for automotive vehicles.

Q3 exceeded automotive forecasts as it hit 99.7 million units, the highest monthly vehicle selling rate since August 2018, according to Jeff Schuster, executive vice-president and group head of GlobalData. Globally, Europe is leading with volume growth of 23%, followed by North America with 17%. Meanwhile, Asia continues to experience sustained growth, led by Japan (17%), followed by South Korea (15%), and China (7%).

For the first nine months, the automotive sector has witnessed double-digit growth. Globally, automotive sales exceeded over 90 million units, making it the fourth month in a row where the number was exceeded.

As reported by automotive web-based platform Automotive World, the full-year forecast has increased by 0.1 points. In 2023, the demand for automotive vehicles is expected to rise in major regions but is expected to remain below pre-pandemic levels.

“As we edge toward the end of 2023, the global automotive market has consistently outperformed expectations monthly, leading to another increase to the forecast from 86.8 million units to 87.9 million units, an increase of 8% from 2022,” Mr. Schuster of GlobalData said.

“The lift in the forecast for 2023 has spilled into 2024, with the outlook being increased to 91.6 million units from 90.2 million,” he added.

For light vehicles (LV) sales, China is leading in the market with 25,196 units sold, followed by North America (16,780 units), then Europe (14,049 units), South America (5,142 units), India (4,200 units), Japan (4,488 units), Southeast Asia (2,984 units), and Middle East (2,640 units).

While sales for LVs in Southeast Asia climbed by 5% month-on-month (m-o-m), it has also decreased by 2% year-on-year (y-o-y) in August 2023. According to GlobalData, the results were caused by lower sales in countries Vietnam, Thailand, and Indonesia.

Due to economic challenges, the data showed LV demand is struggling in the Southeast Asia region. LV y-o-y sales dropped by 6% in July and 17% in August in Vietnam; while it dropped 12% in Thailand and 10% in Indonesia for the whole Q3. However, in Southeast Asia countries like Malaysia and the Philippines, light vehicle demand remained strong.

Malaysia saw a surge in LV sales by 33% (y-o-y) and 8% (m-o-m) in July, increasing by 8% (y-o-y) and 13% (m-o-m) in August. Despite the sales decreasing by 5% (m-o-m) in September, the result was still positive and exceeded the sector’s forecast.

Sales in PHL

In the Philippines, automotive sales have surged to a double-digit annual growth. In July, the Philippine automotive industry saw a 33% increase in vehicle sales. According to the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA), new vehicle sales increased from 27,813 to 37,086 units since last year.

In July, passenger car sales jumped by 49.8% (y-o-y) and 5.82% (m-o-m), LVs by 32.7%, commercial vehicles by 28.5% (y-o-y) and 0.9% (m-o-m), utility vehicles by 14.1% (y-o-y), and light trucks by 0.2%.

“The auto industry is truly inspired to expand its product and service offering to the consumers and businesses alike as seeing this continued growing demand for new motor vehicles is indeed a welcome and significant part of growth development,” Rommel R. Gutierrez, president of CAMPI, said in a statement.

In August, CAMPI and TMA reported that automotive sales increased by 22% from 30,185 units to 36,715 units annually. 

Moreover, a report from GlobalData shared that August sales increased by 28% (y-o-y), marking the country’s eighteenth month in a row of double-digit growth. Additionally, the Philippine automotive sales have increased from 33,000 units in the first quarter of 2023 to 38,000 units in Q3, which led to the continuing trend of growth.

“Consumer demand drives the auto sales further from an already considered pre-pandemic performance a year prior amidst the above inflation target recorded anew in the same period,” Mr. Gutierrez of CAMPI observed.

According to CAMPI and TMA, in August, new vehicle sales rose 21.6% to 36,714 units in August from 30,185 units in the same month a year ago. 75% of the automotive sales were made up of commercial vehicles, totaling a 28% increase since January 2023, and increasing by 13.5% annually. Also, heavy trucks witnessed a 50.6% increase, passenger car sales tallied a 49.9% increase, while Asian Utility Vehicles (AUV) declined by 0.3% (y-o-y) and 8.3% (m-o-m).

Continuing this rise of demand for automotive vehicles, vehicle sales grew by 9.5% annually in September. Unfortunately, September was also the month when the country’s double-digit growth in automotive sales slowed down.

According to the data, two-thirds of the vehicle sales were made up of commercial vehicles, increasing by 6.5% (y-o-y) and 9.2% (m-o-m) in September. Whereas, light commercial vehicles rose by 4.6% and AUV sales by 14.9% Additionally, light truck sales increased by 21.7% and passenger car sales by 19.8%, while medium and heavy truck sales dropped by 2.4 and 5.8%.

“The industry also welcomed the country’s sustained improvement in major economic sectors, which remain an important factor toward economic and market conditions that are favorable for the industry and consumers alike,” Mr. Gutierrez said by the time of the report’s release.

“The steady year-on-year growth recorded in the first five months gives the industry a reason to be even more optimistic and grateful at the same time as attaining its growth forecast this year felt even closer to reality and proves rather possible,” he added.

In the first nine months, the top car manufacturers in the Philippines continued to remain strong and robust in terms of automotive sales. The leading manufacturer in this list, Toyota Motor Philippines Corp., sold out 144, 232 units, equivalent to a 45.81% market share. Second in ranking is Mitsubishi Motors Philippines Corp., selling out 58,065 units, resulting in a 65.2% sales increase. They were followed by Ford Motor Co., Phils with a 42.2% sales increase, selling out 23, 091 units, and Nissan Philippines, Inc. with 24.7% (20,037 units).

The total Q3 2023 vehicle sales results have put the industry right on track for recovery this year. Despite the slow growth of vehicle sales this month, from 248,154 units to 314,843 units were managed to be sold during the nine-month period.

With the new results of vehicle sales in the last month of Q3, CAMPI increased its 2023 sales target from 395,000 units to 423,000 units, which is 20% higher than the 2022 vehicle sales.

“The automotive market has remained resilient since 2021 and the current trend indicates that we will breach the highest pre-pandemic sales performance and achieve full industry recovery in 2023,” Mr. Gutierrez said.

“The auto industry is notably going strong despite the consumer spending slowdown attributed to the risks of inflation. In fact, the auto industry is sustaining its positive growth trend as sales of new motor vehicles recorded a continued year-on-year growth for the past 17 consecutive months since March 2022. The industry hopes to maintain this trend this year,” he added. — Angela Kiara S. Brillantes