Now in the middle of the third week of the scheduled four-week mandatory enhanced community quarantine for the entire expanse of the main Philippine island of Luzon, automobile companies such as the Lica Auto Group are looking more closely at their business continuity prospects. They have determined that, in the race to get business up to speed again, servicing will be the first out of the gates.
“Service will recover first with the huge pent-up demand. People will still be hesitant to buy new cars, but they will (still) come to the dealers. Maybe (they) will be more conservative, perhaps move towards (buying) practical cars. Maybe this is the opportunity for China cars to capture market share,” quipped Bingo Limcaoco, chairman of one of the largest automotive retail and service companies in the Philippines.
The enhanced community quarantine has also been extended to other parts of the Visayas and Mindanao regions, as increasing numbers of areas report their own spikes in cases of the Coronavirus Disease (CoViD-19).
The forced and widespread shutdown of operations of non-essential operations, including those in the automobile manufacturing industries, has affected large-scale dealers such as the Lica Auto Group. The company boasts of being the country’s leading group of multi-brand full-service car dealerships. Its franchises include Nissan, Chevrolet, Hyundai, Kia, and Suzuki. On average, the group claims in its website licaauto.com, it attains the 1st or 2nd largest market share for each of the brands it carries, and delivers services through multiple branches for each brand throughout the country. It also developed Shaw Auto Nation, the country’s first car dealership integrated shopping complex, and the SLEX Auto Nation in the South Luzon Expressway.
The Lica Auto Group is also into dealing in used cars, car leasing and rent, parts and equipment distribution, and auto servicing. It claims to be the largest integrated service center chain in the country with numerous branches of Rapide Auto Service centers in Metro Manila. It is the exclusive country licensee of the world’s leading car rental brand, Hertz Rent-A-Car. With several distribution centers and wholesalers nationwide, Lica Auto Group is also a major auto parts and lubricants distributor, carrying brands like AC Delco, Mann Hummel, and Purolator.
Unfortunately, the very nature of its business and the massive scale of its operations also make Lica Auto Group especially vulnerable to the extremely restrictive economic situation.
“If a recession in the Philippine economy (does ensue), unfortunately, (the business of) cars will be considered discretionary or non-essential. Sales of automobiles will be severely affected in a recession,” said Limcaoco.
Lica Auto Group EVP-COO Doroteo Sornet, however, says that this situation in 2020 isn’t the worst that he has seen.
“I still believe the worst (for the Philippines) was in 1984, when all the distributor brands closed in the Philippines. It took a while before they returned.” Sornet was referring to the sociopolitical turmoil of the pre-Edsa Revolution years, when political instability forced even auto giants like Toyota and Mitsubishi to close shop.
“(CoViD-19) will also hurt the industry, but I still believe it will recover, gradually. The availability will suffer for a while, since the manufacturers where we source our cars will also be affected,” he said. Unlike 1984, Sornet says that this would be the first time in global automotive history that all auto companies will be affected simultaneously.
The LICA Auto Group claims to be the largest integrated service center chain in the country with numerous branches of Rapide Auto Service centers in the metropolis. It is the exclusive country licensee of the world’s leading car rental brand, Hertz Rent-A-Car. With several distribution centers and wholesalers nationwide, Lica Auto Group is also a major auto parts and lubricants distributor to the ever growing service center industry, carrying brands like AC Delco, Mann Hummel, Purolator, and a lot more. Lica Auto Group encompasses the car dealerships and the aftermarket business of Lica Group.