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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
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