The Philippines Used Car Market Is Expected to Grow at A CAGR Of 7.6% In the Next Five Years in Terms of Used Car Units Sold by the Year 2026, as per findings released by Ken Research.
Improved infrastructure, Train tax, and young population are listed as the key “pull” factors for the growth in the Philippines Used Car Market. This market is expected to witness a growth of 7.6% in next 5 years.
1. “Mega Manila Subway”: Government to Invest More Than 4 Bn Dollars in The First Subway Project.
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The Government of Philippines has been working towards improving the infrastructure of the country. President Duterte’s ‘Build! Build! Build!’ program is aimed at ushering the ‘Golden Age of Infrastructure’ in the Philippines. These initiatives will improve the road and the traffic conditions of the country making owning a car a more convenient option for the people of Philippines.
2. Philippines Number of Registered Vehicles was reported 5,000,000 Unit in Dec 2021: An Increase from the previous number of 4,000,000 Unit in Dec 2020.
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As of 2021, around 64.7% of the Filipino population is in the age bracket of 15 and 64 years old. This states that a huge chunk of the population consists of Millennials, who don’t have the financial stability to afford a new vehicle; hence they resort to the pre-owned units in order to meet their requirement of a dream car. In 2018, 25% of Filipino households in the Philippines owned a motorcycle or a tricycle. Furthermore, approximately 6% of households owned a car, jeep or van, while only 4% owned a motorized Banca or boat.
3. The Tax Reform for Acceleration and Inclusion (TRAIN) Law in Philippines, Proving to Be a Major Driving for Used Car Market to Reach around 460 thousand Units Sales by 2026.
Republic Act 10963 or the Tax Reform for Acceleration and Inclusion (TRAIN) law came into existence from 1st January, 2018. The reform in taxation got a merit for the used car industry of Philippines because the new vehicle units have become relatively expensive. Since all the new car buyers now would have to pay steep taxes, the buying behavior is switching from new cars to pre-owned cars which are available at much cheaper price and the buyer is not supposed to pay less tax or at times no tax on the purchase. This step was taken by the current government in power to reduce the vehicle traffic on roads and encourage people to use second-hand or pre-owned cars and reduce demand for imported cars.
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