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Industry Outlook
The automotive and transportation industry in
the Philippines is vital to national development and a
strategic component in economic pla-nning. The industry therefore has
wide ramifications for the govern-ment, for business
entrepreneurs, and for the motoring public. The per-capita
ratio (no. of veh. per person) in the Philippines is 25:1
while that of the United States is almost 1:1 - thus the truism that
the more-industrialized the country is, the higher its
per capita vehicle ratio.
Trend and Business Impact
There are now over 4 million vehicles registered with the Department
of Transportation and Communications (DOTC), per Autostop 2000, a trend-watcher
of the Philippine motoring scene. This is a 25% gro-wth since
1997, whom many consider to be a banner year
for the Philippines because it marked the first time vehicle registrations
brea-ched the 3-million mark. Averaging about
10% for the period 1972-1997, the automotive industry has slowly
edged its way up to a res-pectable growth rate of 16% per annum. With
the country's comb-ined exports and imports of automotive
parts projected to reach US$ 4.5 billion in the next four
years, the business opportunities cre-ated by the trend is tremendous.
The Philippine government envisions the automotive sector to be a world-class
producer and exporter of automotive parts and components.
Challenges and Opportunities
Even before the 1997 economic meltdown in
Asia, automotive lea-ders already recognized the need to be more aggressive,
especially in after-sales service in order to survive. Other
than being customer-oriented, they correctly
anticipated what was then a rising market for the SUV and LCV - the
vans, the pickups, the utility trucks (AUVs). Not even the 9/11
attack seems to have fazed the practical-conscious Filipino buyer. Where
before passenger cars accounted for nearly 40% of the total
vehicle sales, now light commercial vehicles ac-count
for 70%. Honda is the biggest vehicle seller by industry in the passenger
car category, with Toyota next. Nevertheless, the car mar-ket has been
on a decline since 1999 (now only 30 percent of the en-tire industry
sales) while commercial vehicles shot up to 70%. 40%.
But uncertainty
and complaints abound. The vehicle assemblers - long the "milking
cow" of the government for revenue - is again up in arms, warning
of the "devastating effects on the automotive industry and rel-ated
industries "if the government shall push with plans to ex-pand
the coverage of excise taxes. The Chamber of Automotive Ma-nufacturers
of the Philippines (CAMPI) with its allied organizations
recently petitioned the Office of the President to suspend the
oper-ation of vehicle auctions (read: smuggling) presently
proliferating all over the country.
The country is not alone though. In the huge U.S.
market into whe-re Japanese and European cars come in as cheap
imports, Forbes Global
is less sanguine about the situation of the Big Three - Ford,
General Motors, and Chrysler. Their combined market share
has steadily been falling, from 72% to 60% since 1998 to
the present. Still, just like the Philippines, U.S. carmakers are hoping
for a turn-about -- soon.
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Hi! I'm
Ildefonso. My friends call me Ilde or Nene.
The old 1999 format has been redesigned, thanks to Jessie.
The emphasis now of this site is not only in providing useful information
vis-a-vis the auto-motive industry but also in surviving
the economic crisis. Am including here more articles on effective management
and leadership, since these seem to be the
keys to the survival and recovery of the industry.