The pickup in the pace of car consumption was expected to continue in December. #carssales #gdp

The increase in vehicle sales in November fuels the government’s drive to finish with a 6 percent gross domestic product (GDP) this year, according to ING Bank senior economist Nicholas Mapa.

“Road vehicles zoomed to 10.3 percent, lifted in large part by strong sales of the AUV market with the Filipino consumer finding new people-carrier options,” said Mapa.

“The AUV market, smaller 7-seater vehicles, posted a whopping 67.2 percent jump in sales versus November 2018 as borrowing costs have come down significantly post BSP’s (Bangko Sentral ng Pilipinas) rate reversal,” he added.

Aggressive promos from car dealers have helped boost sales, Mapa said.

The analyst also noted that passenger car sales showed a sustained growth, posting a modest pickup in sales reaching 3.8 percent for November.

Such pickup in the pace of car consumption was expected to continue in December, allowing the government to hit the lower end of its GDP target of 6 to 6.5 percent for 2019.

“With financing costs coming down, we can expect December to post another strong month of sales, which could be a forebearer of good tidings for the overall GDP growth print,” Mapa said.

“We can expect the December vehicle sales number to bolster the Philippines’ bid to get fourth quarter GDP to 6.6 percent growth and keep the string of 6 percent annual growth for the Philippines alive for yet another year,” he added.

“Road vehicle sales is a key contributor to overall capital formation and GDP as a whole, comprising 8.4 percent of GDP, more than double that of public construction,” Mapa said.