Do the Thais know something that we don't?

By Patrick Everett Tadeo
 

The 34th Bangkok International Motor Show has a number of displays outside the massive Challenger Halls 1 to 3, which house the actual show. Interestingly, there's a long wall chronicling the growth of the Thailand automotive industry compared to those of neighboring ASEAN markets.

It's already a given that Thailand leads the region in car production, with over 2.4 million vehiclesbuilt in 2012, representing 59% of the market. The Philippines, by comparison, only produced over 55,000 units, or 1% of the total production within the region.

What caught our attention was an illustration that compared the vehicles being exported between Thailand and the Philippines.

While most of the vehicles that Thailand exports to the Philippines we already know--like Toyota's Altis and Hilux (known as the Vigo in Thailand) and Honda's Jazz and Civic--what surprised us were the other models listed in the illustration, which have yet to make their way to our country. We're talking about the new Toyota Vios and Camry Hybrid as well as the Honda Brio hatchback and sedan.

What's alarming is the fact that the current-generation Vios is locally assembled, at Toyota's manufacturing facility in Santa Rosa, Laguna, to be exact. Does this mean Toyota Motor Philippines will cease producing the nameplate here and instead import it from Thailand once the new model is introduced in our market?

Ironically, under the "Philippines Export to Thailand" section of the illustration is a lone image of the Ford Escape, which Ford Philippines stopped making at the end of 2012.

So, are we once more losing a locally produced car to Thailand? And are we really getting the models that we have yet to receive but are listed in the illustration?

Looks like we'll have to wait and see.

34th Bangkok International Motor Show

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  • [email protected] Mar 29 2013 @ 07:20am
    Sad indeed but its a reality. If I were Toyota I would consider also moving my manufacturing to Thailand since they can sell more volume locally, with lower price and become more competitive.
  • markdejesus76 Mar 29 2013 @ 09:52am
    Kasi ang Consti nila, supported ang manufacturing at international businesses. Sa pinas, papatayin ka sa pagmamanufacture, itataboy ka sa pagnenegosyo. haha. Well, napaka-mahal talaga ng manufacturing dito sa Pinas. Kahit anong industry. Mahal talaga.Tas yung logistics pa, sobrang hirap. haha. Puro kasi tayo tulong sa mahihirap pero hindi naman talaga natin natutulungan kasi hindi naman natin binabago yung dapat baguhin.
    • bruce Mar 30 2013 @ 09:20pm
      Hirap talaga magtayo ng business dito, experienced it myself.. Also, for bigger businesses requiring export, dami prob sa customs, haaayyy!!!
  • tron05 Mar 29 2013 @ 12:36pm
    As a country, we're not giving enough attention to the engineering and sciences in education, and we're not giving importance to key infrastructure. Plus, we have not been agile enough to amend the constitution on the provisions on business ownership. What foreign company would want to invest in a country where their ownership is limited? We spend too much on a dole-out oriented budget, rather than finding ways to generate greater revenues to fund the dole outs -- via increased production output and not taxes of course. Too many lawyers (and politicians) spoil the economy.

    If the government is serious about raising our automotive industry, then the following (among other things) needs to be done:

    1. Ban importation of all second hand vehicles and engines, no matter what vehicle type. This will solve the problem of smoke belching and accident-prone rolling coffins. This may sound anti-poor initially but let's be really honest... who buys fleets of second hand trucks? These buyers aren't poor. They have capital, they just don't want to spend a lot. Imagine the number of dump trucks, garbage trucks, flat beds, trailers, delivery vans, and buses that ply our roads. If the second hand imports (many of which are dilapidated and are smoke belchers) were replaced by locally manufactured ones, that's a lot of revenue generated.
    2. Provide assistance and incentives to local vehicles and parts manufacturers by lowering taxes and duties as certain milestones are met, such as number of people employed and production quotas met.
    3. Let government directly support the local manufacturers by allocating a percentage of its vehicle requirements to these manufacturers.
    4. Encourage manufacturers and parts suppliers to locate in designated zones to help take advantage of economies of scale.
    5. Encourage tight tie-ups with schools and manufacturers, especially providing for OJT and internship opportunities for engineering and design students/graduates. Encourage bright students to take up engineering and science courses as well. In fact, start them young by emphasizing math and science and technology in lower levels.
    6. Encourage a buy-local campaign by providing additional subsidies to buyers of local produced vehicles, such as longer periods between registration renewal, lowered insurance premiums, etc.
    7. Work with manufacturers to design vehicles that are a better fit for the country's demographics. These do not have to be from-the-ground-up designs. These could be adaptations of existing design which could include re-tuning of engines, changes in interiors, modifying carrying and load capacities, etc
    8. Amend the constitution on company ownership by foreigners, and provide a real and honest to goodness proper environment for entrepreneurs and business owners.
    9. Once production capability is established, we can then start working out an export concept, targeting lower-income countries in need of low-cost vehicles.

