(Second of two parts)
In this continuation of a two-part series, more of the country’s top executives tackle the topic on how their organization is coping with the adverse effects of the pandemic in the automotive industry. Most of the responses focused on how they’re dealing with the new normal, in making sure customers and employees can safely go about their retail and work environments – work from home, after sales customer services and showroom sales. They also shared their insights on how to control their operating expenses, their digital journey when it comes to communications and promotions, and adjustments in customer behavior to align with their sales campaigns.
President, Kia Philippines
Kia fared well in this year’s ranking in terms of sales performance but Aligada says they hope 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 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
“Today’s business climate brought about by the Covid-19 pandemic hit the auto industry very hard. We wish to ask the country’s top auto executives how they are coping and strategizing their organizations and networks (supply chain, dealers, customers),” said Rodriguez.
He also said that he is conscious about keeping his operating expenses low, and emphasizes to promote its appointment system with its service customers so that we can maximize our workshop efficiency. He also found a novel way to touching base with his customers – by conducting various webinars with topics and activities that would interest their high-end clientele from economic outlook, Japanese cheesecake making, health talks, and even a golf clinic with the country’s leading pro golfer Miguel Tabuena who is one of their brand ambassadors.
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 premium brand that offers two and four-wheeled options catering to 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 Corporation and BMW Group Asia, we are positive that we will be able to make the most out of these challenging times.”
Managing Director of Pilipinas Autogroup, Inc.
During the onset of the ECQ, PilpinasAuto’s primary concern was for the health and safety of our employees and stakeholders. “Needless to say, our office and dealers implemented a very strict protocol ensuring a safe and hygienic environment always. We also fielded out our modern PUVs to help support the transportation needs of our medical frontliners during the lockdown as a small way of giving back to the community. On the business aspect, it is a known fact that this global pandemic has hit a lot of sectors really hard. PilipinasAuto chose not to dwell on the challenges but rather to focus on the opportunities the situation presented. We knew well that the construction and logistics industries will remain steadfast and gladly, the Dongfeng line-up is perfect for their requirements. This meant that our sales and marketing efforts were retuned to appeal to these trades and true enough, our sales of the Dump Trucks, light to heavy duty cargo trucks and prime movers were getting traction in the market.
Economic slowdown or not, PilipinasAuto is poised to introduce more environmental friendly Dongfeng vehicles in the near future.
Chairman Emeritus, Ferrari and Maserati Philippines
Wellington Soong is a true veteran in the luxury car market. His journey in the multi-brand luxury car market started in the 1990s and has seen many upheavals and crisis points like the Asian financial crisis of 1997, when he was just starting his luxury car importation so he is no stranger to adversity. Now with his new partners in the business, he takes his expertise and collective experience to navigate his brands in today’s turbulent pandemic auto market.
“The Covid-19 pandemic has totally redefined the demand profile of our customers’ sensitivities to their own financial realities, and all our marketing and sales initiatives are now situational.” Said Soong. He further explains that this is a very crucial time and the instinct is to survive and downscale operating costs as the market for luxury and ultra-luxury cars may have shrunk to about 30%. While lamenting that demand for his brands of cars is fluid, and depends on month-to-month understanding of their customer’s appetite, Soong added that his principals are sympathetic and supportive of the market realities so he looks forward to better times ahead.
Vicente Mills, Jr.
Chairman, Hino Motors Philippines
You would think that Hino trucks, part of the Toyota Group of Companies would not be too much affected in the commercial trucks segment of the industry. But “the pandemic affected Hino’s overall operations the same way it did many businesses both locally and globally. From January to September this year, our total sales fell from about 40% to 50% compared to last year’s same period and this applies not only to units but also parts. Around mid or late March, we went through a fine-toothed comb and reviewed all our operating expenses. We drastically cut avoidable expenses except for expenses related to continuing operations, productions and marketing,” said Mills.
