So after coming off a high, the Philippine car market has pretty much defined the direction of where all its new cars will be headed to. We’re talking vehicle types, style trends, power-plant preferences and even enthusiast’s platforms for tuning and modifying.
First are the vehicle types. Post “Ondoy,” people have started looking into ladder-frame based SUVs, pick-ups and compact cross-over SUVs for their added ride height, ground clearance and flood-wading abilities. Forget off-roading, people just really want to be able to drive normally even through the most challenging of floods and pothole-ridden roads. As an example, last year’s best-selling vehicle, the Toyota Vios at 15,391 units, was closely followed by the Mitsubishi Montero Sport with sales of 12,247 units. Considering that the Vios enjoys fleet sales for taxis and company cars, it’s amazing how an SUV that easily costs more than double closely trailed the best-selling sedan in the market and number one selling private vehicle.
Now comes the new generation of CRDi and VGT equipped diesel engines. Surprisingly, it is the Koreans and Germans (particularly Audi, BMW and Mercedes-Benz) making huge leaps forward in terms of power, efficiency and environmental friendliness. Hyundai’s SUV duo of the Santa Fe and Tucson have been storming the new car sales market for the past few years, and it is only now that the major Japanese manufacturers such as Mitsubishi and Toyota have made huge strides forward in bringing CRDi enhanced turbocharged diesel torque to the masses. But unfortunately, according to Arlan Reyes of Mitsubishi Motors Philippines, until diesel fuels become as clean and as high quality as that of diesels in Europe, our diesel-powered cars will never truly reach Euro IV or better emissions standards. The engine technology is here, but the fuel isn’t quite there yet. Lawyer Johnny Arcilla, CEO of Covenant Car Company, expects Chevrolet Cruze sales to pick up more so this year, thanks to the introduction of the diesel-engined Cruze variant, aiming squarely at the old Ford Focus TDCi hatchback and sedan, both vehicles long in the tooth and their replacements having been already unveiled in Europe.
For first-time car buyers, the market has never looked better. We’ve got stalwarts from Honda, Toyota, Hyundai, KIA, Ford and Mazda, with variants ranging from a low of sub 600k to just under 800k for well-equipped variants. And top models pushing past the 800k mark. Worth it? You bet. Both the Honda Jazz and the Ford Fiesta are the most exciting, versatile and highly desirable cars you can ever buy at any price range, and are loaded with all the safety features you would never have expected available in a car in this segment and price range.
The high-end market is also booming as well, despite representing no more than a maximum of 8 percent of the overall market by the best estimates. Post JPEPA, the Japanese carmakers such as Lexus, Toyota, Mitsubishi, Nissan-UMC and Subaru have enjoyed renewed vigor in the market. But The Lexus ES350 has been selling briskly according to Daniel Isla, LMI President since JPEPA was introduced and has been the brand’s best-selling model, followed by the Lexus RX SUV. However, CATS Chairman Greg Yu also recently reported that CATS, particularly Mercedes-Benz, enjoyed a banner year in 2010 with sales of their Mercedes-Benz C and E-Class models selling fast, thanks to aggressive discounting and marketing promos.
Best year in sales
By the end of 2010, Mercedes-Benz has sold 596 units, enjoying its best year in sales for a while as well as growth, thanks to new products. AMG Variant Mercedes-Benz has also sold very well in recent months, and the retro SLS AMG Gullwing coupe, a sportscar that sells between P15 million and a shade over P20 million depending on options, has sold over 10 units since its introduction locally according to marketing and PR executive Grace Enriquez of CATS Motors. Neighbors in Stuttgart, as well as in Edsa, Porsche Philippines Executive Director Robert Coyiuto III mentioned that they have sold well over 600 Porsche Cayenne SUVs since its introduction from the first generation and continue to sell well. The introduction of the diesel Cayenne SUV should further boost sales.
