The Velocity Forum
‘What are you hoping for the PHL auto industry in 2021, and how do you think we’ll realize it?’
WHILE WE’RE doubtless happy to be unshackled from the nightmare that was 2020, the hardships are not, by any stretch of the imagination, over. In fact, recent developments are disturbing on several fronts.
If you’ve been reading and watching the news of late, you know that we’re nowhere close to done with the local vaccine rollout before we reach the critical mass herd immunity. Speaking of which, not everyone is sold on vaccination in the first place as reports of adverse reactions and even death have surfaced — adding to the “anti-vax” paranoia.
Then a recent spike in local cases is also starting to blight what is widely expected to be a “recovery year” for everyone — leaving our government officials in a basic holding pattern when it comes to the tight rein its keeping on businesses. As we’ve seen, it doesn’t take much to cause a spike in cases.
One thing is certain, the auto industry is keeping a close eye on how 2021 will play out — particularly in relation to COVID-19. While 2020 and its awful 40% decline is in the rearview mirror, uncertainties are still very much in view through the windshield. “Velocity” asked a number of auto industry experts, along with a Department of Transportation (DoTr) official, on what they’re expecting and hoping for this year, and how we can get from here to there. — Kap Maceda Aguila
MA. FE PEREZ-AGUDO
Association of Vehicle Importers
President and CEO
Hyundai Asia Resources, Inc.
President and CEO
Changan Motor Philippines, Inc.
THROUGH the years, our industry has experienced a good number of economic shocks. Admittedly, the present situation is unprecedented, with a current and projected 20% growth. Nevertheless, we continue to innovate and find ways to meet the mobility demands in the new normal in a stable, safe, and sustainable way.
More than that, the auto industry is reaffirming its role as a catalyst in connecting a society now fragmented by this pandemic. Through safer means of transportation, we aim to connect people and support the recovery of industries which have been greatly affected by the pandemic. We also look to government support through sound and progressive polices that would ensure a win-win situation for private and public sectors and ultimately, for consumers.
MY HOPE for the Philippine auto industry for 2021 is the same I have for our country — and that is for positivity and vibrancy to be back to pre-pandemic levels.
The current state of this health challenge is highly unstable, with spikes moving up and down day on day, which is an indicator that control has not been achieved. The solution lies in not one but a combination of many actions for all concerned to take. These range from compliance to standard health protocols, managing individual situations via healthy living, to working with everyone to control the spread and proper information management and dissemination for the public.
Similarly, the auto industry will be revived again with a combination of actions taken by all business stakeholders to include distributors through the appropriate product offers, the dealer systems through safe customer engagement practices, the financial institutions via timely and fair handling of loan applications, and the media for helping extend the program information to car buyers and owners.
FRANCIS JONATHAN ANG
Chief Operating Officer
Auto Nation Group
THE CORONAVIRUS has undeniably reshaped the businesses across the world, including the automotive industry. It taught us the importance of being agile, adaptable, and able to increase the pace of innovation and change.
The pandemic slowed down the automotive industry last year, but it has shown great resilience, too. As consumer behavior continues to shift online, we have seen how quick the automotive brands have adapted and introduced new solutions to the customers. We, too, have embraced the opportunity to transform our customer experience as well. We have strengthened our digital capabilities, and invested on various digital tools to enhance the interface and interaction both in our physical showrooms and online showroom.
The path to recovery will be slow, but a little progress every day counts to our success. Immunization is going to be the key and I look forward to the time when people could go out safely and comfortably. I believe that it’s only when people are confident in traveling and going out that the industry will quickly get back to normal. It won’t happen overnight, but I am optimistic that we would get there sooner than later. Finally, as more businesses open and mobility restrictions ease, I am confident that the automotive industry is on its track to rebound this year.
ATTY. ALBERTO ARCILLA
President and CEO
The Covenant Car Company, Inc.
WHILE we are still navigating through the COVID-19 pandemic, we continue to witness the resiliency and dynamism of the automotive industry. At TCCCI, we implemented new digital programs to address the developing needs of the Filipino car buyers, keeping in mind the changing selling environment. We offered quality models with easy ownership packages and reinforced the processes within our dealership network to meet the demands of our customers.
Our plans and programs are premised on the optimistic recovery of the local auto industry from last year’s slowdown. We, however, are prepared to still encounter challenges ahead. But with our strong and determined team at TCCCI, I remain optimistic that our collective efforts will fuel the recovery and growth of our brands and contribute to the recovery of the automotive industry.
