Internet Penetration Sets the Path for Used Car Sales to Cross More Than 450,000 Units by the Year 2026: Ken Research

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The Philippines Used Car Market is Expected to Grow at A CAGR Of 7.6% In the Next Five Years in Terms of Used Car Units Sold by the Year 2026, as per findings released by Ken Research.

1. 75 Mn Active Social Media Users: Social Media Spurring Demand for Pre-Owned Cars in Unorganized Market.

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Among the country’s population of more than 105 million as of January 2020, there are almost 75 million internet and active social media users. This accounts for 67% of the total population. The online social media websites and chat windows in Philippines are the main growth driver of the unorganized sale of pre-owned vehicles in the country. The reason being that the vehicles can be listed on the personal web pages of the individual car seller which is 100% free of charge. On the other hand, they can approach a freelancer/ multi brand dealer having a Facebook page in the name of their dealership. These free lancers can also list the vehicle for a negligible price point on behalf of the Individual seller. The unorganized market is very big and has thousands of buyers and sellers who are willing to buy used cars due to price differentiation. The example of social media in the country are-Facebook, Car Finder and WhatsApp Chat.

2. The Market Share of Online Channel in Organized Market is Expected to Grow at a 5 Year 8.0% CAGR From More Than 80% Of the Market Share In 2021P to Nearly 91.5% by 2026.
Online sales channel is expected to grow with significant rate over the forecast period

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The online sales channel has gained traction owing to its wide reach and lower advertisement costs. Moreover, the organized players have realized that the first point of contact for the any used car buyer nowadays is the online classified pages, used car portals and other social media pages Technology advancements have changed consumer positions in the market, including the emergence of the internet, the usage of e-commerce sites and applications to increase company demand, and the introduction of hybrid and electric automobiles. Thanks to web technology, consumers are learning more about the car, its residual value, third-party profit margin, and other aspects.

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Philippines Used Car Market

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The Number of Used Car Sales Is All Set to Cross More Than 450,000 Units By The Year 2026: Ken Research

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The Philippines Used Car Market Is Expected to Grow at A CAGR Of 7.6% In the Next Five Years in Terms of Used Car Units Sold by the Year 2026, as per findings released by Ken Research.

Improved infrastructure, Train tax, and young population are listed as the key “pull” factors for the growth in the Philippines Used Car Market. This market is expected to witness a growth of 7.6% in next 5 years.

1. “Mega Manila Subway”: Government to Invest More Than 4 Bn Dollars in The First Subway Project.

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The Government of Philippines has been working towards improving the infrastructure of the country. President Duterte’s ‘Build! Build! Build!’ program is aimed at ushering the ‘Golden Age of Infrastructure’ in the Philippines. These initiatives will improve the road and the traffic conditions of the country making owning a car a more convenient option for the people of Philippines.

2. Philippines Number of Registered Vehicles was reported 5,000,000 Unit in Dec 2021: An Increase from the previous number of 4,000,000 Unit in Dec 2020.

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As of 2021, around 64.7% of the Filipino population is in the age bracket of 15 and 64 years old. This states that a huge chunk of the population consists of Millennials, who don’t have the financial stability to afford a new vehicle; hence they resort to the pre-owned units in order to meet their requirement of a dream car. In 2018, 25% of Filipino households in the Philippines owned a motorcycle or a tricycle. Furthermore, approximately 6% of households owned a car, jeep or van, while only 4% owned a motorized Banca or boat.

3. The Tax Reform for Acceleration and Inclusion (TRAIN) Law in Philippines, Proving to Be a Major Driving for Used Car Market to Reach around 460 thousand Units Sales by 2026.

Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law came into existence from 1st January, 2018. The reform in taxation got a merit for the used car industry of Philippines because the new vehicle units have become relatively expensive. Since all the new car buyers now would have to pay steep taxes, the buying behavior is switching from new cars to pre-owned cars which are available at much cheaper price and the buyer is not supposed to pay less tax or at times no tax on the purchase. This step was taken by the current government in power to reduce the vehicle traffic on roads and encourage people to use second-hand or pre-owned cars and reduce demand for imported cars.

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Philippines Used Car Market

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Philippines Used Car Market is expected to Gain Momentum due to the emergence of more Organized Players in the future along with Covid incited Surge in Demand: Ken Research

 1. The Used Car Market of Philippines is growing at a impressive growth rate and expected to grow more in the coming years.

The Philippines used car market is one of the growing markets within Southeast Asia and huge volumes are being traded each year. The market has registered a positive CAGR of ~7% during 2015-2020. One of the reasons behind this growth is the recent imposition of TRAIN taxes which has increased the cost of purchasing a brand-new imported car, thus driving the potential buyers towards the used car market. In the coming years, the used cars market is expected to expand in the Philippines because of the resilience shown by this industry. Also, during the pandemic a lot of organized players planned to enter the market, and Filipinos are realizing the advantages of buying a pre-owned car, this will drive the growth of the market more in the coming years.