As for the four-door sportscar that is the Panamera, a car people have called challenging at best to look at, has sold well over 100 units already, the vast majority being the V8and Twin Turbo V8 versions. A more powerful and more exclusive Panamera Twin Turbo S is slated to be released in the next few months and should also help boost sales further. Audi also enjoyed a banner year with 310 cars sold, a growth of 54 percent from the previous year but could have sold more if they received more allocation of units according to PGA Cars-Audi Motorcars Philippines Inc. director for corporate affairs Amado del Rosario. However, the Alvarez-led Asian Carmakers Corp. still leads the total vehicle sales with BMW’s selling 664 units in 2010, thanks to a full-model line-up of cars and SUVs.
High-performance shouldn’t come at a very high cost as well, as the Hyundai Genesis coupe has sold very well since its introduction and the rally-replica Subaru Impreza STI sedan has sold just under 100 units since its introduction in Spetember 2010 up until the first week of June according to Giovanna Marcantonio, marketing executive at Motor Image Pilipinas, distributors for Subaru in the country. That doesn’t include the hundreds of STI hatchbacks they’ve sold over the years, as well as previous generation STI sedans since Motor Image’s opening a few years back. Rally-replicas rule the enthusiast’s list for affordable performance cars.
New brands coming
New brands are also coming in the next few months are Ferrari from Formula Sports led by the father-and-son tandem of Willie and Marc Soong, Lamborghini, owned by Audi and part of the VW Empire will be brought in by PGA Cars’ Robert Coyiuto, while Volkswagen itself is still under negotiation. It seems that the powerful and influential Ayala Family are keen on getting it, but the logical choice would be the Coyiuto Group because they already have most of the VW brandsm, save for Bentley (which apparently might change soon enough as rumors have it that British and German Bentley Executives visited our country recently), Skoda and SEAT as well as Volkswagen itself.
So who are the big losers in the industry? The traditional sedan market is slowly shrinking. Think Altis, Lancer, Civic, Sentra, etc. Next is the executive sedan size dominated by the Camry, Accord and Teana. Everyone is either going up-market to bigger, more luxurious cars from big-name marquee brands, or to SUVs. Some are going to smaller, compact sedans and hatchbacks because they are cheaper, offer more versatility, are more fuel-efficient, or people are just buying more cars to do more specific tasks: a small car for commuting every day to school and work, while a bigger, diesel pick-up or SUV for out-of-town trips, hauling serious cargo or working in job-sites outside of Metro Manila.
It seems that our roads just don’t fit typical sedans anymore. Of the brands, Nissan Motors Philippines seems to be losing massive ground and market share due to a general lack of diesel-powered vehicles, a small car, and missed out on importing the Nissan R35 GTR, of which gray-market importers have imported over a hundred units already. It’s sad because the GTR qualifies perfectly for JPEPA, along with the Nissan 370Z sports car. Honda has also lost massive ground to their competitors due to a very conservative marketing and sales effort over the past few years, plus a lack of a suitable diesel-powered vehicle. Hopefully things change soon for Honda as the aging Civic and CR-V are being supported by the Honda Jazz, City and Accord, which itself is doing OK but in a shrinking market.
Gasoline-fed V8 SUVs such as Expeditions, Suburbans and the like have also taken a massive hit. People are flocking more to premium diesel SUVs such as Toyota’s LC200 Land Cruiser, Audi’s Q7 TDI and the BMW X-line of diesel SUVs. The premium SUVs offer greater performance, resale value and driving enjoyment compared to the traditional American SUVs.
Lastly, vans and MPVs are making a comeback. The Toyota Alphard is selling quite well, and the Hyundai Starex line-up sales remain strong as ever.
The market has spoken, SUVs diesels and high-end marquee brands have been making all the right moves and noise this year. The Japan tragedy has slowed down imports of CBU vehicles from Japan as well as CBU vehicles made elsewhere but source their parts in Japan, but the JDM brands are optimistic that things will normalize by the third quarter of this year.
The market looks to grow toward this direction for the next five years at least. So what car will you be buying soon?