The Philippine Automotive Industry is On The Road to Recovery

Automologist HAROLD is optimistic about the future. 

There is reason to be happy if you are in the Philippines. The domestic automotive industry is showing great signs of recovery and resilience. Let us not be affected by the negativity emanating from the understandably strained health sector, the mainstream media who benefits from sensationalized reporting, and the politicians who is manipulating the situation for their own benefit.

Just among the top 10 best-selling brands from January to September 2021, 194,975 cars and light commercial vehicles (LCV) were sold, which is 25.7% higher year on year (155,148 in 2020). And the September 2021 sales is 35.9% higher than in August 2021. If these trends continue, we will be back to pre-Covid levels in 18 months, not 100 months as “prophesied” by the economic doomsayers.

Meanwhile, newcomer Geely had a 222% increase year on year and the lacklustre Kia experienced a 107% increase. And these two are just the smaller players. Look at numbers for some of the leading brands: Ford had a 57% increase over the same period last year; Toyota, 46%; Isuzu, 43.3%; and Suzuki, 40.2%.

In terms of the market share for the first 3 quarters, Toyota’s increased from 41% last year to 47% this year and Ford’s from 6% to 8%. Unfortunately, Hyundai took a dive from 8% to 4%, followed by Nissan from 10% to 7% and Mitsubishi from 17% to 14%, but Mitsubishi’s actual sales this year was slightly higher than during the same period last year, unlike Hyundai and Nissan who saw a sharp decline in sales volume.

So what are the main reasons that there are great gainers and major losers? I believe there are two:

Firstly, new and in-demand models: Toyota had a small compact car “Wigo”, the perfect answer to a paralyzed public transport system; Ford had the new China-made “Territory” which is the cheapest good-looking Compact SUV and an American brand at Chinese price; then Isuzu had the “Traviz” and Suzuki had the “Carry”, the LCV needed for the burgeoning online and logistics business. On the other hand, Nissan did not have new models until a few months ago and Hyundai had no new models launched in the Philippines for the past 18 to 24 months.

Secondly, the top 4 – Toyota, Ford, Isuzu and Suzuki – were aggressive despite the pandemic. They came up with products, programs and promo to increase market share. What a great time to increase market share when all the other brands were hibernating in lockdown. Nissan was the last to get their staff back to work physically and get out of the work-from-home slumber. Hyundai has been going through an ownership change issue for the last 2 years, making the distributor a lame duck.

Recovery is not a destiny, it is a choice. I was told that the Chinese character for crisis shows “Opportunity in Difficulty”. In these difficult times, the key is finding and exploiting the opportunities.