“Despite the adjustments we made internally, we did not cut any of the services that we offer our customers. We focused more on what we think are avoidable expenses in terms of marketing our products and delivering our products to the customers. There is no impact on the services they receive from us or the products we give to them but the systems we have in place for distributing the products to the dealers and the dealers to the customers — all those went through drastic reviews and re-design. For example, very few of our dealers now open their displays during the usual 9-5 schedule. Their service operations have also been rescheduled. All of these have to be adjusted given the lockdown measures, the travel restrictions, as well as general business downturn. Many of our customers need not to run their vehicles like before or were able to delay purchases, replacements or expansions for their fleets during this lockdown period. The current situation has changed the way we’re doing business but not our products and services because customers still come to us for those particular features of products and services. It’s really on how we produce and deliver to meet their needs.”
Hino is taking a proactive stance in making sure its dealers are in the forefront and always make sure their fleet has access to service. “Most of our dealers are struck hard because some of their sales were cut in half, which prompted them to cut their overhead expenses as well. Our dealers are also encouraged to adopt Hino’s strategy of focusing and intensifying their sales efforts to realistic customers. Several dealers have now expanded their field service operations to cater to the customers who cannot bring their fleet to the dealerships for repair and maintenance because of the lockdown. Going out to the customer site is one of the big efforts that our customers appreciated from us during this period. And as a global brand and a part of the Toyota Group, Hino has a lot of access to what’s going on around the world in terms of direction of the automotive and manufacturing industries and other user requirements. We are able to receive this kind of information support,” Mills said.
President, Honda Cars Philippines
Honda Cars Philippines, celebrating its 30th year milestone in the country, recently introduced a new president who views this pandemic as a big challenge but feels optimistic about the near future. “Despite of the current global challenge brought about by the COVID-19 pandemic, we remain hopeful and optimistic that the Philippine automotive industry will continuously thrive and bounce back in the near future. Honda hopes to do its share in helping revitalize the economy throughout the rest of the year, by continuing with its commitment to serve the Philippine market and provide mobility for everyone by offering affordable vehicles and reliable after-sales services. To achieve this, as we all adapt to the new normal, we have crafted different strategies in order to maintain comprehensive process to provide quality products and services to our customers,” said Nakamura.
Being a very safety conscious organization, he said that its employees, since the start of the Community Quarantine around mid-March, were given work from home arrangements. To support medical frontliners for their transportation concerns, HCPI lent out vehicles to medical frontliners last April during the implementation of Enhanced Community Quarantine. Last August, Honda lent out another batch of Honda vehicles to various medical facilities in Laguna and Cavite.
“Now that we are slowly but surely resuming business operations, still, the safety of our customers and associates is our top priority. With this, we have prepared precautionary measures both in the dealerships and in our offices for a safe and healthy environment. These are implementation of extensive sanitation procedures in all areas, scanning of body temperatures, practice of social distancing of at least one meter apart at all times, wearing of PPEs, and washing/sanitizing their hands before entering and while inside the premises.”
Last August, Honda officially launched its online dealership facility for both sales and after-sales services, VIRTUAL@Honda. It is easy to navigate, user-friendly, and most importantly, safe and convenient since customers have the ability to conduct their dealer transactions through a contactless process—at the comfort of their homes. This is part of Honda’s continuous efforts in providing a better consumer journey to our Filipino customers as we adapt to the new normal, VIRTUAL@Honda features the suggested retail prices, exterior and interior features, and model brochures of Honda’s full model lineup. Moreover, another advanced feature of VIRTUAL@Honda is customers now have the capability to see the sequence of dealerships that have available stocks.
President, Autohub Group
Lotus/Mini Cooper/Rolls Royce
“This global pandemic is a crisis, a booster, a huge challenge and a super rush of adrenaline rolled into one. It is a game changer that paved the way to all of us in the aspect of digital advancements. Good thing the Autohub Group started the development of our Autohub Mobile App in 2018 and we were able to launch it three months before this outbreak happened. Now it is providing our clients an easier way to book their service appointments with us. We’re continuously improving this App to make it really convenient for all our clients across all Autohub brands. We’ve also started our MINI Online Showroom and continuously utilizing almost all digital platforms in all of our brands. We’ve used Facebook for our launches nowadays too. Digital all the way. We’ve started a lot of cost cutting measures from our showroom spaces to our future expansions. It may not be what we planned in 2019 for our 2020 but nevertheless, I know we will get through this if we work together and help each other, from the manufacturers to the dealers to the banks/insurance companies and to our clients. Hope they’ll come and visit us again one of these days. This is just a bump, we will all drive again soon.”