There's a demand for more affordable cars like Kia Stonic. Photo from Autodeal website
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Filipinos continue shopping for cars despite pandemic—but here’s what they’re buying

It’s been a bumpy road for the automotive industry. But yes, Filipinos are still car shopping   
RHIA GRANA | Mar 22 2021

There were 25,000 cars sold thru Autodeal in 2020, says Daniel Scott, co-founder of the leading online automotive marketplace in the country. But he doesn’t deny the fact that the car industry has been heavily hit by the pandemic, especially during the lockdown in March to April of 2020. 

How were dealers supposed to sell cars if showrooms and malls were closed? How were car buyers supposed to process their bank loans if they can’t leave their homes? So it was a good thing that a digital platform was already in place even before the pandemic to service both car brands and consumers. 

Autodeal has been around for over six years now. With 2 to 2.5 million visitors a month, partnerships with car dealers all over the country—from Ilocos in the North to Zamboanga in the South—and a well-established digital infrastructure, there’s gotta be a way for wheels to keep turning for the local car industry through this website.

Scott, who was initially in the business of travel, thought of putting up an online automotive marketplace because he personally saw the need for one. “I was then based in Tacloban and I was looking for a company car online. There was nothing online. So I told my friend, who is my business partner now, ‘should we build a car website’?” he recalls.

And so they did. Their first baby was a used car listing platform, which they eventually sold to Sulit.ph. Seeing visible growth potential in the new car market and the need to professionalize transactions, they created the startup company, Autodeal.

Autodeal founders Daniel Scott and Christopher Franks

How they work

To differentiate itself from a car dealer, Autodeal doesn’t have a physical showroom. What it provides is a platform where buyers can research and compare hundreds of vehicles and auto-financing deals. They connect buyers with official car dealerships across the country. Among Autodeal’s clients are Nissan Philippines, Ford Philippines, and Suzuki Philippines.

There are 50 or so brands in the Philippines and they offer various promotional deals. This could be pretty confusing especially for a first-time car buyer who perhaps may not even be sure of what car he wants to buy and how to go about the process. The paperwork involved in processing the car loans could also be cumbersome. This is where Autodeal comes in.

“There are a lot of questions that need to be answered,” says Scott. “Which car is best for me? Is it available in Cebu or do I have to go to a Manila dealer to get it? Where can I get a car loan?” Via Autodeal, buyers can shop multiple brands without having to leave their homes. “They can get multiple quotes from multiple brands at the same time. They don’t need to go around, dealership to dealership, finding out information.”

Scott and company can also help book appointments for the buyers—say, a test drive—or even pay reservation fees thru them. They can even help process an actual car loan. “What we offer is a much easier and enjoyable experience for buyers. We’re with them every step of the way,” he says.

Suzuki S-Presso is one of the strongest brands in the multipurpose vehicle category.

Changes in consumer behavior

There have been observable changes in consumer behavior since the onset of the pandemic, notes Scott. The transactional timelines, for one, have increased—from 30 to 40 days before the pandemic, to 60 days at present. He attributes this to the delay in the release of bank loans and the importation of cars from other countries. There was also a delay in getting dealers’ online infrastructures in place.

The average amount spent on purchasing a vehicle per person dropped a few hundred thousands, offers Scott—from an average of 1.4 million in 2019 to 1.2 million in 2020. “Previously, people were shopping up for a Toyota Fortuner, which is in the 1.7 million category. But now, they are shopping down to about a million pesos, which would be your Suzuki Ertiga or Kia Stonic,” he says.

This largely reflects the financial behavior of Filipinos. “Previously, they were willing to stretch their finances a bit because they are confident in their jobs, so they shopped up. Now, they are shopping down, which is a safer option for them,” he says.

Subcompact tend to be the strongest category in 2020—the Toyota Vios, Toyota Wigo, and the Honda Brio. In the multipurpose vehicle (MPV) category, Suzuki Ertiga has been leading, followed by Suzuki S-Presso, Mitsubishi Xpander, and Toyota Rush. Chinese car brand, Geely, which has focused on the 1 million to 1.5 million price points, are also attracting more buyers.

Driving the growth in the small-SUV or subcompact crossover segment are MG ZS, Ford EcoSport, and Geely Coolray, as well as interesting new entries like the Chery Tiggo 2, which ranked as the 41st most inquired-about vehicle in the first half of 2020.

There is growing interest in Chinese cars like the Geely Coolray.

Forecast for 2021

Since the lockdown in March and April, there has been a steady increase and improvement on sales and transactions in Autodeal. Sales figures last December 2020 were actually better than figures from December 2019. They’re also seeing a positive trend in sales for 2021, but there might be a slight slowdown as Covid restrictions are once more put in place.

“We will see if this will have an impact. But I think generally we see a slow recovery to some level this year. I think 2022 will be more decent recovery and maybe in 2023,” Scott says, “we’ll see real recovery happening.” 

 

Car photos from Autodeal website