Life, as they say, is not always a bed of roses. The automotive sector has been on a roll for about five years, hitting high numbers that many considered a renaissance for local motoring until the COVID-19 pandemic happened.
Sales have been on a roller-coaster ride for the first half of the year and no one knows when another upturn will happen again and for how long.
Inquirer Motoring asked the country’s top executives on how their companies are coping with the pandemic and current business downturn. Fortunately, most of the common feedback tends to focus on making sure their employees are given proper attention, job security and work from home flexibility. On the marketing front, there is a paradigm shift to going digital and some brands continue to be aggressive in introducing new models in today’s shrinking market. On a positive note, it seems that auto financing seems to be opening up a bit as well.
We let those handling the steering wheel do the significant assessments of where they’re coming from and heading for.
President, Toyota Motors Philippines
Toyota, being the biggest brand in the country is also no stranger to crisis management. As a global company, Toyota rallied all its distributors to conduct a Stop, Change, Continue strategy. “We had to stop or postpone a lot of our physical activities to prioritize safety. Then we changed the way we do things like maximizing work from home not just for TMP employees but dealer employees as well. Finally, we prioritized activities that need to be accelerated like digitalization programs. While we do cost-cutting activities, we also consider how we can help the community. So with limited resources, we extended support by producing face masks in our Sta. Rosa Plant, lending our test drive units for the use of medical frontliners when transportation was limited, and donating cars to the Health Department and government hospitals for their permanent use,” said Okamoto.
“We really had to be creative in doing sales and marketing. We launched products virtually so that it can reach a wider audience. We enhanced our website and mobile tools so that customers can have a more seamless experience in the safety and convenience of their homes. These include having a virtual showroom, chatbots, online service appointment, and online and new used car inquiries. Our dealers have also accelerated their online activities including standardization of websites and social media platforms, digital marketing training, live-streaming product explanations, and online inquiries and sales.”
During the recovery stage, Okamoto said that it is challenging to get an accurate detailed forecast of customer needs, and ensuring the availability of their preferred vehicle down to the variant and color at their preferred dealer. “As we have 70 dealers nationwide, a big part of supply chain efficiency is the agility of vehicle supply swapping to improve demand and supply matching.”
“We have very close communications with our regional counterparts, constantly aligning on various aspects like re-start operations, communications, digitalization. We have the strength of the good practices of all Toyota behind us. We are able to participate in Asia regional activities which are fully done online such as GR Supra GT Cup Asia, where, after three-months of nationwide online competition, we are able to award three champions which will make up GR Team Philippines. They will compete in the Asia Finals against Thailand, Malaysia, Singapore and India. Indeed, the world is getting smaller!” added Okamoto.
Roberto Coyiuto III
President and CEO, PGA Cars, Inc.
Even before the pandemic, PGA’s campaign specially on its Audis have led to gaining a sizable share in the luxury market thanks to its aggressive pricing and promos. These include seven-digit cash discounts in 2019 that gave them a healthy volume last year. Even this year, when they repeated the promo strategy, the campaign seems to have paid off.
PGA Cars focused on two main strategies—controlling the operating expenses through streamlining its operations but making sure employee welfare is well addressed and giving its customers the best value despite these trying times. “Rationalizing operating costs is always integral in any business strategy—no matter the climate. While it becomes even more crucial during extraordinary times, having put in place measures that ensured our customers’ safety, get the best value and that operations are streamlined, all while taking into account the welfare of the workforce, prepared us to cope with major disruptions with minimal adjustments in our fiscal position,” said Coyiuto.
He further added: “We are fortunate that the four brands which we represent in the Philippines—Porsche, Audi, Lamborghini and Bentley—all have distinct, powerful identities. This means each one of them also has a clear vision of its core competencies and corporate values, and thus has an equally coherent plan in terms of future products. While it is true that consumer behavior may be harder to predict in the next several months, the luxury sector is emerging to be more resilient than expected. This allows us to strategize the respective portfolios of our brands, ensuring these contain the models most relevant locally while managing stock inventory.”
Audi Philippines Head and President, Bentley Manila
“An anticipatory vision on future business practices has equipped us with tools with which to use in pivoting to digital processes. These are now proving to be especially beneficial in sales and marketing; the limitations in people’s physical movement call for increased reliance on various digital means in order to meet the market’s need for information and for access to our products and services. The pandemic accelerated the digital transformation we have embarked on, and we are adopting according to customers’ capacity and local online infrastructure.”
Ma. Fe Perez-Agudo
President and CEO, Hyundai Asia Resources, Inc.
