Global Market Research Reports : Ken Research: Philippines Used Car Market Industry Analysis & Size

How is the Philippines Used Car Market Positioned?

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 the 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 emergence of online players are critical factors in boosting the 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. Philippines’ automotive market is primarily driven by foreign brands.

Market: ‘Market for used car in Philippines’ has expanded by a CAGR of ~% over the period 2016-2021P on the basis of revenue. Sales for used cars were recorded at ~units in Philippines during 2021P.

There has been a surge in the demand for quality cars, warranty packages, after-sale services, and other value added services, as several the new car potential buyers are gradually moving towards the used cars segment.

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 2021P. 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 Region: Metro Manila holds the highest market share for used cars. The NCR region has cities such as the Quezon City, Manila, Paranaque, and so on which are highly developed and crowded as compared to the rest of the cities in 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

Most Filipinos prefer buying the used car from a dealer. However, with increasing internet penetration, the online sale for used car has been gaining traction in the last few years. 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 facilitated the sale of used cars. However, there is no organized platform for direct B2C & C2C online offering for used car sales currently. Prominent C2B car players such as Carsome are planning to enter the Philippines in the near future.

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Competitive Landscape of Philippines Used Car Market

Used Car Market in Philippines is highly fragmented as majority of the market is unorganized. 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. The repossessed car market in Philippines is fairly concentrated, as major banks involved in auctions are only 8-10. Used car dealers in Philippines compete on the basis of number of dealership outlets; value added services, quality checks performed, insurance and finances and portfolio of used cars at their dealership store.

Philippines Used Car Market Future Outlook and Projections

The used car industry in Philippines is expected to grow in the future at a single digit CAGR over the forecast period (2021P to 2026F). The market structure is expected to be consolidated in the future as the market share of players selling vehicles via organized channel is expected to surge. The average ticket size of a used vehicle is expected to increase as the average replacement period is reducing over time. The customers will tend to switch to used cars and new cars at a rate faster than before, depicting rapid change in consumer preferences. The multi-brand dealers and banks are strategically partnering with online classified pages and online auto portals to make the process accessible and transparent for the buyers. . The customers in the future will make well informed decision as lot of information will made available regarding car pricing at their disposal in the future across various platforms. Certain foreign established C2B players are too considering Philippines Used Car market a growing and profitable venture.

Key Segments Covered

By Market Structure
Organized
Unorganized

By Sales Channel (Organized Segment)
Multi-brand Dealers
Direct Dealership Sales Agents
Bank Repossessed Cars
By Source of Lead generation (Organized Segment)
Online
Dealership walk-ins

By Average Ticket Size
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 Region
Metro Manila
Northern Luzon
Southern Luzon (except Metro Manila)
Visayas
Mindanao

By Type of Vehicle
Sedan
SUV
Hatchback
Pickup Vans
MPV
Others (convertibles, coupe, crossover, sports vehicles, etc.)

By Fuel
Gasoline
Diesel
Others (Hybrid and Electric)

By Type of Vehicle Manufacturer
Japanese
Korean
American
Chinese
German
British
Others
By Brand
Toyota
Mitsubishi
Hyundai
Ford
Nissan
Honda
Isuzu
Suzuki
Others (Kia, Mazda, Mercedes, Audi, etc.)

By Average Replacement 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

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 – 2016-2021P
Forecast Period – 2021P-2026F

Key Topics Covered in the Report

Executive Summary
Research Methodology
Philippines Used Car Market Overview
Philippines Used Car Market Size, 2016-2021P
Philippines Used Car Market Segmentation, 2021P
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
Philippines Ancillary Services Market
Future Market Size and Segmentations, 2021P-2026F
Covid-19 Impact on the Industry & the way forward
Analysts’ Recommendations