2. Unorganized segment dominates the Used Car Market in Philippines with the highest market share.

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Within the used cars market, there are two broad segmentations, namely- the organized segment and the unorganized segment. The unorganized market dominates the overall market with a whopping ~56% share. These freelancers and individual sellers sell very low volume of vehicles individually, however, the number of these freelancers and consumers is very high in the economy and therefore in totality, they sell more cars compared to organized market players.

The organized segment on the other hand consists of sales of used cars taking place from businesses to customers.  These used car dealers are well established with at least 2 outlets and more than 50 units in the inventory at a point of time. The banks selling repossessed cars and DDSA entities selling pre-owned (both certified and non-certified cars) belong to the organized segment. This segment only constitutes ~44% of the overall market share.

3. Online mediums lead in the organized segment of the used Car Market in Philippines with the highest market share.

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In Philippines, the Used Car market has carved a niche in the online space. Around 85% of the lead generation for used cars in the organized segment happened via the online platforms. The Direct Dealership Sales Agents (DDSAs) (OEMs) have their own websites, and pages on social media, whereas several multi-brand dealers prefer listing their inventory on the classified platforms as well. Facebook is gaining traction as an online space for buying and selling used cars in the Philippines. On the other hand, dealership walk-ins accounts only ~15% of the lead generation. Also, the lead generation by dealership walk-ins is consistently falling as the used cars market is expanding in the online space.

How Is The Philippines Used Car Market Positioned: Ken Research

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Overview: The Used car market in Philippines is quite fragmented amongst the unorganized players in the industry. There has been a surge in the demand for private vehicles given the social distancing protocols being imposed in the Philippines making it quite risky to use public transport. Factors such as increasing purchasing power, easy availability of finance, and increased prices of new cars due to Government imposed higher taxes have positively contributed to the growth in the used car market revenue. Increased digitalization and internet penetration and the emergence of online players are critical factors in boosting used cars sales as they have made the overall process of selling and buying used cars quite convenient and prompt.

The buying decision of the customers is dependent on key parameters such as the price, model, brand value, age, mileage, and so on. The Philippines automotive market is primarily driven by foreign brands.

Market: Market for used car in Philippines has increased at a CAGR of ~% over the period 2015-2020 on the basis of revenue. Sales for used cars were recorded at ~units in Philippines during 2020. There has been a surge in the demand for quality cars, warranty packages, after-sale services, and other value-added services, as several new car potential buyers are gradually moving towards the segment of the used car. Yet, the freelancers and the independent sellers (Customer to Customer) transactions still constitute a lion’s share in the market due to their lower prices.

The used cars market showed resilience during the economic crisis brought down on the country by the pandemic in the year 2020. While the new cars market witnessed a tremendous decline, the used cars market experienced a very slight decline from the previous year in terms of sales. Most of the used car market losses were compensated for once the Enhanced Community Quarantine (ECQ) measures were eased and people were required to travel from one place to another while maintaining social distance. Since travelling public transport implied violation of these protocols and risk to health, a lot of people started buying used cars.

Philippines Used Car Market Segmentation

By Sales channel:  Most of the market is dominated by the multi-brand dealerships in the organized B2C segment.  OEMs (DDSs) and banks constitute a very small share of the organized used car market in Philippines.

By Source of lead generation:

In Philippines, online platform is the most preferred method for lead generation for organized players. It also offers a display of large variety of used vehicles on a single click and allows person to compare different vehicles at the same time.

By Price: The price range of PHP 300k-500k accounted for highest percentage share of used cars in Philippines in 2020.  Sedans are the most popular car models preferred in Philippines, and a vast majority of them lie in this price range.

By Brand: Toyota has the highest share in the used cars market. Other Japanese brands such as Mitsubishi, Hyundai, Nissan, etc., have captured a very high proportion of the total market.

By Kilometers Driven: Since the average age of a used car in the Philippines is ~5 years and the average mileage of a used car happens to be approximately 50,000 kilometers. Therefore, cars with a mileage of 40,000-60,000 kilometers dominate the used cars market in Philippines in the year 2020.

By Region: Metro Manila holds the highest market share for used cars. The NCR region has cities such as Quezon City, Manila, Paranaque, and so on which are highly developed and crowded as compared to the rest of the cities in the Philippines. The deteriorating public transport in these major cities was one of the factors contributing to increased sales of used cars in the Philippines. With the onset of the pandemic, the need for personal cars increased manifold.

Snapshot On Online Used Car Landscape

The online Used Car Market has been gaining traction in the last few years. There has been an immense expansion in the lead generation of used cars via the online means in the last decade. Facebook plays a key role in expanding the used cars market in Philippines. Emergence of online auto-portals and classified platforms such as Carousell, Carmudi, AutoDeal, Philkotse, Automart, etc., have provided increased visibility and credibility to the customer-to-customer transactions in the unorganized segment. The increasing internet penetration of the used cars market in the country is contributing positively to the growth of the industry.