We continue to strictly implement our health and safety protocols in all the dealerships. At TCCCI we have already coordinated for the inoculation and vaccination program for TCCCI stewards as the vaccines become generally available. A healthy workforce will help us ensure business continuity and mitigate further disruption in our operations.
While the performance of the automotive industry is directly correlated to the economy, TCCCI will continue to understand the evolving needs of our customers, focus on building our brands, and ensure that we have the right products to serve our clients.
We will continue to further strengthen our relationships with our stakeholders, principal partners, dealership network and institutional banks as this alliance will be a pivotal role in ensuring that TCCCI and the automotive industry recover and thrive.
Chery, Chevrolet, Foton, Geely,
MG, and Nissan
WE ALL hope that 2021 is going to be a lot better compared than last year, because people have, in a way, learned to live with the threat of the virus.
Auto sales are projected to increase anywhere from 30% to 46%, and I’ve always believed in the industry’s resiliency. People will always need cars. Banks will play a big part in this recovery. Once they go full blast, it will go both ways — we sell and they will earn interest through collateralized loans. I also certainly hope that banks that still don’t have automotive retail financing will get into it; it’s still their best bet to recovery. They are missing out on a lot!
My fearless forecast: The top four brands will still be consistently on top. The market disruption will happen in the P1.2-million-and-below price point. Believe me, the Chinese are coming -— or have already arrived. Chery, Geely, MG, etc. will make consumers think hard about how they will spend their hard-earned P1.2 million.
Honda Cars Philippines, Inc.
YEAR 2020 had been a challenging year due to the global pandemic. Nevertheless, the pandemic also opened a window of opportunity for the whole automotive industry to reaffirm its service to the Filipino people.
As we all walk through 2021 and face another challenge in the imposition of the provisional safeguard measure, we fervently hope that the automotive industry will continuously provide mobility for Filipinos. As long as the industry remains true to its commitment to the Filipino people of providing excellent products and services, we will be able to surpass this challenge.
President and Managing Director
Nissan Philippines, Inc.
WE HOPE the auto industry will begin to recover in 2021, and we expect that it will continue prioritizing the health and safety in workplaces for customers and various stakeholders while doing so. We are hoping that the industry will continue to work hand in hand with government stakeholders and remain agile to be able to address the needs of the market.
We at Nissan continuously look for ways to be flexible and agile to serve our customers better, and contribute to the growth of the industry. The Philippines continues to be a key market for Nissan globally, and the company remains committed in providing our customers with innovative products and excellent services through our expanding network of dealerships nationwide. We have also introduced digital solutions such as a virtual showroom, and digital communications to minimize physical interaction and to adapt to the ever-changing environment. continuing to focus on our key pillars, Product, Customer Experience, Service, and People, we are optimistic of our contribution to the recovery of the industry.
Toyota Motor Philippines Corp.
I DO hope to see more Filipinos being able to move more freely and safely. This will be achieved through strides in vaccination programs and various efforts to contain the virus, coupled with the availability of a range of consumer options when it comes to buying cars that fit their needs in our post-pandemic reality.
With the progress in the government’s infrastructure programs, I know that this will not be impossible. “Mobility For All” has always been our goal, and we would like to think that every day, we are closer to realizing that by further boosting and promoting our local car production, regularly introducing relevant and exciting models, and promoting adoption of new technologies like hybrid.
We are also making car ownership more flexible, convenient, and rewarding through expanded value chain offers and enhanced customer experience both online and in dealerships. On top of all these, we are coming up with new mobility services that are changing the way individuals, families, enterprises, and industries move. We are one with the whole industry in working for freedom of movement for all Filipinos.
President and CEO
Mitsubishi Motors Philippines Corp.
WE, at Mitsubishi Motors Philippines Corporation, are always optimistic that the industry will bounce back this year. However, we do recognize the new challenges ahead such as the current safeguard duty deposit requirement, new virus strains discovered, and the rising COVID-19 cases.
We shall once again rely on the resiliency of the company and our business partners to overcome these challenges. We will also continue to invest in enhancing our online assets to remain connected to our customers. We have also supplied our sales executives with necessary digital tools to promote our products via the online platform.
To sustain a healthy organization, we implemented strict health and safety protocols and conduct monthly COVID-19 testing for all employees. Our business processes and methods are continuously improved to secure efficiencies that are geared to generate savings.
