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Philippines Used Car Market Research Report: Ken Research
November 2019

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What Is The Current Potential Of Philippines Pre-Owned Car Market?

Philippines used car market is currently at its growth stage with a growing appetite for certified and non-certified passenger cars. The used car market in terms of volume sales has increased to ~units in 2018 from ~ units in 2014 registering a CAGR of ~% over the review period 2014-2018. The market is largely fragmented with the presence of multi-brand dealers and large a number of individual sellers. Within the organized market, Direct Dealership Sales Agents (DDSA) and repossessed car sellers have a fairly concentrated market with only a few players supplying used cars in the market. The pre-owned vehicle buyers in Philippines have shown a higher interest in certified cars over non-certified cars due to better quality of refurbishment and replacement services of faulty parts with original parts, better after-sales services, and complete car inspection to compute the road worthiness, extended warranty & other documentation and finance services.

The used car market of Philippines by the value of the transaction has increased from PHP ~ billion in 2014 to PHP ~ billion in 2018. There are various reasons for the surge in market size by value of the transaction and one of the most significant reasons is the surging average ticket size of used cars in Philippines. The market share of the organized market has surged from ~% in 2014 to ~% in 2018. It has been observed that more and more OEM dealers are integrating certification infrastructure to attract more used car buyers. It has also been observed that in the last 5 years, the value of non-performing auto loans has surged significantly resulting in more foreclosures and auctions of repossessed cars by banks. The online channel has served as a platform for both organized and unorganized pre-owned car players to connect and conclude sales.

Industry Value Chain in Philippines Used Car Market

The Philippines used car market comprises of organized and unorganized market players.  The unorganized market comprises of individual sellers and freelancers who supply the major volumes of used cars to the market. The new cars purchased by individuals in the Philippines generally convert into used cars within a span of 3-5 years. Later, these units are either sold to friends and family via word of mouth or are sold to multi-brand dealers via listing on online classifieds. If the vehicle is in good condition, the seller can sell the unit to DDSA also. Within the organized market, multi-brand dealers of used cars supply the highest volume of used cars in the market.     The multi-brand dealers procure the used cars from either individual sellers, DDSA and from bank auctions of repossessed cars. In the case of DDSA, the cars are mostly procured via trade-ins, i.e., when the seller wishes to upgrade the vehicle to a new model of the same brand through an exchange program. The share of DDSA is expected to surge to ~% by 2023. The banks procure repossessed cars from vehicle buyers, who default on their auto loan. In this case, the bank confiscates the used cars and auctions it to the general public through tenders/auctions. Banks auction vehicles to players in both organized and unorganized market. Online platforms have provided the used car market players a convenient way to list vehicles and increase their reach to the target audience. Classified pages, online auto portals and social media handles such as Facebook have become the foundation of the online used car market in the Philippines.

Major Segmentations in Philippines Used Car Market

By Type of Market: The market is segmented in terms of organized market and unorganized market. In the Philippines, the organized market has a low market share compared to the unorganized market. The organized market consists of repossessed car dealers; DDSA’s and multi-brand used car dealers. On the other hand, the unorganized market consists of freelancers and individuals used car buyers and sellers.

By Average Replacement Period: The average replacement period segmentation deciphers the average time the vehicle the owner uses its asset and then sells it in the open market. It has been observed that on average, the vehicle owner retains the fleet for at least 3-5 years.

Major Segmentations In Philippines Used Car Market

By Type of Sales Channel: Within the organized market, the sales channel is either a direct dealership walk-in or a lead generated by the online portals for the organized players to increase the sale probability. In the case of the online channel, the eventual sale of the unit takes place from a physical location only.

The unorganized market players also take advantage of listing their fleet of the vehicle on classified portals and social media to increase the outreach. The other channel is direct dealer sellout, wherein the individual seller disposes of the used car for a fair market price to either the multi-brand dealer or DDSA. Unorganized players also depend on word of mouth as a sales channel, wherein the individual consumer sells the vehicle to a known individual within friends or family.