Competition Scenario In Philippines Used Car Market

The competition scenario in Philippines is quite intense as there is no big player in the market holding a significant share. The OEMs capture a very small market share in the organized market segment. The largest share of the market is held by the multi-brand dealers selling. The organized multi-brand dealerships segment is also quite fragmented as there is no established multi-brand dealer capturing a significant proportion of the share. The multi-brand dealers do not consider the OEMs (DDSAs) as a threat given their extremely small market share owing to high prices, and less supply (as most of the OEM’s procure their inventory from trade-ins). However, Toyota Certified has already started carving a niche in the used cars segment and instigated most multi-brand dealers to start providing value added services. While the banks also fall under the B2C organized segment, they do not exhibit any competitive characteristics as their sole purpose of auctioning the repossessed cars is to recover the losses incurred due to the delinquency of the borrowers. In order to compete with OEM certified cars, certain multi-brand dealers have started providing value added services in order to retain and expand their market share. However, the segment remains quite unexploited as not many dealers are currently providing any value-added services.

Philippines Used Car Market Future Outlook And Projections

The used car industry in Philippines is expected to demonstrate a decent growth in the future. It is expected to increase at a five-year CAGR of ~% from 2020 to 2025E in terms of value (in PHP Billion). It is expected that the share of the organized segment in the used cars space will increase over time as more brands are planning to enter the OEM pre-owned certified space. Certain foreign established C2B players are too considering Philippines Used Car market a growing and profitable venture. Moreover, people in Philippines are realizing the advantages of buying a pre-owned car and there has been a shift in the general consumer preferences. The onset of the pandemic has found a new demographic target for the used cars segment, that is, the people who travel via public transport. It is expected that the demand for used cars will increase over time as still this particular target segment’s demands are not saturated.

Key Segments Covered: -

By Market Structure

Organized

Unorganized

By Sales Channel

Multi-brand Dealers

Direct Dealership Sales Agents

Bank Auctions

C2C (Customer to Customer) Transactions

By Source of Lead generation

Online

Dealership walk-ins

By Car Segment

Sedan

Hatchback

SUV

MPV

Pickup Vans

Others (convertibles, coupe, crossover, sports vehicles, and many more)

By Price

Less than PHP 100,000

PHP 100,000-300,000

PHP 300,000-500,000

PHP 500,000-700,000

PHP 700,000-1,000,000

More than PHP 1,000,000

By Brand

Toyota

Mitsubishi

Hyundai

Ford

Nissan

Honda

Isuzu

Suzuki

Others (Kia, Mazda, Mercedes, Audi, and many more)

By Region

Metro Manila

Northern Luzon

Southern Luzon (except Metro Manila)

Visayas

Mindanao

By Ownership period

Less than 2 years

2-4 years

4-6 years

6-8 years

More than 8 years

By Mileage

Less than 10,000 Kms

10,000-20,000 Kms

20,000-50,000 Kms

50,000-75,000 Kms

75,000-100,000 Kms

Above 100,000 Kms

By Fuel

Petrol

Diesel

Others (Hybrid and Electric)

Companies Covered

OEM Dealerships

Toyota Certified

Nissan Intelligent Choice

BMW Premium Selection

Mercedes Benz Certified Pre-owned

Banks (Repossessed Car Auctions)

EastWest Bank

Security Bank

BDO Unibank

Online Portals – Online Auto Classified Platforms

Carmudi

Carousell

AutoDeal

Automart

Zigwheels

Philkotse

Multi-Brand Dealers

Carmax

Carmix (by Lausgroup)

Automobilico

All Cars

Five Aces

Berylle Car Sales

Time Period Captured in the Report: -

Historical Period – 2015-2020

Forecast Period – 2021-2025

Key Topics Covered in the Report

Philippines Used Car Market Overview

Philippines Used Car Market Size, 2015-2020

Philippines Used Car Market Segmentation, 2020

Growth Drivers in Philippines Used Car Market

Issues and Challenges in Philippines Used Car Market

Government Regulations

Ecosystem and Value Chain of Used Car Industry in Philippines

Customers Purchase Decision Making Parameters

Cross Comparison between Major OEMs and Multi-brand Dealers and Company Profiles & Product Portfolios

Snapshot on Online used car market

Future Market Size and Segmentations, 2020-2025E

Covid-19 Impact on the Industry & the way forward

Pricing Analysis (By Age, Mileage, Brand and Car type)

Depreciation Calculation Tool

Analyst Recommendations

For More Information on the research report, refer to below link: -

Philippines Used Car Market Future Growth

Related Reports by Ken Research: -

Indonesia Used Car Market Outlook To 2025 – By Market Structure (Organized & Unorganized), By Type Of Car (MPVs, Hatchbacks, SUVs & Others), By Brand (Toyota, Honda, Daihatsu, Suzuki & Others), By Vehicle Age, By Mileage, By Customer Age And By Region (DKI Jakarta, East Java, West & Central Java, North Sumatera & Others)”

