The MIAS amid the Japan crisis

ON THURSDAY morning, the 7th Manila International Auto Show (MIAS) will open its doors to nearly 24,000 square meters of indoor and outdoor space at the World Trade Center and the adjacent Philippine Trade Training Center to display the latest and the future in automotive evolution and technology. However, the festive mood will be shadowed by the killer earthquake and gigantic tsunami that hit northern Japan four weeks ago and severely damaged that country’s economy, psyche and industries— especially the auto industry.

Rolling power blackouts, ruined infrastructure, crippled internal transportation and the worsening nuclear crisis have disrupted the carmakers’ production and supply chain so much so that a critical shortage of some replacement parts that are made in Japan but are used globally for repairs and maintenance work is looming. Toyota, the world’s largest car manufacturer, identified last Monday 183 replacement parts including shock absorbers, radiator supports, fender components and oil seals that won’t be produced for at least 30 days due to the significant damage sustained by suppliers’ plants. As of the end of March, the quake had caused a loss of production of 450,000 vehicles in Japan.

Although many Japanese brand vehicles are assembled in the Asean including Thailand and the Philippines with some locally sourced parts, the CKD packs still come from Japan. The local assemblers’ inventories of parts will run out sooner or later. Other car brands such as Volvo and General Motors also source some parts from Japan, thus their manufacturing operations are also affected.

Given the uncertainties in the supply of parts if not the importation of CBU models, should the MIAS, which aims to increase car sales, still be held? Here are the thoughts of some car company presidents, a number of which are not participating in the MIAS:

LEXUS MANILA PRESIDENT DANNY ISLA: “The motor show can go on in fairness to other automotive players. Besides, I see no moral or ethical issue in displaying Japanese-made cars because Japanese brands will continue to be sold albeit a temporary slack. It was by choice that Japanese manufacturers, like Toyota and Lexus, suspended production in the meantime to focus their priority on ensuring the safety and wellbeing of their employees. Resources were mobilized to assist the victims of the earthquake. Social responsibility was prioritized over business in the period following the massive earthquake. Japan will prove its resiliency soon.”

FORD GROUP PHILIPPINES VP STEVEN TAN: “MIAS must definitely go on, more so in light of the Japan situation. MIAS promotes the auto industry, an industry that provides jobs for local manufacturers and parts suppliers. The supply chain includes suppliers in Japan. More than ever, Japan needs all the support from everybody. A Japanese economy that gets back on its feet ultimately supports more jobs for Filipinos as well. MIAS must go on.”

CHEVROLET PHILIPPINES TCCI MANAGING DIRECTOR AND CEO ALBERT ARCILLA: “The MIAS is a venue where the manufacturers like Chevrolet have an opportunity to present to the market their offers so the consumer can check all the models and options for a more comprehensive evaluation of the product offers and decide which offer best works for them. We saw the discipline the Japanese people exhibited amidst the unfortunate event. We also witnessed how determined they are to get up and restore their lives as quickly as they can. I believe by perking up the automotive industry, a major industry in Japan, through a well-staged event like the MIAS will complement their determination to revive their economy. Staging the MIAS at this time will not only be helpful to the exhibitors and consumers but will also be a statement that all brands are together in uplifting an industry that would be critical to Japan’s quick restoration.”

CATS MOTORS (MERCEDES-BENZ, CHRYSLER AND JEEP) PRESIDENT FELIX ANG: “There are only six Japanese automotive brands, namely Honda, Suzuki, Subaru, Mitsubishi and Mazda that will participate in the MIAS out of the total of 27 participants. While we sympathize with the Japanese, we think that the MIAS should proceed as planned since the majority of participants are non-Japanese brands, which can take the opportunity in the MIAS to relate to their target markets and those involved in the auto industry.”

NISSAN MOTOR PHILIPPINES INC. SVP VAL DE LEON: “Any motor show for that matter should continue to be held in Manila since its primary thrust is to perk up the economy. The Campi-initiated Philippine International Motor Show has been very successful in making the general public aware of the achievements of the auto industry and the enormous contributions it has made to the overall economic growth. In fact, I personally feel that the Tokyo Motor Show scheduled in November this year should push through despite the tragedy Japan experienced after the earthquake and tsunami since this will be viewed as Japan’s desire to recover from its enormous loss.”

HYUNDAI ASIA RESOURCES INC. PRESIDENT AND CEO MA. FE PEREZ-AGUDO: “While we cannot downplay the financial and economic effects of the Japan crisis on the global and Asian economies, it should not derail business activity and dampen efforts to restore investor confidence. Japan’s economy will recover as rehabilitation efforts accelerate. The continued conduct of MIAS should be able to demonstrate that there is business optimism in the manner and pace by which Japan will reflate its post-crisis economy and thus lend a more positive investment outlook which is critical to reducing uncertainty in global and Asian markets. We are making the recovery in Japan easier by showcasing our industry’s wherewithal to continue to inform and offer our markets with innovations and approaches to bring about sustainable mobility for all.”