Good and bad signs for the local automotive industry

I recently attended the press conference launching the Fourth Philippine International Motor Show (PIMS), organized by the Chamber of Automotive Manufacturers of the Philippines (CAMPI) and to be held on August 16 to 19. A total of 13 car companies were represented in the event, including BMW, Kia, Mercedes-Benz, Chrysler, Dodge, Jeep, Toyota, Lexus, Isuzu, Suzuki, Honda, Nissan, JMC and Mitsubishi.

While there is a variety of car shows in the country, there is only one trade and industry show focusing on brand-new, OEM equipped cars for future release, which is the PIMS. Less enthusiast base and more for the academicians in fact, especially for consumer and industry watchers.

Others are enthusiast events that feature a lot of modified, customized, tuned and even race cars, plus cars not normally available for sale in the country.

With a slogan following the Department of Tourism’s “It’s More Fun in the Philippines,” PIMS 2012 has adopted “Driving the Fun” as its own slogan. The event advocates two primary things: the renewed development of the Motor Vehicle Development Program, which aims to increase competitiveness of the automobile industry and affordability for the mass market as well as the advocacy of environment-friendly motoring called My Drive + Earth.

But what was interesting is that a day prior to the CAMPI press conference, Ford Group Philippines announced their pull-out from the manufacturing and assembly of Ford and Mazda vehicles in the Philippines, in line with an overall global restructuring program aimed at increasing efficiency for the struggling global player. Sales, marketing and distribution of Ford and Mazda vehicles will indeed continue, but 250 FGP employees will lose their jobs with the closure of the factories in Santa Rosa, Laguna.

And yet, the rest of the car-makers present were still upbeat in their forecast of the motoring industry for 2012 and beyond, citing a large number of reasons such as steady growth and demand of the Philippine economy, brought about by direct foreign investments, fiscal policy changes, a stricter policy and enforcement on smuggling and the used car importation ban as well as, plus the all-important OFW remittances, which drives up public consumption particularly in real-estate and automotive sales.

I asked them whether we shall see vehicles entering our country being able to give a better value, and which are safer, more efficient and more enjoyable product for the masses. Toyota’s president, Michinobu Sugata, politely answered, saying that production costs, as well as long-term maintenance costs, are a balance manufacturers try to maintain with regard to selling cars with better safety equipment in particular. Airbags, for example, should be changed 5-7 years from the manufacturing date in order for them to remain effective, yet cost an astonishing $500 each perusing various online parts stores. Surely, this cost is not something an owner of a 5- to 7-year-old car will want to be saddled with. But surely as well, small things like standard fog lamps and auxiliary driving lamps, stronger alloy wheels with better all-season tires aren’t too much to ask to be made standard in all cars?

CAMPI president Rommel Gutierrez also stated that there are still opportunities to be made for entrepreneurs in the motoring industry, particularly in the supply side of original equipment for manufacturers. Small items like fluids, tires, batteries, electronic accessories and the like come to mind. But of course, they all need to pass the standards set forth by car manufacturers.

CAMPI sees a 9-percent growth in overall vehicle sales this year, as last year’s overall sales were artificially low due to the Fukushima incident and the flooding in Thailand. But other sectors expect an even higher growth rate, as much as 12 percent.

In the long-term, CAMPI hopes that PIMS will grow into a major tourist-attracting event itself, much like the Tokyo Motor Show, which attracts over a million people to its event every two years, making it the biggest car show in terms of attendance worldwide. This will take time of course, but if CAMPI and the member-car manufacturers are able to come up with an event that displays various concept cars, regional releases and launches and the like, I can’t see it not happening someday soon.

Let’s hope there will be more manufacturers coming into the country, as this will show trust and commitment to our automobile industry and the buying public. After months of shy smiles and the silent treatment, word is out that PGA Cars has officially secured the rights to Bentley, the last brand of mass-produced luxury vehicles under the Volkswagen Group. It already has Audi, Porsche and Lamborghini in its stable. But what about Volkswagen itself? Lotus Cars have also started informal talks with a local distributor and a major player in the industry. A deal is set to be made soon, where it not for the financial troubles Lotus is undergoing at the moment. I’d be excited, but I don’t fit in an Elise/Exige. Perhaps the new Espit or even the Evora will suit me well.

We’re waiting to hear what the Association of Vehicle Importers and Distributors, which is a break-away group from CAMPI, will say and do.