Competitive Landscape in Philippines Used Car Market

Competition within the Philippines used the car market was witnessed to be fragmented in nature with the unorganized market capturing the majority of the market share. Most of the used car sellers in the Philippines belong to the unorganized market constituting of free-lancers and individual sellers. The unorganized players in the market are highly dependent on the online channel and are relatively lesser dependent on word of mouth channels. The unorganized market in the Philippines has a ~% market share in terms of sales volume in 2018. In terms of the vehicle brand type, the market is concentrated with 5 major brands accounting for ~% of the market share in the Philippines used car market. The major five brands are Toyota, Honda, Nissan, Hyundai, and Mitsubishi. Within the organized market, the competition within volumes supplied by the DDSA is fairly concentrated with the presence of 30-40 players. The Direct Dealership Sales Agents (DDSA) market segment has 5 major players holding ~% of the market share and are supplying both certified and non-certified used cars in the market. In the Philippines, the auto loan default rate is on surge due to higher inflation. This has resulted in banks auctioning the forfeited units to multi-brand dealers and others. The market is moderately fragmented with no bank having a share of more than ~% in terms of volume of repossessed cars auctioned in the market in 2018.

Key Segments Covered:-

Philippines Used Car Market Overview and Size

By Type of Market Structure

Organized Market

Unorganized Market

By Type of Sales Origin (Organised Market)

Direct Dealership Sales Agent

Repossessed Units Sold By Banks

Multi Brand Dealers

By Type of Sales Channel (Organised Market)

Online Platforms

Dealership Walk-ins

By Average Ticket Size of Used Vehicle

By Average Vehicle Replacement Period

By Type of Vehicle Manufacturer/Brand

Japanese Brands

German Brands

American Brands

Korean Brands

Other European Brands

British Brands

Others

Key Target Audience:-

Potential Direct Dealership Sales Agents

Existing Multi-Brand Dealerships

Banks & Subsidiaries

Captive Finance Companies

Non-Banking Financial Institutions

Cab Aggregators and Car Rental Companies

Government Organizations

Online Auto Portals

Classified Pages

Investors and VC Firms

Industry Associations

Time Period Captured in the Report:-

Financial Year 2014-2018: Historical Period

Financial Year 2019-2023: Future Forecast

Companies Cited in the Report:-

Brand

Toyota

Nissan

Hyundai

Honda

Mitsubishi

Ford

DDSA

Toyota Certified

Honda Philippines

Nissan Intelligent Choice

Hyundai Philippines

Mitsubishi Certified

Banks

BDO

PS Bank

BPI

East-West Bank

China Bank

RCBC

May Bank

Sterling Bank

Security Bank

Classified Pages/ Online Auto Portal

Phil Kotse.com

OLX

Auto Deal.com

CarMudi Philippines

Key Topics Covered in the Report:-

Used car Sales Market Philippines

Philippines Used Car Market

Used Car Market in the Philippines

Repossessed Cars for Sale Philippines

2nd hand Cars for Sale Philippines

Pre-owned car sales Philippines

Philippines Used Car Industry

Used Car Industry Philippines

Used Car Industry in Philippines

Used Car Services Market in Philippines

Market of Philippines Used Car

Pre-owned vehicle buyers in the Philippines

Used car market of the Philippines

For More Information On The Research Report, Refer To Below Link:-

Philippines Used Car Industry

Related Reports by Ken Research:-

Indonesia Used Car Market Outlook to 2023 - Rising Popularity of Online Platforms and Reduction in Average Ownership Period to Drive Used Car Sales

UAE Used Car and Auto Classified Market Outlook to 2022 - By Revenue Streams (Commission, Paid Listings, Banner Advertisement), By Export and Domestic Sales

Russia Used Car Market Outlook to 2022 - by Type of Car (Sedans, Crossovers and SUVs, Hatchbacks and Others include Micro Vans and MPVs) by Car Age, by Distribution Channels (Dealers and Online)

Contact Us:-
Ken Research
Ankur Gupta, Head Marketing & Communications
Ankur@kenresearch.com

+91-9015378249



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