A new report conducted by car trading site Carmudi revealed that 76 percent of Filipinos are planning to purchase a car in the next two years compared to 65 percent in other developing markets.
In terms of consumer behavior, the Philippines has the highest level of vehicle upgrade, with 96 percent planning to upgrade their cars when they reach a more financial and stable condition.
Meanwhile, attractive consumer loan programs have boosted the strong demand for passenger cars and commercial vehicles. The growth in consumer loans was driven by a 26-percent increase in auto loans, which translated to P244.61 billion.
As consumer loans continues to grow, local banks are racing to come up with different strategies such as lower interest rates, attractive product offerings, and freebies to boost their share of the industry and give them a competitive edge.
With the Philippine government initiating ongoing economic reforms and a high inflow of remittances, forecasts predict that consumer lending will flourish at a double-digit rate, driving consumers to further invest in cars and motorcycles.
As more banks invest in consumer loans, consumer credit is also expected to increase and become more widely accessible to all Filipinos, the report said.
?Car financing has always been an option that consumers in the Philippines look at when buying a car, and data shows that the demand for auto loans in the country continues to increase,? said Subir Lohani, managing director of Carmudi Philippines.
?With the growing economy and increase in demand for passenger cars, we believe that more of our Filipino customers will seek assistance about financing options. As more banks and financial institutions offer attractive loan programs and require low down payments, we expect auto purchases through financing will continue to flourish in the country,? Lohani said.