“This is definitely the automotive industry’s toughest challenge yet as this pandemic has turned mobility upside-down. We faced our fears and joined forces like never before to create our own ‘Better Normal’ ecosystem within and beyond our organization. We had to restore consumer confidence quickly and decisively. But we cannot give what we do not have, so the priority was to restore the confidence of our employees and our dealership network. With this mindset, we effected Hyundai’s Guidelines for Protection and Safety (GPS) at the height of the pandemic—the first in the industry to ‘COVID-proof’ our offices, facilities, and dealerships.”
She also added that in the new normal, she always reminds everyone to forget about titles and ranks. “I have moved on from ‘CEO’ to ‘CRO’—HARI’s Chief Resilience Officer whose main job is to take a critical look at the organization, break down silos, clear up bottlenecks, and ensure that we all work smarter and more efficiently as one team.”
Recently, its Hyundai Modern Jeepney Class 3, based on the HD50S platform, was given a Certificate of Compliance for conforming to Philippine National Standards. This opens a significant opportunity and market for Hyundai to be the first to have a full lineup of modern jeepneys to serve the public.
On a positive note, it also recently received another citation as “Best in Aftersales Operations 2020”, besting over 50 distributors of Hyundai Trucks and Buses worldwide, sustaining HARI CV as the leader in After Sales service in the Hyundai global community for three years straight.
Atty. Albert B. Arcilla
President and CEO, Chevrolet Philippines and MG Philippines (The Covenant Car Company Inc.)
The Covenant Car Company, Inc. (TCCCI) has endeavored to keep the ongoing work stability of its stewards a primary objective during this period, despite having made numerous organizational adjustments with regard to physical business operations. These include transitioning to a largely work-from-home arrangement for our employees at TCCCI, while likewise improving our inter-departmental IT communication systems and digital onboarding for tighter coordination. Such work modifications have allowed us to maintain a high level of employee productivity and overall company efficiency given the current market landscape shared among local auto manufacturers.
On marketing and sales, he said: “Our brands—Chevrolet PH and MG Philippines—have long since integrated digital marketing into their individual strategies, most notably through numerous online awareness ads, digital lead generation campaigns, and a pronounced social media presence. We’ve always recognized that a large chunk of our target market spends a lot of time online, and our messages are refined so that we reach out to them and remain relevant in public conversation. We’ve also recognized the marked increase in online purchasing, and this has led to the development of our own web-based purchasing channels for both brands:Shop.Click.Drive.com.ph for Chevrolet PH, and BuyAnMG.com for MG Philippines. These new portals are designed to allow more people to quickly interact with us so we can serve all their needs, including remote vehicle reservations and purchases. Like many automotive companies, this is just one of the ways that TCCCI is pivoting to address a rapidly changing environment and new customer buying habits. As we continue to learn more about our clients and their evolving preferences, we stay poised for when the economy begins to normalize,” he added.
Because of the pandemic, there has been a drastic decline in showroom and service visits. TCCCI made sure that its aftersales services include remote, online vehicle consultation via video conference; live chat functions, and interaction through mobile apps for easy PMS scheduling.
President, BMW Philippines
“The pandemic has definitely shaken things up and made the business environment quite difficult. It demanded that we change the way we do things. So, we take this challenge head on and welcome the opportunities that come along with it. The team is striving to be flexible while maximizing our resources to better suit the current business climate. It also helps that we are a premium brand that offers two and four-wheeled options catering to a wide variety. In fact, BMW Motorrad’s contribution helps to keep our numbers stable. We are also doing our very best to move towards digitalization. Since our customers have limited opportunities to visit BMW showrooms nationwide, we are slowly automating some areas of our operations while making sure that each individual still gets the best from BMW. With the support of our dealer network and partners from San Miguel Corp. and BMW Group Asia, we are positive that we will be able to make the most out of these challenging times.”
President, UAAGI, distributors for Chery and Foton
“We implemented some cost cutting measures but we tried our best to keep everyone, in order not to add to the present increasing unemployment rate. We understand that this is a temporary setback until a vaccine is discovered. And we continued doing marketing and sales activities majority thru digital platforms. The past months were almost zero but banks have started to be active and we’re slowly regaining business activity. Our communication with dealers continues and supports them at this difficult time. Provided more subsidy support and adjusted our targets. We also supported the dealer sales team with our own cash assistance program during the ECQ lockdown. We launched some new products and will continue to introduce new models starting next month to stimulate market interest on buying cars and trucks. Our principals have been supportive, understanding that this is a global situation and all countries are deeply affected. We meet every month to update and strategize our plans together.”
