By Roderick T. dela Cruz

The automotive industry expects a slight growth in sales this year despite the global economic downturn, but prices of vehicles are going up mainly because of the weaker peso.

Elizabeth Lee, president of Chamber of Automotive Manufacturers of the Philippines Inc., conceded yesterday that the peso?s drop against the Japanese yen and the US dollar had been creating upward pressures on prices of brand-new vehicles.

The peso yesterday closed at 47.42 against the greenback, down by 17 percent from 40.50 a year ago.

Its value against the Japanese yen fell deeper by 37 percent to 0.52 per yen as of this week, from 0.38 per yen from early February last year.

Lee, who is also the vice president for marketing and sales of Universal Motors Corp., said despite the situation, prices of motor vehicles in the country remained relatively stable.

?No one is going to offer a ridiculous price increase in this situation,? she said.

But Angel Dimalanta, president of the Automotive Industry Workers Alliance and a plant supervisor at Toyota Philippines, said prices of vehicles rose by an average of P20,000 a unit because of the strong yen and weak peso.

Car prices are first quoted in US dollar and Japanese yen, depending on the nationality of the manufacturer, before they are sold in the local currency.

Lee said other factors were affecting unit prices. They include prices of parts, inflation, interest rates, labor cost and marketing strategy of each company.

She said the industry expects to achieve a 2 percent to 4 percent increase in sales to about 130,000 units in 2009, after selling 124,449 units on a 6 percent growth in 2008.

She said vehicle sales in contrast were down 37 percent in the United States, the world?s largest car market, last year.

The growth in remittances, strong consumption spending, and rising entrepreneurial trends among Filipinos are expected to drive the growth in industry sales in 2009, she said.

If the global economic downturn became more pronounced in the Philippines, Lee said she expected a flat growth under a worst-case scenario.

?There is no reason for us to forecast a decline,? she said.

Lee said there had also been no layoffs reported in the local car industry as of January this year. ?We do not contribute to unemployment number,? she said.

Frank Mero, president of Metal Workers Alliance, however, said Mitsubishi Philippines implemented a redundancy program that affected 88 of the company?s 457 employees.

Those given early retirement options received attractive packages and left the company as ?millionaires,? Mero said.