Saudi Arabia Used Car Market Outlook To 2025- By Market Structure (Organized & Unorganized), By Type Of Car (Sedans & Hatchbacks, SUVs & Crossovers, Pick-Ups And Luxury), By Brand (Toyota, Hyundai, GMC & Chevrolet, Ford And Others), By Type Of Sourcing, By Age Of Vehicle (Less Than 1 Year, 1-3 Years, 3-5 Years & More Than 5 Years), By Kilometers Driven (Less Than 50,000 Km, 50,000-80,000 Km, 80,000-120,000 Km & More Than 120,000 Km) And By Region (Northern, Southern, Central, Eastern And Western)”

Philippines Auto Finance Market Outlook To 2024- Growing Prominence Of Captive Finance And Surge In Used Car Sales Supporting Disbursement For Auto Loans”

Contact Us: -
Ken Research
Ankur Gupta, Head Marketing & Communications
Support@kenresearch.com
+91-9015378249

Philippines Used Car Market Outlook To 2025: Ken Research

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The report titled “Philippines Used Car Market Outlook To 2025: The Pandemic Incited Increased Demand for Used Cars coupled with Increased Internet Penetration provides for Resilience in the Used Cars Market during the Economic Crisis”- provides a comprehensive analysis of the used car market trends and performance in the Philippines. The report covers several aspects such as volume of used cars sold & market size in terms of gross transaction value, target audience, growth facilitators, Government regulations, constraints & challenges faced by the industry, and so on. The report also covers a snapshot of the Philippines online used car market, business models, value chain analysis, SWOT analysis, buying decision parameters, competitive scenario, and company profiles. Philippines Used Car Industry report concludes with projections for the future of the industry market size, market segmentation, the impact of Covid-19, and analyst take on the future market scenario.

Philippines Used Car Market Overview and Size:

Philippines Used Car market is in its growth phase, having grown at a CAGR of 7.4% (by value in PHP Billion) during 2015-2020. A surge in the demand of private cars, coupled with convenient financing facilities, increasing per capita income, increased internet penetration and enhanced digitalization of the used car's space have been the salient factors leading to the growth of the used cars market in the Philippines.

Philippines Used Car Market Segmentations

By Market Structure (Unorganized, and Organized): The used car market in Philippines is primarily dominated by the unorganized segment occupying ~55% of the overall used cars market space. Most of the organized players operate in the Metro Manila region.

By Sales channel (B2C- Multi-brand Dealers, DDSAs, and Bank Repossessed Car Auctions): The used cars in the organized B2C market of Philippines are primarily sold via three channels- multi-brand dealers, Direct Dealership ales Agents, and Banks’s auctioning repossessed cars. The major share of the Philippines Used Car organized market is captured by the Multi-Brand dealers. On the other hand, volume of cars sold through Bank Repossessed and Direct Dealership Sales Agents is ~10% in the year 2020.

By Source of Lead generation (Online, Dealership walk-ins): In Philippines, the Used Car market has carved a niche in the online space. More than 4/5ths of the lead generation for used cars in the organized segment happened via the online platforms. The DDSAs (OEMs) have their own websites, and pages on social media, whereas several multi-brand dealers prefer listing their inventory on the classified platforms as well. Facebook is gaining traction as an online space for buying and selling used cars in the Philippines.

By Type of Car:  Sedans and SUVs are quite popular in the Philippines. Since the terrain of the country is generally rugged (especially in the Northern Luzon area), the demand for light commercial vehicles such as SUVs and MPVs is quite high. Pickup trucks are also a popular light commercial vehicle type preferred in Philippines.

By Price: The price range of PHP 300k to 500k accounted for the highest percentage share of used cars sold in Philippines in 2020.  Sedans are a widely demanded car type in the country and generally the Sedan used cars fall in this particular price range.

By Brand: Toyota is the market leader in Philippine’s accounting for the major share of sale of used cars by volume. Japanese brands such as Toyota, Honda, Nissan, Mitsubishi, and others, are the most preferred due to strong brand preference, reliability, longer life span, and higher retention value of the used vehicle.

By Region: Most of the used car’s market is concentrated in the NCR (Metro Manila) region. Since, it is the most economically developed region in the Philippines, the average age of replacement of cars is quite low, leading to more used cars availability in the area.

By Ownership Period: Generally, any new car in Philippines is owned for 4-6 years before it sold off. Therefore, the average age of used cars in the country also lies within the same bracket.

By Kilometers Driven: Since the average age of a used car in the Philippines is ~5 years and the average mileage of a used car happens to be approximately 50,000 kilometers. Therefore, cars with a mileage of 40,000-60,000 kilometers dominate the used cars market in Philippines in the year 2020.

