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One of the biggest stories in the automotive industry right now is Tesla’s announcement that it is shifting its business model in the US (and around the world eventually) to strictly online car-selling. In other words, the American electric vehicle manufacturer is shutting down its physical stores in favor of an all-encompassing digital one.
I’m a fan of automakers that put up and operate a manufacturing plant in the Philippines in spite of the many challenges that come with it. Even if electricity and labor are relatively more expensive in this country than in other Asian territories, some car companies doing business here still choose to assemble a vehicle or two locally.
Last year, when Volkswagen Philippines launched five new vehicles sourced from China, many people were livid. How could a German automaker with a rich heritage foist Chinese-made cars on them? Anywhere but China, commented some of these consumers. Much of the feedback was so negative that it was hard to tell whether customers were upset because they thought Chinese products were inferior or because they hated the People’s Republic for entirely political reasons.
The fifth-generation Toyota Supra sports coupe is officially out. A legend has returned, the Japanese automaker proudly announces. If you ask many fans of both the brand and the model, however, there is nothing legendary about this A90 version. That’s partly because the car is underpinned by a platform co-developed with BMW, but also largely because it is powered by the German car manufacturer’s 3.0-liter straight-six gasoline engine -- essentially the same heart that toils under the hood of the equally new Z4 roadster.
In January 2008, I was wearing a white polo barong and standing on a vacant lot inside Bonifacio Global City. I was also watching the top executives of Toyota Motor Philippines (TMP) ceremoniously break ground for what would be the site of the first Lexus showroom in the country. Eleven months later, I was driving the RX crossover to Napa Valley in California as the sole media invitee of Lexus Philippines to its first overseas press drive.
It’s an interesting question that deserves to be debated in marketing classes. Which one is more important: to improve a company’s profitability or to stay true to its brand heritage? It’s a corporate quandary that I’m sure countless companies have argued over -- something that is quite common in the automotive industry.
The transport network vehicle service industry was rocked early last year when Singapore-based Grab acquired the Southeast Asian operations of bitter rival Uber, essentially kicking out the American transport network company from the Philippines and subsequently cornering the bulk of the TNVS business in Metro Manila. To me, however, this wasn’t the biggest news about Grab in 2018. As an automotive journalist, I found Toyota’s sudden involvement in the transport startup more intriguing.
The most accurate, most honest and most succinct assessment of the Philippine automotive industry’s performance in 2018 came from the unlikeliest of sources and at the most unexpected of occasions: BMW Philippines president Adrian Spencer Y. Yu at his company’s year-ending Christmas party for the motoring media.
If you’re into cars and have been observing the local automotive industry in recent years, this question may have crossed your mind: What the hell is going on with Kia?
Based on figures available from the Land Transportation Office, motorcycles sales are going through the roof -- quite expected considering their relative affordability, the horrible state of our public transportation, and the ever-worsening traffic situation in Metro Manila and similar city centers in the provinces. According to LTO records, there were a total of 1,408,835 brand-new motorcycles registered in the country in 2015, 1,572,322 in 2016 and a whopping 2,006,954 in 2017. And since 2018 isn’t over yet, the agency can only provide digits for the first six months of the year. Assuming the report is accurate, there were 1,093,044 new motorbikes registered from January to June this year -- which means 2018 is very much on track to surpass 2017.
Observing young kids today, I can say that “demotorization” -- the term used to describe the new generation’s loss of interest in automobiles -- might be real. When I was small, I was hooked on die-cast toy cars (my favorite brand was Matchbox) and boys my age hung car posters on their bedroom walls. That was the dream, to one day save enough money to purchase a nice little runabout.
How the mighty have fallen.
I’ve said in this column before that our worsening traffic situation is actually giving rise to new business opportunities for some enterprising individuals. That includes delivery service for food, packages and even groceries. Because a single errand can now easily eat up half of your day, you basically just prefer to stay at home or in the office and pay someone else to get or bring you whatever it is that needs fetching. For many of us, the fee for such a service is far cheaper than its time equivalent if we were to drive out ourselves.
