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2023: The motoring industry in revenge

2023: The motoring industry in revenge

Mikko David

This year has got to be the worst to cover if you’re a motoring journalist. And I mean that in a good way. With a tiring coverage schedule throughout the year, the auto industry is indeed back in business with record-breaking sales, back-to-back launches, foreign trips, test drives, many events, mall displays, and promotions. And with pandemic restrictions lifted, there are no more excuses for why the industry won’t be back on the upswing we left off in 2019.

Here are some notable highlights of the motoring and mobility year that was.

Record recovery in sales

Right from the onset, 2023 was set to be a full-on recovery year for the automotive industry. Sales reports from the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA) kicked off with a 42.1% jump in January 2023 versus the same month in 2022.

And it all went up from there as the first ten months saw a 25.9% growth versus the same period in 2022, with 352,971 units sold. At this point, it is plausible to expect the industry to breach the 400,000 mark. But will it surpass the 423,000 target it set for itself for 2023?

Change of guard

The pandemic certainly took a toll on some businesses, but opportunities still abound as multinational companies started swooping in and taking over the distributorships of some notable brands. Inchcape got the ball rolling in January with a 60% buy-in of Mercedes-Benz distributor CATS Group. It then completed the takeover in August and added Changan to its portfolio in August.

Meanwhile, Spanish mobility company Astara launched two new models in January as its initial salvo in the takeover of the GAC brand. And Ferrari also found a new distributor in San Miguel Corporation’s Velocita Motors, Inc.

Enter the subsidiaries

But not all management changes were as clean cut. After months of persistent industry rumors, SAIC Motor Philippines, a subsidiary of the Chinese automaker, formally took control of the MG brand from its former Philippine distributor, The Covenant Car Company, Inc.

After building up MG for five years, the Chinese owners of the brand replaced TCCCI, but TCCCI stuck around to help the new distributor in the marketing front as it launched the MG4 and MG Marvel R in October. Are you confused? So were we.

Meanwhile, Omoda and Jaecoo Philippines will enter the market in 2024 after a long brand build-up company setup process this year.

Record trips to China

This year has seen the most number of times the Philippine motoring press has visited China. With trips organized by Chery, Foton, Omoda and Jaecoo, BYD, GAC, and Great Wall Motors, there was certainly more than ample coverage of the Chinese brands and their upcoming offerings. The excursions revealed a new way of understanding how far Chinese car brands have come from their less-than-stellar ways a decade ago.

Moreover, the press now has a newfound appreciation of Chinese infrastructure and a realization that the Mainland is committed to dominating the automotive world.

Executive movements

One sign of Chinese car brands going all out is their aggressive recruitment of Filipino auto industry executives as they ramp up their activities in the country. Former AC Motors stalwarts found themselves in Astara. Chery Auto Philippines recruited a former Mitsubishi Motors Philippines Corporation top man. Ferrari found a new head from a former China brand distributor. And from Astara to Changan, a couple of high-profile management movements unraveled themselves in October.

Even TCCCI lost its former long-time president to a comebacking former Hyundai distributor. Such is the ongoing rigodon in the industry and it only shows how dynamic it can be.

The Chinese brands are coming

Aside from solidifying their existing presence, Chinese brands are one by one arriving to get a foothold on the local auto market. Omoda and Jaecoo are currently setting up their subsidiary operations. The Dongfeng brand has more distributors than the number of syllables in its name. Even luxury Chinese brand Hongqi is in town with its impressive array of EVs and ICE offerings.

As the new generation of Chinese cars arrive, we can reasonably expect more Chinese brands to set up business here and employ tried and tested sales and marketing exercises to get a bigger market share. Bar any escalation in the current rift at the West Philippine Sea, of course.

The importance of after-sales

It doesn’t come as a surprise that Filipinos are smart car buyers. Flashy designs and high-tech features can only get a brand so far. At the end of the day, they want to buy from a brand they can trust. One that will be on their side when things go south with their rides.

One China brand, Geely, learned this the hard way as it employed the less talk, less mistake approach in dealing with an irate customer’s online rants. A tactic that didn’t pan out well for the brand as it lost its former luster. Other Chinese brands, and the whole local automotive industry itself, kept an eye on this faux pax and made sure they would do better.

Influx of EVs

With the implementation of President Bongbong Marcos’ Executive Order No.12, battery electric vehicles received a respite from import duties for five years. As such, EVs, or at least those “with only electric motor as propulsion,” have been benefiting from zero percent import duties giving more incentives for car brands to bring them in.

The MG4 and MG Marvel R, the BYD Dolphin and ATTO3, the Wuling Mini EV, the Jetour Ice Cream, even EVs from Hongqi, BAW, Dongfeng and Nissan have seen more affordable pricing this year as companies are now more willing to gamble on EVs and take advantage of the perks of the law, either for increased margins or a more modern local product portfolio.

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Coding or no coding?

New rules always come with some birth pains. With the Implementing Rules and Regulations of Republic Act No. 11697, otherwise known as the “Electric Vehicle Industry Development Act (EVIDA)” coming to effect last September 2022, car brands are bound to take advantage of the incentives inherent in the law.

Suzuki launched the Ertiga mild hybrid in January marketing its coding exemption. Geely as well thought the Okavango would be included in the definition. But such was not the case. The new hybrids from Toyota, Lexus, Nissan, Great Wall Motors and even Mazda with its CX-60 and CX90 crossovers managed to get a nod of approval from the Department of Energy though. But as government agencies learn more about New Energy automotive technologies, expect some fine-tuning to their lists soon.

The return of the Japan Mobility Show

Formerly known as the Tokyo Motor Show, the much-anticipated car industry event in Japan returned in full-force this October with a healthy Philippine media delegation in tow. Japanese car brands eager to assert themselves amidst the Chinese onslaught made sure to invite the Philippine motoring press along with content creators and influencers to the Land of the Rising Sun.

Honda, Toyota, Lexus, Mitsubishi, Isuzu all wanted to capture the limelight with their mobility concepts and upcoming model introductions. Suffice it to say, Japan isn’t about to rest on its laurels despite the influx of value-for-money offerings from China.

Thankfully, mobility is still a thing

Motoring is just one way mobility is achieved. At the end of the day, it’s all about getting from one point to another in a comfortable and safe way. While pandemic-induced bike lanes have all but disappeared, the government still put in a paltry p500-million budget for their construction and upkeep. Walkways, too, will benefit from this sum.

It remains to be seen what this additional budget, along with the unused budget for the Active Transport Program will result to. Well, better than nothing.

Influencers and content creators go mainstream

Should established motoring media be threatened by the increasing number of online content creators and influencers who are now being invited alongside them in motoring events and trips? No, I think there is room to coexist.

With their large audiences, there’s no denying that the latter are reaching audiences that the motoring press may not have direct access to. It is a widening of the marketing net, and the brands are all aware of this. Perhaps the traditional media can learn a thing or two as well from the fast and agile world of content production.

The Year of the Rabbit was a hairy one, pun intended. It offered a new set of challenges for car companies, old and new alike. But 2023 also gave us consumers a larger selection of cars than we’ve ever had. More choices, better value and new technology can only mean a more extensive marketplace for Filipinos to exercise their right to choose.