By Fuel: Gasoline and diesel are the majorly preferred types of fuel in the country. The adoption of electric vehicles is at a very nascent stage accounting less than 1% share in the overall Philippines used car market currently.

Snapshot on Online Used Car Landscape

The online Used Car Market has been gaining traction in the last few years. There has been an immense expansion in the lead generation of used cars via the online means in the last decade. Facebook plays a key role in expanding the used cars market in Philippines. Emergence of online auto-portals and classified platforms such as Carousell, Carmudi, AutoDeal, Philkotse, Automart, etc., have provided increased visibility and credibility to the customer-to-customer transactions in the unorganized segment. The increasing internet penetration of the used cars market in the country is contributing positively to the growth of the industry.

Competitive Landscape of Philippines Used Car Market

There exists intense competition in the highly fragmented market with various OEM certified, brand authorized dealerships, multi-brand outlets & independent (standalone as well as clustered dealers) operating in the industry. While the banks also fall under the B2C organized segment, they do not exhibit any competitive characteristics as their sole purpose of auctioning the repossessed cars is to recover the losses incurred due to the delinquency of the borrowers. In order to compete with OEM certified cars, certain multi-brand dealers have started providing value added services in order to retain and expand their market share. However, the segment remains quite unexploited as not many dealers are currently providing any value-added services.

Philippines Used Car Future Outlook & Projections

The used car industry in Philippines is expected to demonstrate a decent growth in the future. It is expected to increase at a five-year CAGR of 8.9% (by value in PHP Billion) from 2020 to 2025E. It is expected that the share of the organized segment in the used cars space will increase over time as more brands are planning to enter the OEM pre-owned certified space. Certain foreign established C2B players are too considering Philippines Used Car market a growing and profitable venture. Moreover, people in Philippines are realizing the advantages of buying a pre-owned car and there has been a shift in the general consumer preferences.

Key Segments Covered: -

By Market Structure

Organized

Unorganized

By Sales Channel

Multi-brand Dealers

Direct Dealership Sales Agents

Bank Auctions

C2C (Customer to Customer) Transactions

By Source of Lead generation

Online

Dealership walk-ins

By Car Segment

Sedan

Hatchback

SUV

MPV

Pickup Vans

Others (convertibles, coupe, crossover, sports vehicles, and many more)

By Price

Less than PHP 100,000

PHP 100,000-300,000

PHP 300,000-500,000

PHP 500,000-700,000

PHP 700,000-1,000,000

More than PHP 1,000,000

By Brand

Toyota

Mitsubishi

Hyundai

Ford

Nissan

Honda

Isuzu

Suzuki

Others (Kia, Mazda, Mercedes, Audi, and many more)

By Region

Metro Manila

Northern Luzon

Southern Luzon (except Metro Manila)

Visayas

Mindanao

By Ownership period

Less than 2 years

2-4 years

4-6 years

6-8 years

More than 8 years

By Mileage

Less than 10,000 Kms

10,000-20,000 Kms

20,000-50,000 Kms

50,000-75,000 Kms

75,000-100,000 Kms

Above 100,000 Kms

By Fuel

Petrol

Diesel

Others (Hybrid and Electric)

Companies Covered

OEM Dealerships

Toyota Certified

Nissan Intelligent Choice

BMW Premium Selection

Mercedes Benz Certified Pre-owned

Banks (Repossessed Car Auctions)

EastWest Bank

Security Bank

BDO Unibank

Online Portals – Online Auto Classified Platforms

Carmudi

Carousell

AutoDeal

Automart

Zigwheels

Philkotse

Multi-Brand Dealers

Carmax

Carmix (by Lausgroup)

Automobilico

All Cars

Five Aces

Berylle Car Sales

Time Period Captured in the Report: -

Historical Period – 2015-2020

Forecast Period – 2021-2025

Key Topics Covered in the Report

Philippines Used Car Market Overview

Philippines Used Car Market Size, 2015-2020

Philippines Used Car Market Segmentation, 2020

Growth Drivers in Philippines Used Car Market

Issues and Challenges in Philippines Used Car Market

Government Regulations

Ecosystem and Value Chain of Used Car Industry in Philippines

Customers Purchase Decision Making Parameters

Cross Comparison between Major OEMs and Multi-brand Dealers and Company Profiles & Product Portfolios

Snapshot on Online used car market

Future Market Size and Segmentations, 2020-2025E

Covid-19 Impact on the Industry & the way forward

Pricing Analysis (By Age, Mileage, Brand and Car type)

Depreciation Calculation Tool

Analyst Recommendations

For More Information on the research report, refer to below link: -

Philippines Used Car Market Future Growth

Related Reports by Ken Research: -

Indonesia Used Car Market Outlook To 2025 – By Market Structure (Organized & Unorganized), By Type Of Car (MPVs, Hatchbacks, SUVs & Others), By Brand (Toyota, Honda, Daihatsu, Suzuki & Others), By Vehicle Age, By Mileage, By Customer Age And By Region (DKI Jakarta, East Java, West & Central Java, North Sumatera & Others)”

