FREE Market Commentary: Car Sales Decline by 15% in Jan 2019

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Market Issue or Event

Car sales in the Philippines showed a 15% decline to 27k units in January 2019. CAMPI did not detail the cause behind the skid, but industry players have previously attributed this to the higher excise tax rates on cars, and overall drop in spending for durable goods following the high inflation episode last year.

 

Our Partner Broker’s View and Commentary

With Toyota Motors PH (TMP) market share at 42.2%, car sales volume dropped by 14% to 11.6k units. Note that in Jan. 2018, TMP’s volume already dropped by 9%; thus, Jan. 2019 figures should have been helped by a low-base effect. However, this is not the case.

The double-digit drop in Jan. 2019 figures underscores that TMP is not out of the woods just yet. TMP officials also cautioned during the launch of their new Hi-ace model that sales recovery this year (+5% growth) is expected to happen sometime in 2H19 as consumers continue to adjust.

Overall, this will likely stall any potential rally for GTCAP (Target Price: PHP 1,114.00) as investors may wait for more tangible signs of a recovery, but we would look to buy on dips in anticipation of a bounce in TMP’s sales towards the second half.

 

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AP Securities (formerly Angping & Associates Securities)
AP Securities (formerly Angping & Associates Securities)

AP Securities (formerly Angping & Associates Securities) is one of PinoyInvestor’s partners in delivering superior and reliable stock research reports that help Filipino investors make smart stock investing decisions! Learn more about them here.