Besides the record sales for 2010, the intense attention of our auto industry was focused on the IRR [Implementing Rules and Regulations] of E.O. 877-A. What started out as a DeLoitte-Touche audit on the future of car manufacturing in the Philippines has resulted in issues that divide new car assemblers, new car importers, used car and used truck importers. Considering government programs to produce local motor vehicles and parts have been around since 1968, the slow growth of the middle class has stunted the motor vehicle sector of the economy. It may look big in terms of contribution to GDP by virtue of its high value, but its sales reach is a paltry 0.5% of a population of 100 million citizens. Being a member of the ASEAN complementation program all the more showed how stunted our car buying population is vis-a-vis Malaysia, Thailand and Indonesia. Assuming all tax incentives being equal across ASEAN, the countries with the higher purchasing power got the bulk of the export manufacturing factories. At this late stage, it must be accepted that with the car making incentives that are currently in place and bilateral free trade agreements that we have across the globe, parts manufacturing and car assembly in the Philippines is a diminishing industry, which only high tariffs and perhaps, the cancelation of free trade agreements can keep alive.
Some good ones
Nevertheless, there are still a few bright spots as we do produce world class vehicles that are priced cheaper than tariff free imports from our trade partners. These are the Toyota Vios and Innova, Honda City and Civic, Isuzu D-MAX and Crosswind, Mitsubishi Lancer EX, Nissan X-trail and Livina, Mazda3, Ford Focus and Escape. At one time, Ford Santa Rosa exported 4 different models in both left and right hand drive, though that is history. On the other hand, Toyota exported parts modules that are the dollar equivalent of 80,000 compact cars.
Though Toyota North American sales were adversely affected by recalls, Toyota's local sales were growing along nicely. The launch of the 1.3 Vios automatic allowed Toyota to grab top spot from the Honda City 1.3. Vios sales continue to be unfazed despite the common sight of Vios taxis with hoods half cocked because of poor taxi-owner maintenance of after market LPG kids. Toyota's big engine models of the Camry, Alphard, Prado and Land Cruiser and the entire Lexus model line up were instant beneficiaries to the reduced tariffs of JEPEPA. This allowed Lexus to bring in the majority of its international model line up of hybrid cars to join Toyota's Prius. Even the mainstay Altis has grown a high tech character.
Cognizant of the needs of the upper class, Ford has astutely priced the very spacious E-150 full size van to come right at the start of the Election Season. Sold side by side with the keenly priced 2010 Expedition EL, these US made trucks became the default vehicles of the Election campaign period. Ford has finally introduced the Ford Focus TDCi in 3-box sedan variant and is now finally hitting the sales sweet spot that the petrol sedan version could not reach. By the end of the year, Ford promised the introduction of the new upsized Ford Ranger, made in Thailand. Cognizant of the price buyer sector of the local market, Ford continues to update the Ford Escape and Mazda3.
Despite Ford's diminished ownership share in Mazda, Mazda continues to jointly produce cars in Auto Alliance Thailand. Ford's recently introduced Fiesta is made in the same factory as the locally available Mazda 2. The same story awaits the new Mazda BT-50 pick up. Japan made Mazda CX-7 supplies for the Philippines are finally arriving and a big engine variant of the Mazda 6 will soon take advantage of the JEPEPA tariff reductions.
Honda continues to be popular with its City, Civic and CR-V. Though Toyota has been selling the Prius for 3 and half years now, Honda has not seen it fit to introduce the Insight hybrid or hybrid versions of the Civic and Jazz. Hopes for the hybrid CR-Z sports car spring eternal.
As Lancer EX models are now assembled in Cainta, Rizal, Mitsubishi has expanded the Lancer range by teasing speed enthusiasts [and Subaru drivers] with the EVO X and a Ralliart version. Mitsubishi has also updated its Cainta assembled Adventure AUV and Fuzion MPV. With the undiminished popularity of the Thai made Montero Sport Diesel, Mitsubishi has dropped the Outlander and replaced it with the ASX, a plus size SUV like MPV version of the Lancer EX. Mitsubishi continues to supply the heavy demand for the locally assembled L-300 Versa vans.
Isuzu's consistent top 5 ranking in the sales chart continues to amaze as it sells not a single car. Isuzu's good name is what propel repeat customers for all its LCV and AUV with all the frills that give a "wow" factor to typical customers. Isuzu would prefer to sell more of its mainstream trucks but unless the government can make up its mind on used truck imports by adjusting incentives to encourage national re-fleeting with EURO IV truck engines, the new truck market will remain stunted.
Hyundai and Kia
Tucson, Sonata, Accent, Genesis Coupe, Grand Starex Limousine - it appears HARI or Hyundai Asia Resources couldn't put a foot wrong. Sales were so strong that despite Toyota levels of pricing, Hyundai displaced Honda as the 3rd best selling brand locally. Its cousin, Kia, distributed by Columbian Auto, also has a widely revamped product line despite the strong sales of its current Carens and Carnival MPVs. The latest Sorento SUV and Forte sedan have long waiting lists.