Saudi Arabia Used Car Market Outlook To 2025- By Market Structure (Organized & Unorganized), By Type Of Car (Sedans & Hatchbacks, SUVs & Crossovers, Pick-Ups And Luxury), By Brand (Toyota, Hyundai, GMC & Chevrolet, Ford And Others), By Type Of Sourcing, By Age Of Vehicle (Less Than 1 Year, 1-3 Years, 3-5 Years & More Than 5 Years), By Kilometers Driven (Less Than 50,000 Km, 50,000-80,000 Km, 80,000-120,000 Km & More Than 120,000 Km) And By Region (Northern, Southern, Central, Eastern And Western)”

Philippines Auto Finance Market Outlook To 2024- Growing Prominence Of Captive Finance And Surge In Used Car Sales Supporting Disbursement For Auto Loans”

Contact Us: -
Ken Research
Ankur Gupta, Head Marketing & Communications
Support@kenresearch.com
+91-9015378249

Philippines Used Car Market Research Report: Ken Research

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What Is The Current Potential Of Philippines Pre-Owned Car Market?

Philippines used car market is currently at its growth stage with a growing appetite for certified and non-certified passenger cars. The used car market in terms of volume sales has increased to ~units in 2018 from ~ units in 2014 registering a CAGR of ~% over the review period 2014-2018. The market is largely fragmented with the presence of multi-brand dealers and large a number of individual sellers. Within the organized market, Direct Dealership Sales Agents (DDSA) and repossessed car sellers have a fairly concentrated market with only a few players supplying used cars in the market. The pre-owned vehicle buyers in Philippines have shown higher interest in certified cars over non-certified cars due to better quality of refurbishment and replacement services of faulty parts with original parts, better after-sales services, and complete car inspection to compute the roadworthiness, extended warranty & other documentation and finance services.

The used car market of Philippines by the value of the transaction has increased from PHP ~ billion in 2014 to PHP ~ billion in 2018. There are various reasons for the surge in market size by value of the transaction and one of the most significant reasons is the surging average ticket size of used cars in the Philippines. The market share of the organized market has surged from ~% in 2014 to ~% in 2018. It has been observed that more and more OEM dealers are integrating certification infrastructure to attract more used car buyers. It has also been observed that in the last 5 years, the value of non-performing auto loans has surged significantly resulting in more foreclosures and auctions of repossessed cars by banks. The online channel has served as a platform for both organized and unorganized pre-owned car players to connect and conclude sales.

Industry Value Chain in Philippines Used Car Market

The Philippines used car market comprises of organized and unorganized market players.  The unorganized market comprises of individual sellers and freelancers who supply the major volumes of used cars to the market. The new cars purchased by individuals in the Philippines generally convert into used cars within a span of 3-5 years. Later, these units are either sold to friends and family via word of mouth or are sold to multi-brand dealers via listing on online classifieds. If the vehicle is in good condition, the seller can sell the unit to DDSA also. Within the organized market, multi-brand dealers of used cars supply the highest volume of used cars in the market.     The multi-brand dealers procure the used cars from either individual sellers, DDSA and from bank auctions of repossessed cars. In the case of DDSA, the cars are mostly procured via trade-ins, i.e., when the seller wishes to upgrade the vehicle to a new model of the same brand through an exchange program. The share of DDSA is expected to surge to ~% by 2023. The banks procure repossessed cars from vehicle buyers, who default on their auto loan. In this case, the bank confiscates the used cars and auctions it to the general public through tenders/auctions. Banks auction vehicles to players in both organized and unorganized market. Online platforms have provided the used car market players a convenient way to list vehicles and increase their reach to the target audience. Classified pages, online auto portals and social media handles such as Facebook have become the foundation of the online used car market in the Philippines.

Major Segmentations in Philippines Used Car Market

By Type of Market: The market is segmented in terms of organized market and unorganized market. In the Philippines, the organized market has a low market share compared to the unorganized market. The organized market consists of repossessed car dealers; DDSA’s and multi-brand used car dealers. On the other hand, the unorganized market consists of freelancers and individuals used car buyers and sellers.

By Average Replacement Period: The average replacement period segmentation deciphers the average time the vehicle the owner uses its asset and then sells it in the open market. It has been observed that on average, the vehicle owner retains the fleet for at least 3-5 years.

Major Segmentations In Philippines Used Car Market

By Type of Sales Channel: Within the organized market, the sales channel is either a direct dealership walk-in or a lead generated by the online portals for the organized players to increase the sale probability. In the case of the online channel, the eventual sale of the unit takes place from a physical location only.

The unorganized market players also take advantage of listing their fleet of the vehicle on classified portals and social media to increase the outreach. The other channel is direct dealer sellout, wherein the individual seller disposes of the used car for a fair market price to either the multi-brand dealer or DDSA. Unorganized players also depend on word of mouth as a sales channel, wherein the individual consumer sells the vehicle to a known individual within friends or family.