I AM hoping for a better year in 2021. This means growth — both for new car-sales and after-sales services. As of February this year, the industry posted negative growth. However, we should start seeing growth in March coming from a lower base last year. Recovery may take a while due to the rising concerns on the increasing number of COVID-19 cases.
Last year, the Taal Volcano eruption in January and the two-month struggle after this was followed by sad news due to the COVID-19 pandemic. We were caught off guard mid-March and had to take drastic measures in adapting to the new normal. One of the most obvious effects on our operations was the immediate decline in the sales of our Lexus cars. April was a month of zero operations. From there, it was the start of a slow recovery with the enforcement of various community quarantine conditions.
There are a number of new models from various automakers to be launched this year. And remember that units launched in 2020 weren’t able to realize a full year of sales due to the reasons previously mentioned. So, it will be exciting for the general public to consider buying these new vehicles. This will, however, depend on the progress of the vaccination process. We can expect more customers to visit our dealerships once the situation improves.
Online campaigns will continue as a safe way of delivering information to the general public. More and more communication will be done through websites and e-mails as some of the customers might choose to stay at home. Virtual showrooms have proven to be effective and are a very useful tool in prospecting. Online payment facilities are necessary to promote our business, and safety protocols must be continuously implemented at the dealership to ensure the safety of visitors at the showroom and service areas.
For after-sales servicing, customers must be reminded about their next periodic maintenance visit. Constant follow-up calls/text/e-mails must be made. There is always the need to emphasize that cars need to be in tip-top condition so that they will be fuel-efficient and will have a long service life.
ATTY. MARK STEVEN PASTOR
Assistant Secretary for Road Transport and Infrastructure
Department of Transportation
CONSISTENT with the transformational initiatives of this administration to reorganize and rethink our public transportation, we are ceaselessly implementing the Public Utility Vehicle Modernization Program (PUVMP) to meet the entirety of our objectives to set the standards for public utility vehicles in terms of safety, security, and convenience — targeted to improve the system for our drivers, operators, and commuters.
Further, we see the emergence of more electric vehicles (EVs) in partnership with the United Nations Development Programme (UNDP)-Low Carbon Transport System (LCTS), as we prioritize the efforts to mainstream the use of energy-efficient modes of transportation, and work on the establishment of standards and regulations for EVs and charging stations.
In the introduction also of the EDSA Busway System — having modernized bus units with features such as the Automatic Fare Collections System (AFCS) and Global Positioning System (GPS) — we are working for the continuous improvement of the busiest thoroughfare in terms of its service plans, headways, and bus dwell time.
The advent of the pandemic last year has strongly challenged our transportation system and with these efforts, we aspire to achieve these pivotal changes and set the maximum service standards for the public.
Southgatemotors Ventures Corp.
Auto Transport Ventures Limited
WE’RE HOPING that the auto industry will post double-digit growth of at least 30% for the year, and that the economy continues to open through businesses, coupled with government’s efforts through infrastructure projects.
Hopefully, banks return to approving loans at previous levels. With the increasing number of COVID cases, there remains a healthy demand for vehicles that cannot be satisfied unless the banks increase financing approval rates. Banks remain the lifeblood of the industry and the economy. Without their support, growth would remain restricted. The industry is also hoping for the stoppage or postponement of the implementation of the DTI safeguard duty for imported vehicles.
United Asia Automotive
ALL OF US in the industry are hoping that things will get back to normal, but there are more important things like COVID-19 and the vaccine that would hopefully bring back consumer confidence for retail and other services, including tourism. Mobility is so important nowadays either when you’re moving people or goods, so there’s still a market out there that we should find.
I’m confident that the government, in cooperation with the private sector, will be able to vaccinate 70% of our population soon, and much of their focus now should be to bring in the vaccines.
Vice-President and General Manager for Automobiles
Suzuki Philippines, Inc.
TO BE honest — and very candid — the dawning of this new year brought along with it a lot of hope that things may possibly change for the better. Unfortunately, as we approach the end of the first quarter of this year, the sad reality we are facing as a country is the fact this global pandemic seemingly has no plans of leaving us in, at least, the near future.
With this being said, I am still optimistic that Suzuki Philippines will follow through with the expectations we have set for ourselves as a company.
