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Auto industry sees slow growth with import curbs

The proposed safeguard measures on imported vehicle will shed at least 10 percent of projected sales over the next 5 years, based on a recent industry study.

KIA president Manny Alegado
Based on the slides presented by KIA president Manny Alegado, the Philippine auto industry while sustaining growth will take a slower path to recovering its pre-COVID-19 performance, under an auto safeguards regime.

Prior to the proposal to impose safeguard measures on imported vehicles, the industry came up with a 5-year recalibrated growth trajectory, wherein sales were projected to reach 439,000 units by 2025. However, in a scenario where safeguards are in place, the projected sales could slow down to 397,000 units in 2025. The gap of more than 40,000 units was expected to arise from the safeguard measures on local auto sales.

Industry officials said that with the safeguards in place, it may take more than 5 years to reach the 2019 sales level of 416,637 units.

In 2021, the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) estimated that sales will recover from 250,000 units in 2019 to 273,000 units, with safeguards. However, sales could be higher at 301,000 units, without safeguard measures.

Alegado said Kia Motors Philippines is optimistic for 2021 prospects despite the impending imposition of safeguard measures on auto imports.

“We will continue to strive to double our market share in 2021 and triple digit growth moving into 2021. Our intention is to repeat 2019 performance wherein we ended with 5,015 units sold. ,” he said in a briefing Thursday.

The car company currently has 1 percent share of the local automotive market. Sales in 2020 plunged by over 50 percent. It is banking on the introduction of 2 new models it plans to bring within the second half of 2021 to recoup sales and possibly another 2 models if sales are good.

To maximize its footprint, the brand intends to add 8 more dealers and 2 more sales outlets to add to its network of 30 dealers in 2020.

Alegado said the company will continue to engage dealers to provide better customer service as it plans to increase its parts inventory by 5 times that will cover maintenance, mechanical and collision parts. Partners from China and Korea will deliver the parts directly to dealers within 7 days thru its new logistics partner, DHL.

With the use of remote diagnostic technology, KIA expects to beef up its services providing dealers with real-time expert advise on how to resolve issues.

Alegado also mentioned that the company will be offering customers options as it introduces a new mineral oil which is 40 percent more affordable than synthetic oil.

Topics: Manny Alegado , KIA , COVID-19 , Kia Motors Philippines , Chamber of Automotive Manufacturers of the Philippines Inc
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