President and Managing Director, Ford Philippines
On their employee engagement, Umashankar said: “Our people are our best asset, so their safety and well-being remain our highest priority. To date, our employees are on a work-from-home arrangement to protect them and their families. Through the use of technology and various digital tools, we are able to keep them productive, collaborative and engaged. We hold regular virtual one-on-one meetings, team catch-ups and town hall sessions to ensure all employees are aligned, updated, and supported. Employees are also given access to various online learning resources and webinars for their personal and professional development. We also launched Flourish@Ford, a holistic well-being program designed to address the mental, emotional, social, professional, physical and financial well-being of our employees.”
From a marketing perspective, Umashankar said that Ford PH has its resources and activities on the digital front, understanding that customers are spending a lot of time on various online media platforms, including social media, compared to other forms of media. Test drives and other experiential activities have been affected by the pandemic because of social distancing protocols, so it has leveraged on various online platforms such as Facebook, Twitter, YouTube and Instagram to engage and connect with its customers.
He further added : “We’ve also utilized online platforms to launch our vehicles—the Everest Sport, F-150, and all-new Ford Territory, allowing us to explore new ways to drive public awareness and engagement. From our recent launch of the all-new Ford Territory, we’ve seen how we can push the envelope in conducting vehicle launches by putting two speakers from two different locations in one stage to convey what the product is all about and showcase its segment-leading capabilities from the points-of-view of various stakeholders such as our Ford global quality expert, media partners, and key opinion influencers.”
President and CEO, Sojitz G Auto Philippines/Geely
Geely is the youngest brand to enter the auto industry and its initial single-model foray into the market late last year showed much promise. “I believe that we started strong with the introduction of a sub-compact SUV in 2019. We are expecting that the core volume segments such as sub-compact cars, multi-seat vehicles such as MPVs, midsize SUVs, and commercial vehicles such as pick-ups will be in demand for private use. We have to take note that new models of sub-compact crossovers/SUVs are now getting popular with its high value proposition,” said Takayama.
“I believe automotive players are hoping and striving for a V-shaped recovery as we provide a lot of incentives to new car buyers. Our Marketing and Sales teams continue to explore new strategies, to include online seminars, virtual meetings and car launches, to cope up with the unprecedented challenges we are facing now. I’m also confident that software developers continue to come up with better solutions to bring more efficient experience of communicating and selling to customers. This may be a period of lower auto demand for companies but I still think that many people now consider vehicles as a need to protect themselves from high commuter risks and exposure.”
COO, CATS Group
Jeep/Mercedes-Benz/Jaguar-Land Rover/Harley Davidson
“These are really trying times for the automotive industry as the pandemic continues to pose a continued threat to industry’s business. The CATS Group of Companies has, from the beginning of the pandemic, made sure that we take care of our employees welfare and wellbeing. We believe that a healthy and happy organization allows us to be our best especially during this time of crisis. Our management and dealer partners are working hard to ensure smooth business continuity with the new normal in place. We have embraced the new ways of doing things, and we are implementing strict new guidelines and protocols to ensure a safe and protected workplace and workforce. The situation on the spread of the COVID-19 is very fluid, and we are keeping our organization in a proactive posture until the situation stabilizes globally and locally. This year is a year to learn. We would like to assure the public that we remain available at service, and while we continue our business, we acknowledge that it is equally important that we all take personal and collective responsibility for the safety and well-being of our families, colleagues and communities. There is no doubt, we are all in this together.”
President, Kia Philippines
Kia fared well in this year’s ranking but Kia Philippines president said he hoped to perform better in the closing months. “Our product roadmap is prepared for the next few years. In today’s situation, the inventory level for vehicles and parts is constantly monitored and maintained since this is a critical element of cost management. Timely orders and disbursements are critical to ensure we keep costs to what is needed. Overall, our intention for the Kia business is to be sensitive to our customer requirements. We listen and respond by providing support to what the buying public needs to make vehicle ownership problem free as safe personal mobility is needed by everyone. We also coordinate and work with several financing institutions so our customers are fully assisted in vehicle acquisition. Also, we maintain close and harmonious relationships among our dealer partners to ensure business operations are smoothly in place, as we prepare for getting back to normal,” said Aligada.
He also said that it is time for belt-tightening measures and constant communication to target markets and partners is important and will be maintained using impactful content sent via effective and efficient channels. “Dealers are extensions of Kia Philippines. They are our touchpoints to and links with our valued customers. We regularly and continuously engage with our dealer partners to provide our support ensuring that their Kia dealer business, just like ours, is kept viable and moving.”