You hear the term “sharing economy” a lot these days. It refers to assets and services that are literally being shared by different people, among whom no one is an owner. The most popular example of this is the ride-sharing service being offered by transport network companies like Grab. It’s like having your own car that’s available on demand, without you having to purchase the vehicle or pay for its operating costs (like fuel, parking, maintenance and insurance).
Was it just me or was the seventh edition of the Philippine International Motor Show held from October 24 to 28 a bit underwhelming? Was I just jaded or did the biennial automotive event have a generally soporific effect? Was I just under the weather on opening day or was the main exhibition hall a little too dull?
I have a confession to make: I kind of like the fact that fuel prices have breached P60. Both gasoline and diesel are expensive, and car owners are starting to flinch. That’s good, I think. If only rising fuel costs didn’t have a ripple effect on the prices of basic commodities -- a negative impact that would be mostly felt by carless households around the country -- I would wish for them to stay at their current levels.
The raging topic in Philippine motoring these days is the Land Transportation Office’s (LTO) renewed campaign against vehicle modifications. These include aftermarket wheels, tires, body kit, bumpers and LED lights. A rash of apprehensions were reported on social media last week by owners of modified SUVs. A reader even contacted me to say he knew of friends who had been stopped by the authorities before entering the North Luzon Expressway just because their vehicles had roof racks.
The first international motor show I ever attended was the 1997 Tokyo Motor Show (TMS) -- yes, more than two decades ago, if you’re fond of math. Let’s just say I caught the auto-show scene right at the start of the digital revolution. There was already Internet at the time -- there was also e-mail -- but the motoring press still preferred to cover the car show the old-fashioned way (read: with the help of analog cameras and bulky press kits). In fact, the TMS organizers even offered free courier service so international journalists could send dozens of their press materials back home.
In January this year, the official Facebook page of the local MG distributor posted the following declaration: “Only for the young. If you’re 40 and above, please buy other brands.”
When I saw the Ford Ranger Raptor in the metal for the first time back in February (in Thailand), one of my first thoughts was that its pricing would easily breach the P2-million mark. I was wrong, of course. At the super truck’s official Philippine launch last weekend, Ford announced the Raptor’s irresistible price tag: P1,898,000. Predictably, the amount sent pickup enthusiasts (even non-enthusiasts, actually) cheering and salivating.
I’ve been to Vietnam once -- about a decade ago, to be exact. At the time, I was pleased that the Philippines still had a more advanced state of transportation, judging by the Vietnamese’s preferred means of getting around. I’m referring to the motorcycle, which ruled the streets of Ho Chi Minh City during my visit like plunderers rule politics. It was my first time to be in a place where motorbikes far outnumbered cars. The ratio was like 50 to 1 (at least that’s what it appeared to me). Two-wheelers looked like ants that came from all directions and swarmed a bar of chocolate.
IN 2010, after years of driving through EDSA traffic from my house in Parañaque to my workplace in Quezon City (then later Mandaluyong), I decided to rent a condo unit next to my office building. This allowed me to walk 200 steps every day to report for work, while saving my car a lot of mileage in the process. In other words, I heeded the advice of living near my place of employment just to avoid the soul-sapping effects of driving.
UNLESS you live in a far-flung province and have never set foot in Metro Manila in the last few years, there’s a good chance you’ve already tried getting around using TNVS — or transport network vehicle service. It’s like riding a taxicab, but instead of hailing a public-utility car by the roadside, you do so from the air-conditioned comfort of your home or office, using an app installed on your smart phone. You probably know this service by the popular companies that provide it, like Grab (or Uber, before it sold its Southeast Asian business to Grab).
