The Philippine automotive market could shrink by 1 percent to 2 percent in 2026 before returning to growth in 2027, according to Toyota Motor Philippines (TMP), as weaker sales in the first seven months weigh on the industry’s near-term outlook.
TMP Senior Vice President Sherwin Chua-Lim said the market’s longer-term growth potential remains intact, with average annual growth of 5% to 6% still a reasonable assumption once the recovery takes hold.
“On a normal basis, I think an average 5 to 6 percent is realistic,” Chua-Lim said.
For 2026, however, Toyota expects industrywide sales to finish below last year’s level amid economic uncertainties, including the Middle East crisis. The company had entered the year expecting the market to expand by about 1 percent.
“The market this year is down, minus 1 or minus 2 percent,” Chua-Lim said.
He expects 2027 to be a recovery year, although the strength and pace of the rebound will determine how quickly the market returns to its longer-term growth trajectory.
“Based on what we see, next year is the recovery year. How fast is the recovery, that will determine” the subsequent growth trajectory, he said.
If the market resumes 5% to 6% annual growth following the recovery, Chua-Lim said vehicle sales could reach around 600,000 units by 2030.
The outlook comes after industrywide sales reached a record 491,395 vehicles in 2025, up 3.7 percent from the previous year. Sales reported by members of the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) and Truck Manufacturers Association (TMA), however, declined 0.8% to 463,646 units.
The weaker trend has continued into 2026. CAMPI-TMA sales fell 10.2% to 241,725 units in January to July, from 269,207 units in the same period a year earlier.
The seven-month decline means the market would need a stronger second half to limit the full-year contraction, although the eventual outcome will depend on economic conditions and consumer demand in the remaining months.
For Toyota, the key issue extends beyond the expected 2026 decline. Chua-Lim said the pace of the 2027 recovery will help determine how quickly the Philippine vehicle market can return to sustained growth and approach the longer-term 600,000-unit annual sales potential.
