VW distributor pursues 5-year plan to jack up sales

MANILA, Philippines–Ayala Auto Holdings Corp. is embarking on an aggressive five-year program to ramp up sales of Volkswagen vehicles in the country to about 7,000 units by 2018, and enable the German brand to become a significant player in the Philippine automotive industry.

A significant sales volume will help make it easier for the Ayala group to convince the Volkswagen Group to consider the Philippines as a potential assembly or manufacturing hub in the region, said Philip S. Orbeta, chair and president of Ayala Auto Holdings.

Speaking to reporters Friday night, Orbeta disclosed that Volkswagen had already short-listed Thailand and Indonesia, the two biggest car manufacturers in the Asean, as possible locations of its assembly operations in the region.

The Philippines, where Volkswagen has just reestablished its presence, was volunteered by Orbeta to be included in the group’s study of possible hubs in the region.

It can be recalled that the largest automotive manufacturer in Europe reestablished its presence in the Philippines only in 2013, as the company had targeted to further expand and cement its presence in the Asia-Pacific region.

“Volkswagen is on the lookout for a site where it can locate its manufacturing operations, and  all Asean-member countries are trying to win it. We hope that the Philippines will have a more attractive incentive program to attract the likes of Volkswagen to consider the country,” Orbeta said.

“The Philippine government has to say that auto manufacturing is a priority so it can provide the necessary government support. We will be going up against Thailand and Indonesia, which have very attractive incentive programs,” he explained. “That is what the government has to compare. We’re in a very competitive situation. As it is, there are car manufacturers here that haven’t grown and yet they have doubled or even tripled their capacity in Thailand.”

Orbeta added that the $600-million incentive package being dangled under the proposed Comprehensive Automotive Resurgence Strategy (CARS) would not be enough since having a successful program would require, apart from incentives, the availability of land and utilities as well as suppliers network to form the critical supply chain.

Last year, Ayala Auto Holdings was able to sell about 600 Volkswagen units. It targets to  triple sales this year to about 2,000 units and eventually ramp it up to at least 7,000 units by the end of the five year period.

The Ayala group will also be launching in the country two models this year, namely, the Golf and premium executive car Passat, bringing to eight the total number of Volkswagen models available in the Philippines. Currently available are the Volkswagen Touareg, Tiguan, Touran, Jetta, Polo and the Beetle, whose prices range from P850,000 to P4.3 million.

Orbeta further disclosed that the company was planning to open two new dealerships this year, one might be in Pampanga to cater to Northern Luzon customers, and the other in either Davao or Cagayan de Oro, for Mindanao customers. Amy R. Remo