Hopefully as well for the Philippine automotive industry as a whole, the slight boost in economy this year brings along improvements in sales and revenue. Our industry needs all the help we can get.
Additionally, with the imposition of the Safeguard Measures Act, I’m hopeful that the government will continue to collaborate and provide its kind assistance to business owners in need of support. May we continue to work together, even more so during these trying times.
President and CEO
WE HOPE the economic condition begins to recover and start to normalize so that consumer demand and jobs can start to come back. Widespread and fast implementation of the COVID-19 vaccination is the only real resolution to end the pandemic and jump-start the economy.
President and CEO
Sojitz G Auto Philippines
DESPITE the very unpredictable situation now in the country, I would like to believe that 2021 will be a fairly good year for the Philippine auto industry. Based on the American credit rating agency Fitch Solutions, the Philippine economy will grow by 7.6%. But still, we are managing our expectations as Japanese financial holding firm Nomura projected that GDP growth will be slowest in the Philippines and Thailand among the ASEAN countries. Given this, I am confident that the past year has taught us valuable lessons in running the business and keeping it afloat amid the pandemic.
For our part, SGAP will be more aggressive this year in expanding our dealer networks to at least 28 outlets at yearend and promoting our core models such as the Coolray and Okavango. We are seeing that around 95% of our sales projection for 2021 will be generated by these models.
In 2020, the pandemic plunged the global economy into recession. The country’s GDP shrank 9.5% which is the worst GDP contraction since 1947 after World War II. The lessons the past year has taught us in running the business during a pandemic will play a vital role in realizing our strong hopes for this year — from reorganizing our operations and expenses depending on the country’s economic status, to strategic and flexible product planning that cater to the customers’ current need amid the pandemic.
WILLY TEE TEN
Autohub Group of Companies
Philippine Automotive Dealers Association
WE ENDURED two hard lockdowns and a series of community quarantines. Now we’re experiencing a surge of cases again due to different coronavirus variants — not to mention our nation’s problem with the acquisition of vaccines. There’s also the anxiety and fear that come with which brand to choose.
Having said all that, what’s next for us in the automotive industry? How are we going to cope with these challenges while we face the bigger ones ahead?
The year 2020 was really difficult for all of us. We’ve exhausted most, if not all, our means to be able to survive this global pandemic. It lead to several dealership closures, downsizing of existing showrooms, and significant reduction of manpower while shifting most of our means to digital.
Now, we need to find solutions on how to at least stabilize our sales performance with the people who can really back us up in these trying times. I hope that the banks can be more aggressive in approving car loans so we can improve our sales figures. I am hoping too that the government will retract the safeguard duties imposed on our units.
And of course, we are all hoping that new COVID-19 cases will decrease, and hopefully be solved soon so the economy can totally reopen. At this point, we need all possible help from the banks, the government, our clients — so we can keep our businesses running and rise together in 2022!
I am looking forward to the recovery of the Philippine automotive industry this year. The automotive sector is one of those severely affected by the pandemic with a 40% decline in industry sales in 2020. At Ford, we will continue to work with our dealer partners to expand access of our Ford vehicles to more customers through relevant offers and deals.
We will also ensure that the necessary safety and sanitary protocols remain in place in our Ford showrooms. With these efforts, we hope to be able to contribute to the industry’s path to recovery in 2021 and beyond.
SMC Asia Car Distributors Corp. (BMW Philippines)
I THINK I share the sentiment of my colleagues when I say that I would like to see the automotive industry achieve full recovery. However, with the number of COVID-19 cases rising again in the last week, it may be quite difficult to be optimistic about 2021 — despite seeing some semblance of recovery since the last quarter of 2020.
In the short term, what we need is to stabilize our supply. The global shortage of semiconductors has greatly affected automotive manufacturing and this has led to the unavailability of certain models.
In the long term, the Philippine automotive industry needs to reach a level of stability where we can start to see consumers return to comfortably visit dealerships and test-drive vehicles without any qualms about their personal health and safety. Of course, the only way to achieve this is by reducing the numbers of COVID-19 cases in the country.
Each of us must play our part in overcoming this pandemic. Let us continue to practice good personal hygiene, avoid unnecessary trips to minimize public exposure, and always follow the local health guidelines. With the impending arrival of the vaccines, we must also take the time to educate ourselves so we can weigh our options and make a well-informed decision. Our individual contributions, no matter how small, will benefit us greatly on our way to becoming a healthy nation.