Volkswagen\'s ASEAN boss speaks on German carmaker\'s return to PH

Is there a sales target for local distributor?
Sep 30, 2013


As you already know, Volkswagen is back in the Philippines following its grand launch at the Ayala Tower One Exchange Plaza and at the Greenbelt Park over the weekend.

Joining the celebration were executives from the German carmaker led by Volkswagen AG executive vice president and commercial operations president for China and ASEAN Weiming Soh.

In a roundtable session after the launch, Soh gamely answered the questions posed to him by the local media.

How long did it take for Volkswagen to consider establishing an operation in the Philippines, eventually leading to the appointment of Automobile Central Enterprise as your distributor?

I\'d say one year, give or take a few months. When we decided to come in, we looked at the market and we studied our competitors. After we did our homework, we looked for a partner. We had a few choices before we decided to go with the Ayala Group. Picking a partner is very important; it\'s like picking out your spouse. With the Ayala Group, I have a good feeling that half the battle has already been won.

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Do you already have a sales target in mind for Volkswagen in the Philippines?

I always say that if you sell below 5,000 cars, you won\'t be successful. You need to sell at least 5,000 cars to make a good business case. But setting sales targets has strategically never been Volkswagen\'s position. For us to have a good presence in the Philippine market, we have to have at least a 5-10% market share in the years to come. The question is: What is the business case to make that happen? It\'s too early to tell, but today we\'re learning everything step by step. We\'re introducing a few cars; we\'re learning who our customers are; what they like or don\'t like about the brand; how they will accept German-engineered cars. Volkswagen is a German engineering company, but for the Philippines, it has to be a Volkswagen for the Philippines.

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What is Volkswagen\'s projected market share in the Philippines in three years\' time?

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I would not pursue a market share in three years. Three years is a foundation year. The first year, we\'re going to sell a few hundred, maybe two thousand cars. And then we\'re going to study it. Once we hit a learning curve, we will target a higher mark. So in a few years\' time, I can give you an answer in confidence, but today it\'s still too early to tell.

Could Volkswagen ever set up a factory in the Philippines?

Right now, it\'s too early to tell. It\'s true that when you import cars, your costs will be higher. Your transportation and logistic costs will be higher. Most importantly, we need to know the market. The market is more important than the factory. If we know the market, then we can talk about putting up a factory.

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