Philippine Automotive Dealers Association President Willy Tee Ten says ‘good sales’ don’t mean the same these days
AS THE DAYS dissolve into each other almost imperceptibly, it seems we but blink and find that month or more have passed us by. This is just one of offshoots of a pandemic that has mired us in disbelief, sorrow, and difficulties.
The month of May might as well be yesterday. Certainly, the words that Philippine Automotive Dealers Association (PADA) President Willy Tee Ten uttered in a speech for an online event staged by Melbourne-headquartered Pentana Solutions, a company specializing in “the development and supply of automotive software tailored to the needs of dealerships,” still ring raw and true.
“The only way for us to recover is for everyone to be safe in the streets, and that means being vaccinated,” he said to an international audience then.
On its website, Reuters reported that new infections in the Philippines is now averaging a high of more than 17,300 daily. We recently breached two million infections, and more than 33,000 have passed on due to COVID-19.
The news organization also revealed the “Philippines has administered at least 34,112,320 doses of COVID vaccines so far. Assuming every person needs two doses, that’s enough to have vaccinated about 15.8% of the country’s population.” Health officials have expressed optimism that the country will realize the 70% inoculation target toward herd immunity by the end of year, although some experts insist that March 2022 is a more realistic projection.
So we keep at it — trying to live each day we’re blessed as best we can, while (hopefully) also looking after our friends and family by being mindful of health protocols and, yes, by getting vaccinated and encouraging them to do the same.
In the meantime, businesses are understandably reeling — some more than others. The automobile industry, which had a 40% freefall in sales last year following multiple years of sustained growth. Auto executives we’ve had a chance to interview are widely expecting 2021 to be a recovery year, and year-to-date reports from the Chamber of Automotive Manufacturers of the Philippines (CAMPI) and Association of Vehicle Importers and Distributors (AVID) seem to suggest the same.
But with almost four months still left in 2021, can the sector really sustain the momentum, particularly in light of tighter quarantine restrictions? We catch up with Mr. Tee Ten, who not only heads PADA which represents more than 100 dealerships, but is the president of Autohub Group with more than 20 automotive brands in its care.
TALK BOX: How are PADA members doing at present? What are dealers’ biggest concerns during this pandemic?
WILLY TEE TEN: The biggest concern is the drop in car sales, which results in discounting — affecting the bottom line. During this pandemic, the term “good” means sales are slightly below pre-pandemic levels. Some of the dealers are doing “good,” but a lot of dealers’ sales have declined so much. We are basically in survival mode. A lot of us are looking at how to reduce overhead expenses from each department. Being in the red is the norm. We at PADA have a Viber group where we communicate and compare notes. We hold meetings from time to time to catch up, but mostly have informal meetings.
The lifting of the safeguard duty is surely a welcome move from the government. How else can the government help the industry along?
The lifting of the safeguard duty was definitely a big plus. We hope car sales will recover, but the Delta variant is delaying the recovery even more. The help that we need from the government is to hopefully mandate everyone to get vaccinated (including booster shots) so that the economy can open up again. Push everyone to get vaccinated and give incentives to those who have had two doses.
The other part of the equation is the appetite or willingness of banks to issue loans. Are you satisfied with the loan approval rate? Are we still far off the pre-pandemic rate? Is PADA talking with bank partners toward a more favorable status quo?
We badly need the assistance of banks. More loan approvals would mean more car sales.
With the surge now, we need the banks to lower the interest rates of our wholesale line. But interest rates are not the issue or concern; it’s the number of approvals. Banks are too conservative now. And yes, we’re talking to the banks and requesting them to be more aggressive in approving loans.
Year 2021 is expected by both CAMPI/TMA and AVID to be a recovery year. What’s your projection in terms of sales growth?
With the surge of the Delta variant, not to mention the new variants coming in, it may not happen.
Per CAMPI and AVID reports, seven months into 2021, the numbers so far have been encouraging. However, the rise in new COVID-19 infections has necessitated tighter quarantine controls. How are dealers dealing with this?
The dealers are frustrated that this is happening. In 2020, the lockdown was at the first half of the year while 2021, the lockdown is in the second half.
What kinds of vehicles are registering the biggest growth this year?
Utility vehicles, for the most part, are posting good figures.
What about two-wheelers?
The premium two-wheel segment is doing very well, while the mass-market products are slightly below compared to pre-pandemic numbers.
There’s also an impression that the luxury market is on the upsurge. Are you seeing this also with your related brands or those in higher price points?
Luxury market vehicles are doing okay compared to the mass-market brands, but please note that the discounts are higher, too.