Competitive Landscape in Philippines Used Car Market

Competition within the Philippines used the car market was witnessed to be fragmented in nature with the unorganized market capturing the majority of the market share. Most of the used car sellers in the Philippines belong to the unorganized market constituting of free-lancers and individual sellers. The unorganized players in the market are highly dependent on the online channel and are relatively lesser dependent on word of mouth channels. The unorganized market in the Philippines has a ~% market share in terms of sales volume in 2018. In terms of the vehicle brand type, the market is concentrated with 5 major brands accounting for ~% of the market share in the Philippines used car market. The major five brands are Toyota, Honda, Nissan, Hyundai, and Mitsubishi. Within the organized market, the competition within volumes supplied by the DDSA is fairly concentrated with the presence of 30-40 players. The Direct Dealership Sales Agents (DDSA) market segment has 5 major players holding ~% of the market share and are supplying both certified and non-certified used cars in the market. In the Philippines, the auto loan default rate is on surge due to higher inflation. This has resulted in banks auctioning the forfeited units to multi-brand dealers and others. The market is moderately fragmented with no bank having a share of more than ~% in terms of volume of repossessed cars auctioned in the market in 2018.

Key Segments Covered:-

Philippines Used Car Market Overview and Size

By Type of Market Structure

Organized Market

Unorganized Market

By Type of Sales Origin (Organised Market)

Direct Dealership Sales Agent

Repossessed Units Sold By Banks

Multi Brand Dealers

By Type of Sales Channel (Organised Market)

Online Platforms

Dealership Walk-ins

By Average Ticket Size of Used Vehicle

By Average Vehicle Replacement Period

By Type of Vehicle Manufacturer/Brand

Japanese Brands

German Brands

American Brands

Korean Brands

Other European Brands

British Brands

Others

Key Target Audience:-

Potential Direct Dealership Sales Agents

Existing Multi-Brand Dealerships

Banks & Subsidiaries

Captive Finance Companies

Non-Banking Financial Institutions

Cab Aggregators and Car Rental Companies

Government Organizations

Online Auto Portals

Classified Pages

Investors and VC Firms

Industry Associations

Time Period Captured in the Report:-

Financial Year 2014-2018: Historical Period

Financial Year 2019-2023: Future Forecast

Companies Cited in the Report:-

Brand

Toyota

Nissan

Hyundai

Honda

Mitsubishi

Ford

DDSA

Toyota Certified

Honda Philippines

Nissan Intelligent Choice

Hyundai Philippines

Mitsubishi Certified

Banks

BDO

PS Bank

BPI

East West Bank

China Bank

RCBC

May Bank

Sterling Bank

Security Bank

Classified Pages/ Online Auto Portal

Phil Kotse.com

OLX

Auto Deal.com

CarMudi Philippines

Key Topics Covered in the Report:-

Used car Sales Market Philippines

Philippines Used Car Market

Used Car Market in Philippines

Repossessed Cars for Sale Philippines

2nd hand Cars for Sale Philippines

Pre-owned car sales Philippines

Philippines Used Car Industry

Used Car Industry Philippines

Used Car Industry in Philippines

Used Car Services Market in Philippines

Market of Philippines Used Car

Pre-owned vehicle buyers in Philippines

Used car market of the Philippines

For More Information On The Research Report, Refer To Below Link:-

Philippines Used Car Industry

Related Reports by Ken Research:-

Indonesia Used Car Market Outlook to 2023 - Rising Popularity of Online Platforms and Reduction in Average Ownership Period to Drive Used Car Sales

UAE Used Car and Auto Classified Market Outlook to 2022 - By Revenue Streams (Commission, Paid Listings, Banner Advertisement), By Export and Domestic Sales

Russia Used Car Market Outlook to 2022 - by Type of Car (Sedans, Crossovers and SUVs, Hatchbacks and Others include Micro Vans and MPVs) by Car Age, by Distribution Channels (Dealers and Online)

Contact Us:-
Ken Research
Ankur Gupta, Head Marketing & Communications
Ankur@kenresearch.com

+91-9015378249

Philippines Used Car Market is Driven by Growing Online Auto Portals, Increase in Taxes for New Vehicles and Emergence of Certified Pre-Owned Cars: Ken Research

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Philippines Used Car Market: - “The key factors driving growth in the Philippines used car market is digitalization via online auto portals, classified pages, and social media advertisements. The banks repossessed car auctions, certified cars supplied by Direct Dealership Sales Agents (DDSA) and refurbished cars sold by multi-brand dealers have also significantly contributed to the growth of the Philippines used car market”.