The Two Nissans
Nissan Universal Motors [UMC] continues to be the back bone of the small-medium scale entrepreneur with its Thai made Navara pick up and locally made Urvan. This year, UMC has gone high end with the options laden Murano and the new Nissan Patrol Royale. Yulon's Nissan Motors Pilipinas in Santa Rosa continues to assemble the unique Livina MPV and the new X-trail. Nissan also introduced its Accord-Camry challenger, the Teana. To round off its new introductions, NMPI also imported the Mexican made Sentra 200. NMPI continues to supply the local basic transpo and taxi market with the Santa Rosa made Classic Sentra.
Subaru, Suzuki and MINI
Though both Subaru and Suzuki have withdrawn from rallye motorsports, all their new cars continue to offer the long spring travel ride unique to cars developed from motorsports. Thus both continue to hold on to their highly specialized car enthusiast niches whether its the diminutive Suzuki Celerio, made in India or the sublime Subaru Forester turbo. The Subaru Legacy GT, Legacy Wagon and Outback now provide STI like performance for the executive sector. New Impreza versions sport new engines and transmissions plus a WRX -STI hatchback with 5-speed automatic. Subaru's strong support for biking across the Philippines and Vietnam gave Motor Image a new twist to its image. Suzuki in the meantime continue to tempt the local market with its SX4 sedan and hatchback, plus the Grand Vitara compact SUV. MINI continues to coddle its loyal fan base by flying in the Flying Finn, Rauno Aaltonen, to locally launch an Aaltonen signature edition of the MINI JCW cabriolet. And here comes the Countryman, a maxi MINI, if ever.
Chevrolet's Cruze is a twin pronged tug at the heart strings of enthusiasts. One is the Blanco Race Engineering version for the hard core. The other is the fun-celebrity-lifestyle approach with known young actors projecting the Chevy image. Behind the flash and popularity of the Cruze, the other crowd drawer on the showroom is the Suburban.
After a healthy string of sales for its accident avoiding self-braking XC60, Volvo introduced the sexily styled S60 which, not only automatically brakes for obstacles, but also for pedestrians.
BMW Asian Carmakers have recouped the top selling sales crown when supplies of the new 5-Series finally caught up with local demand mid-year. After introducing the X1 and Z4 last year, ACC is preparing to launch the new X3. ACC also introduced a new kind of trade-in financing deal that has been copied by its competition. Copying BMW's finance schemes are definitely a work in process.
PGA Porsche and Audi
Porsche and Audi sales, continue to depend on the personal charm and network of their best sales executive, one Robert Coyuito, Jr. Mirroring the fortunes of the parent company, sales of Panamera, new Cayenne and the GT3, hot versions of the iconic 911 are making up for lower sales of standard 911s. The popular Audi R8 and strong sales performance of the A4, again mirroring its international sales performance, round up Audi's steady share of the luxury market. Porsche Roadshow anyone?
Spaghetti Westerns and Indians
On a smaller scale, TATA owned Jaguar and Land Rover sales, along with Land Rover sorties into image building sports events in China are also highly dependent on the charm of Wellington Soong, ESQ. Besides the new XJ, TATA's JLR distributor, Mr. W. Soong also launched the Maserati Quattroporte. Jaguar or Maserati track day, anyone?
CATS Motors has also culled its press fleet activities and international launches as unpredictable swings in the future of some Chrysler, Jeep and Dodge models keep fans waiting. At least it delivered on the promised long awaited diesel versions of the popular Chrysler Town and Country CRD, Jeep Commander CRD and Chrysler 300 CRD. CATS has now introduced diesel and direct injection Blue Efficiency variants of its Mercedes Benz C, E, ML and GL-Class. It also sells the S400 hybrid. Camsur, here we come! Again.
The China wave
Foton's large dealer showrooms are now fast dotting the inter-island landscape as MPX van and View vans, popularized by the PCSO ambulances, expand sales. Great Wall, a Guangzhou carmaker is now selling a Toyota Scion look alike called the Cool Bear and the Hover, a rehashed North American Isuzu Axiom. Geely now owns Volvo, but has largely left Volvo's management style intact. The Chery dealer network, like some of its models being adapted for the picky Philippine market, are a work in process.
Used car imports
Though temporarily halted, the issue on used car imports tends to spill over into the truck sector, where almost 99% of the market are reconditioned and converted trucks. The used car and truck imports always becomes a labor issue. Whose workers have a right to keep their jobs owing to stiff competition? The formal hire, security-of-tenure assembly line and parts manufacturing workers or the contractual day job workers of used truck and car re-conditioners? It goes without saying that the used vehicles, whether smuggled or poorly reconditioned are always cheaper and our consumers are not mature enough to value safety over cheap price. The question that should be posed now is the government willing to let populist sentiment decide policy? By this it means, flood the country with cheap used vehicle imports and safety and environment be damned. This may have a neutral effect on employment as Assemblers will shut down the assembly lines and choose to import CBUs from their principals. Or, ban them altogether and raise tariffs on imported CBUs to limit consumer choice to buy only locally made. Whether, they're in or out, whether legal or not, this too is a work in process.
Rich men only
Like it or loathe it, the local car market is still a rich man's market - if you don't count the used car and truck imports. At least, as a market, we are in the radar screens of such known brands like Volkswagen, FIAT, Alfa Romeo and Ferrari. What will make these marques take the plunge into local sales depends on how friendly our laws are to foreign investment. Another, work in process.
Auto Industry Grade Rating : Started early in the year with an A, and ending the year with an A plus