President, Lexus Manila
Rodriguez observed that today’s business climate brought about by the COVID-19 pandemic hit the auto industry very hard so he is conscious about keeping the company’s operating expenses low while strengthening its appointment system for its service customers. “This way, we can maximize our workshop efficiency. We also found a novel way to touch base with customers—conducting various webinars with topics that can vary from economic outlook, Japanese cheesecake making to health talks, etc. Topics that would interest his high-end clientele.
President and CEO, Mazda Philippines
Tan is an automotive veteran and has seen many upheavals in the country in his many years as an expat. And yet, for Tan, 2020 poses the most challenging one. “The pandemic had fundamentally and quickly changed the market in major ways—dramatically shrunk the pool of buyers for high ticket items and leisure products such as automobiles, properties, luxury goods, restaurants, hospitality and international and even domestic travel. When the consumption pool shrinks, the sellers are faced with the challenge of either dropping prices, or adding value, or restructure cost and expenses to weather the crisis. We chose to do all of that and more. By design, we have always been quite a small company with less than 55 full-time employees and we did not have to downsize at all,” said Tan.
First thing he did was to create policies and guidelines to keep everyone safe and secure, and create company transportation for all who have to come in to work. “We avoided any salary reduction, but took out all overtime. Instead of conducting all training in a central location, all product and technical training went online, and we discovered the training to be more productive and efficient for the dealership staff. Marketing investment was reduced but re-purposed to the main digital channels. We even redeployed and increased headcount resources to marketing and sales, an area which creates the biggest positivity to the brand. We were in an ideal position to harness the digital reach to generate customer lead and channel them to the dealerships,” he added.
As soon as the dealership business was allowed to operate, Mazda PH quickly launched a mobile app to assist the dealerships in booking service appointments. The service appointment scheduler has been able to help the dealership recover the service business to between 80-90 percent of pre-pandemic level.
Tan also believes that going into deep discount also has the consequence of corroding the residual value of the brand in the future, and makes recovery that much harder when the economy eventually recovers. Lastly and most important, he said that he tries to find ways to help the dealerships improve margin and cut losses, and supporting the sales and service personnel retention is the key to a successful recovery.
CEO, Mitsubishi Motors Philippines Corp.
Being the head executive of the second leading brand carries a lot of pressure. During the pandemic, Mitsubishi Motors Philippines Corp. (MMPC) conducted an internal audit on all its departments to assess monthly spending to prioritize essential purchases over those that can be temporarily suspended. It recalibrated its budget resources to programs that focused on aggressive sales support and service improvements were implemented to deliver easy ownership plans and maintain excellent customer service.
On the sales and marketing front, it shifted to maximizing the utilization of the online platform. “We are continuously improving customer experience in every touch point that we can engage with the market. Our website is currently undergoing a revamp and our social media pages are also regularly updated to better connect with our customers. We constantly develop aggressive sales programs like the extension of the Mitsubishi Rollback promo that reduces the prices of the proudly Filipino made Mitsubishi Mirage G4 and L300 to as low as P528,000 and P698,000 respectively. The main concept of the promo is that during these hard times, MMPC wants to give back to the community by offering Filipino made vehicles more affordable to the market. “Cars made by the Filipino, for the Filipino,” said Oshikiri.
President and Managing Director, Nissan Philippines
Nissan’s visionary president views the pandemic as the perfect opportunity to initiate the first virtual showroom in this region. “We recently introduced Nissan Asia and Oceania’s first virtual showroom on the Philippines website to create a safe, seamless, and creative customer experience. The virtual showroom and product walk-through videos in the website offer customers a new and exciting way of experiencing our products. We are also helping our business partners in how to maximize digital platforms and social media for sales and marketing operations. As we adapt our business approach with the pandemic situation, the company implemented a global transformation plan under Nissan Next,” said Najima.
He also noted that the wellbeing of its employees, business partners, and communities is its highest priority. By transforming into a leaner, agile organization, it hopes to focus on achieving sustainable growth. The Nissan Transformation Plan is about rationalizing its operations, as well as prioritizing and focusing on core markets, products, and technologies.
It will also have two to three dealerships opening in different parts of the country before the end of the year. “Despite the challenges posed by the pandemic, our strategy is still focused on strengthening its fundamentals in Product, Services, Customer Experience, and People,” said Najima.
Alvin Uy wears many hats, foremost among them being an executive for a home improvement chain and real estate developer and part of a family-owned chemical business. Aside from writing about motoring news and car reviews, he loves to write about traveling, food and wine reviews, mechanical timepieces and classic cars.