Local car sector is optimistic

PANAMA. If there is a sector hit hard in the United States and Europe by the global economic crisis, it has been the automobile industry.

But the international scenario doesn’t to be worrying the local automobile market, at least not yet, according to Ricardo Perez’s vice-president of sales and the new president of the Association of Automobiles Distributors in Panama (ADAP in Spanish).

Diaz, with an enviable tranquillity, is certain that liquidity in Panama’s banking sector has allowed the country to maintain until now, a good growth rhythm.

According to Diaz, if the rhythm continues, 2009 sales “would only be 10 percent below last year’s, so the sector would not be seriously affected.”

Compared to the decline in the US and Jan with decrease of up to 50 percent in recent months, that would be dream.

He backs local businessmen who say the crisis will not affect them much. “In Panama, the strong competitive atmosphere is due to the good liquidity of banks.”

He noted that 60 percent of the cars sold to clients are financed by banks, arguing that the banks’ decision to tighten financing, to lower risks, leads to lower sales, “albeit nothing too dramatic.”

Last year, the automobile sector closed with approximately 43,320 sold units, with a 4 percent increase from 2007 figures. During the first semester in 2008, the sector registered a 19 percent growth, followed by a 5 percent deceleration during the second semester.

Diaz believes 2009 will be a good year. A slight slump in sales is expected, but nothing too radical: approximately a 10 percent decrease. This decrease needs to be seen against the backdrop of the industry’s recent growth and its cyclical nature

“We have to take into account that in Panama for five years now the automobile industry has been experiencing growth, but performance is cyclical. Because of that, in 2009 a slight decrease in sales is expected, independent of the global crisis.”

Diaz’s optimism, is not to say that the local automobile sector should not be taking measures against the crisis, as the head of the association warns that any and all decisions need to be taken steadily and with much caution.

Diaz has several objectives for his new role. One of them is to bring the automobile sector and the government closer together, “so that the government understands a little better the industry’s dynamic, and keeps in mind what can happen when laws are approved without consultation.”

Similarly, the association also looks towards better prices and a higher gasoline performance