The report titled “Philippines Used Car Market Outlook to 2023- by Market Structure (Organized and Unorganized Market), by Origin of Sale (Direct Dealership Sales Agent, Repossessed Units Sold By Banks and Multi-Brand Dealers), By Sales Channel (Online and Dealership Walk-ins), by Average Vehicle Replacement Period and by Major Car Manufacturer Brands” Ken Research suggests a four-year CAGR of close to 8.0% on the basis of used car sales volume for the time period 2014-2018.

Market Overview: Philippines used car market has been identified at a growth stage with a growing appetite for certified pre-owned cars sold by Direct Dealership Sales Agents (DDSA).The used car volumes in the Philippines have been growing at a four-year CAGR of 8.0% between 2014- 2018. The overall competition stage of the market is fragmented in nature with the unorganized market dominating the market in terms of used car sales volumes. In the organized market, the market is fairly concentrated as the DDSA and Repossessed cars auctioned by the banks are limited in number, however, the multi-brand dealers in the country are bit fragmented.

Value Added Services: The organized players in the market consisting of DDSA, repossessed car auctioneers and multi-brand dealers have started providing certification on the vehicle because of which the repairs or any manufacturing faults can be handled at the service center free of charge due to which the consumer is all the more motivated to buy a certified/ approved used vehicles nowadays. The registration certification, hypothecation, and other documentation is generally taken care of by the organized players.  The above reasons have lured more and more customers to buy used cars and will continue to do the same in the future.

Government Regulations: The Philippines government’s goal is to attain a 70:30 CKD to CBU market split by 2022, achieving a 150% increase in nationwide capacity, and full utilization by that date. As of 2014, the ratio of CKD to CBU vehicles stood at 32:68 in the country. The current administration also implemented a landmark tax reform law in late 2017, called the Tax Reform for Acceleration and Inclusion, or TRAIN law, which imposed additional excise taxes on a number of goods, including automobiles, beginning in 2018. Prior rates of 2% to 60% have changed to between 4% and 50%, which severely affected the pricing on the most affordable and most bought models, which might have acted as a favorable factor for the used car market in the country.

Key Segments Covered:-

Philippines Used Car Market Overview and Size

By Type of Market Structure

Organized Market

Unorganized Market

By Type of Sales Origin (Organised Market)

Direct Dealership Sales Agent

Repossessed Units Sold By Banks

Multi Brand Dealers

By Type of Sales Channel (Organised Market)

Online Platforms

Dealership Walk-ins

By Average Ticket Size of Used Vehicle

By Average Vehicle Replacement Period

By Type of Vehicle Manufacturer/Brand

Japanese Brands

German Brands

American Brands

Korean Brands

Other European Brands

British Brands

Others

Key Target Audience:-

Potential Direct Dealership Sales Agents

Existing Multi-Brand Dealerships

Banks & Subsidiaries

Captive Finance Companies

Non-Banking Financial Institutions

Cab Aggregators and Car Rental Companies

Government Organizations

Online Auto Portals

Classified Pages

Investors and VC Firms

Industry Associations

Time Period Captured in the Report:-

Financial Year 2014-2018: Historical Period

Financial Year 2019-2023: Future Forecast

Companies Cited in the Report:-

Brand

Toyota

Nissan

Hyundai

Honda

Mitsubishi

Ford

DDSA

Toyota Certified

Honda Philippines

Nissan Intelligent Choice

Hyundai Philippines

Mitsubishi Certified

Banks

BDO

PS Bank

BPI

East-West Bank

China Bank

RCBC

May Bank

Sterling Bank

Security Bank

Classified Pages/ Online Auto Portal

Phil Kotse.com

OLX

Auto Deal.com

CarMudi Philippines

Key Topics Covered in the Report:-

Philippines Online Used Car Financing Market

Philippines Used Car Market

Philippines Used Cars Market Future Outlook

Philippines Car Industry

Philippines Car Market

Philippines Automotive Aftermarket Industry

Philippines Car Dealer Market

Used Car Sales Market Philippines

Philippines Repossessed Units Sold By Banks

2nd hand Cars for Sale Philippines

Demand for Old Cars in Philippines

Car Auction Market Philippines

Used Car Listing in Philippines

Online Marketplace Used Cars Philippines

Online Used Cars Market Philippines

For More Information On The Research Report, Refer To Below Link:-

Philippines Used Car Industry

Related Reports by Ken Research:-

Indonesia Used Car Market Outlook to 2023 - Rising Popularity of Online Platforms and Reduction in Average Ownership Period to Drive Used Car Sales

UAE Used Car and Auto Classified Market Outlook to 2022 - By Revenue Streams (Commission, Paid Listings, Banner Advertisement), By Export and Domestic Sales

Russia Used Car Market Outlook to 2022 - by Type of Car (Sedans, Crossovers and SUVs, Hatchbacks and Others include Micro Vans and MPVs) by Car Age, by Distribution Channels (Dealers and Online)

Contact Us:-
Ken Research
Ankur Gupta, Head Marketing & Communications
Sales@kenresearch.com
+91-9015378249