THANKS to accessible social-media platforms like Facebook and Twitter, information dissemination has been democratized. What this has done is basically cut the middleman (or traditional media, to be exact). In the past, if people wished to announce anything to the world, they had to go to a radio or TV station and then beg said station to let them go on air for one minute to make their statement (which was usually about a missing relative or a stolen vehicle). Today, anyone — and that literally means anyone (even a jobless freeloader who happens to have a smart phone) — can fire off a similar message online and the message may then be read by folks even halfway across the globe. For free.
Based on figures released by official channels, the Philippine automotive industry is going through a downturn right now in terms of sales. Compared to January-June numbers in 2017, first-half sales this year are fewer by some 25,000 units. That’s certainly a substantial six-month year-on-year decline by whatever yardstick you measure it against.
THIS year, the Filipino consumer has taken quite a beating with the passing of the Tax Reform for Acceleration and Inclusion Act as well as the global inflation. As the prices of fuel and basic commodities have shot up, car sales have gone down. Even profligate Filipinos know when to pinch their pennies.
I used to collect Casio G-Shocks. Not sure what I was thinking at the time, but amassing an assortment of colorful digital watches seemed cute then. So cute my collection made it to Piece No. 42. It was fun being able to wear a different G-Shock each day, the choice being mostly dictated by the shirt color I happened to pick from the drawer.
I dare you to truly wrap your head around this math: Two out of five brand-new cars that Filipinos buy today are from Toyota Motor Philippines (TMP). That’s 40%. An eye-popping number especially when you consider that more than 35 automotive brands — from the mass-market to the luxury — do business in the country.
Over the weekend, the automotive industry learned of the sad news about Sergio Marchionne being relieved of his concurrent roles as CEO of Fiat Chrysler Automobiles and CEO of Ferrari. This development came after the 66-year-old Italian executive had reportedly fallen into a coma as a result of complications sustained from his recent shoulder surgery.
I’ve attended more car launches than my deteriorating memory can accurately recall, but I can confidently proclaim last Sunday’s BMW M5 debut as the most amusing one. It wasn’t because of production value. In fact, there were no fog machines, no balletic dancers, no executives descending from the rafters. There was only a simple backdrop that visually framed the car and the podium beside it. Quite a spartan setup for the arrival of a P14,790,000 high-performance German sedan, to be honest.
Last week, I talked about some lawmaker’s wish to enact a bill that proposes the practice of telecommuting (or working from home). The desire is a natural offshoot of worsening traffic congestion. Stay home if you can. Stop adding to the problem. Makes sense.
One of the more popular bills to emerge from Congress in recent memory is the one that proposes to allow Filipinos to telecommute or work from home. With motor vehicle traffic not only in Metro Manila but also in other major cities in the country worsening by the day, not having to leave one’s house just to earn one’s keep is sounding more and more appealing with each passing week.
When I was filing my motoring website’s monthly industry sales report last week, I couldn’t help but think that the automotive business is indeed a product-driven one. The brands that presently have the best vehicles tend to perform well sales-wise. But these best-sellers come and go. It’s a cycle.
When Ford Philippines announced in 2012 its decision to stop assembling vehicles in the country, you just knew it was game over for our automotive manufacturing industry. Sure, Toyota, Mitsubishi and Isuzu are still making a few models here, but their production is only for local consumption, so the volumes involved will never be huge. Ford used to export locally assembled vehicles to other ASEAN markets, but even those were small in numbers.
We need to sit down and talk about an ugly truth in the automotive business: Many Filipinos who “buy” cars have no business doing so. And that’s because these “buyers” really can’t afford one. They just get enticed by insanely low down payments and the moronic desire to impress or keep up with the neighbors.
I ask the question because the market research firm Millward Brown has just released its annual brand equity report called the “BrandZ Top 100 Most Valuable Global Brands.” In it, the biggest companies in the world are ranked according to their so-called brand value. So first, a definition: What exactly is brand value?
I have spent more than two decades traveling the world attending car launches and driving the latest vehicles. For the most part, this is because the Philippine market has always been treated as a relatively insignificant territory vis-à-vis other countries that sell more cars. As far as product-planning is concerned, we have always been an afterthought.
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