    These same principles do not need to be limited to the automotive industry. this could be applied in other areas as well. We need to reduce importation and start (re)developing our production capability. Our government should change their priority in revenue generation by focusing on production and exports rather than plain taxation. Relying on taxes will stunt our production and manufacturing capability.

    Give manufacturers a break and allow them to grow. If we need to cut down on other expenses, then so be it. If we need to refocus our spending, so be it.

    We cannot keep giving fish to everyone. It's high time people start learning how to fish.
    • GotToRead Mar 29 2013 @ 06:39pm
      tron05 para senador!
      • tron05 Mar 30 2013 @ 12:35am
        Nah. I don't have the stomach for government work. Already did a stint in the bureaucracy for about 4 years plus and it just eats you up and rots you from the inside. I was lucky I still had a soul and conscience when I left, lol!
      • mindkinetic Mar 30 2013 @ 02:28pm
        plus 1 hehe
    • td21 Mar 29 2013 @ 11:03pm
      Agree!
    • nikiboy Apr 01 2013 @ 12:56pm
      Nice comment, I agree. We have too many lawyers here that's why our country is in such a mess. Bar topnotchers and passers are so much glorified compared to other profession, what d f*ck is it!!! Time for our government to support local manufacturing activities which provides large scale employment and downstream business and industries. Don't rely too much on OFW remittances and BPO industries which are not permanent forever.
  • vgpena Mar 29 2013 @ 12:39pm
    Ford Escape... if it's the new model I'm all good with that! :D
  • leo222 Mar 29 2013 @ 02:27pm
    Sad truth today when you think that the Philippines was once the economic powerhouse of the ASEAN region.
  • triple4 Mar 29 2013 @ 02:37pm
    Wow so we will be the Brio as well? Nice more choices!

    Where do we import our Focus from?
  • mo_lave Mar 29 2013 @ 03:45pm
    I hate to say this but the government will only act if the Philippines has no more car factories to speak of. I don't know, maybe the government thinks that maintaining an automotive industry is just not feasible and therefore they are not even trying? Maybe perhaps it's the same reason why our big companies don't even bother developing vehicles?
  • aargh Mar 29 2013 @ 04:07pm
    I read in autoindustriya that the new vios will still be made here. I dont think we can really compete in car manufacturing anymore. Volume palang ng sales obvious na. Maybe we should just focus on other manufacturing industries.
    • tron05 Mar 30 2013 @ 01:08am
      We don't need to compete in car manufacturing with other countries... at least initially. What we need is to develop production capability and capacity, which can only happen if the government puts in the supporting environment and infrastructure. Heck, the government should be the first to put in place a "buy local" policy when it comes to vehicles.

      Here is a link that will hopefully give us something to look forward to: http://www.interaksyon.com/business/57738/govt-dangling-non-tax-perks-to-japanese-automakers-philippine-assemblers-say

      Here's one excerpt:

      "...will help local car manufacturers quickly use their idle plant lines, taking the utilization from the current 36 percent to full capacity of 200,000 units in the next two years"

      As long as the government highly encourages local production over importation, especially for fleets, we just might have a chance.
      • aargh Mar 30 2013 @ 07:57am
        This is good news. Lets hope this project takes off.
  • AJ Mar 30 2013 @ 03:08am
    Since nakuha na ng thailand ang majority ng manufacturing...maybe we can open up to other brands by removing tariffs (if there is any inequality). Para mas madami na tayo choices..why protect asean when thailand grabbed it all from philippine manufacturers. Hehe
  • foolishofficer Mar 30 2013 @ 10:56am
    Philippine car manufacturing will not thrive because local volume sales is too low compared to other ASEAN countries. Only perhaps Toyota and Mitsubishi plants can survive. If Toyota will not continue with the top selling model in PH then what more of the rest.
  • foolishofficer Mar 30 2013 @ 07:05pm
    Let's focus maybe on mass transit vehicles like the electric jeep and electric tricycle. But this time focus on improving battery technology and vehicle design. There are many which we can replace in PH and then eventually export them to other countries who need transport systems other than taxis and buses.
  • TingMatic Mar 31 2013 @ 06:15pm
    That's the reality in life. But once these companies see an upswing in the demand due to the good management of our country by President PNoy, they will come back again. Believe you me! With the recent investment rating upgrade by Fitch expect a re alignment of the car manufacturers strategy
    • mo_lave Mar 31 2013 @ 10:04pm
      That will take time if it happens. To match Thailand's motor sales, economic development must take place outside of Manila as well. You can't expect 1 million cars sold PER YEAR in Manila alone. I don't even want to think about the traffic in such a scenario.
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