The automotive sector is one of the industries hardest hit by the COVID-19 pandemic. To get a clearer understanding of how the auto industry was affected by the lockdown, how it’s coping in this new normal, and what we can expect moving forward, the biggest names in the local automotive scene gathered during the pilot episode of the first ever “Wheels Web Series: Mobility in the New Normal” last June 17.
Kicking off the first episode was the panel led by Toyota Motors Philippines (TMP) Corp. president Atsuhiro Okamoto; AutoHub Group of Companies president and Philippine Automotive Dealers Association president Willy Tee Ten; Chery, Chevrolet, Foton, MG and Nissan brands dealer principal Vincent Licup; and Carbay Philippines Inc. (operator of Carmudi Philippines and ZigWheels Philippines auto portals) chief executive officer Cholo Syquia. Philippine STAR Wheels columnist and BusinessWorld Velocity editor Kap Maceda Aguila moderated the discussions.
Safety protocols in the new normal
As the country comes to terms with the “new normal,” auto brands were among the first to institute safety reforms, especially in sanitation and social distancing protocols mandated by the government’s Inter Agency Task Force on Emerging Infectious Diseases (IATF-EID).
On May 18, Toyota Motor Philippines resumed operations in its Sta. Rosa, Laguna plant and re-opened its nationwide dealership network. The company shares how it has done its re-opening phase.
“In mid-May, we re-started our plant operation gradually, only one shift is operating. Team members came back to the plant and worked on site. Some are producing of masks and face shields until the recovery of production volume. We did not have lay-offs,” Okamoto shares.
For the AutoHub Group of Companies, operational adjustments were made as more employees shifted to working at home. “We adjusted our manpower. Almost all our sales people did social media and online selling. Service, on the other hand, has picked up since we transferred to GCQ. Not yet back to pre-pandemic levels but our sales department are doing their best,” explains Tee Ten.
Doing business via virtual channels
Another big change that came out of the pandemic was the widespread use of online channels and digital tools like social media, online brochures, and virtual showrooms.
“All brands are going to social media and online. I think that’s the only channel, realistically, that can reach more clients. Right now, because of social media, one agent can talk to 10 to 20 customers a day. That’s an advantage,” reveals Licup.
Online search engine traffic has also been an important indicator that, despite the pandemic, interest in vehicle purchases are alive and well. As people stayed indoors, consumers gravitated to digital platforms.
“Buyers may have decreased, but traffic, browsing, and research of vehicles have continued to rise in the past three months. When the lockdown happened, we’ve also seen a shift in people’s interest and lately, we have been getting a lot more inquiries,” discusses Syquia.
Path to recovery
According to the recent reports compiled by the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and the Truck Manufacturers Association (TMA), vehicle sales in March reached only 11,029 units (vs. 29,790 units sold in March 2019), an all-time low of 133 units sold in April, and by May, just 4,788 units (vs. 30,998 units sold in May 2019). Though it may be hard, auto industry leaders are optimistic that sales figures will eventually bounce back, given the right support.
“We are considering new promos and attractive financing programs for our customers. We are working on a wider range of benefits for the consumer. More than discounts, we are preparing to enchance customer retention for the long-term,” says Okamoto.
“The premium segment has huge programs. We have programs and promos for our brands, that is why banks are important to us. I hope banks would be more lenient and open-minded because it’s a buyer’s market right now,” voices Tee Ten.
“I think the best way to go about it is through government support. In some countries, governments are giving discount coupons to customers. In one country, I heard it’s a thousand dollars. It’s going to be a big help,” concludes Licup.
Powered by the Philippine STAR’s Wheels and BusinessWorld’s Velocity, Wheels Web Series is a three-part webinar about the local auto industry in the age of the pandemic. Stay tuned on the next episode and follow Wheels on Facebook https://web.facebook.com/PhilStarWheels/ or visit https://wheels.ph/.