Provincial dealerships sprout
As automakers focus on ‘ key growth areas’
Business is very good in the local automotive industry, which has seen continuous growth sales-wise in the last six years. In 2017, our market sold a total of 470,000 brand-new passenger vehicles, up some 17% from 2016’s 400,000-unit tally.
Around 35-40% of these new cars wind up in Metro Manila alone, which explains the horrendous traffic jams we now experience on a daily basis. Now, there is only so much metal you can cram into any megalopolis. At some point, its residents will realize there are already too many cars around them, and that it’s time to unclog the roads if they are to preserve their decent living situation.
If you’re in the auto business and you’re among those with the unenviable task of having to hit monthly sales quotas, the prospect has to worry you. Just when exactly will your most crucial market — Metro Manila in this case — reach such saturation levels that further growth is simply no longer sustainable? Has the National Capital Region indeed irrevocably crossed over to that critical side where its inhabitants need to now seriously consider going carless for the benefit of all?
If you ask President Duterte, the answer is yes. Recall that he has predicted Metro Manila to be dead in 25 years if we don’t drastically change our ways —which, I’m guessing, involves letting go of our motoring addiction.
Elsewhere, there are calls from both government and private sectors to limit car use. Pasig City, for one, already observes “carless weekends” on F. Ortigas, Jr. road. It’s only a matter of time before such efforts become more intense and more consistent, eventually convincing more city dwellers to take public transportation instead of acquiring a garage-less vehicle and paying for its amortization every month.
How does the industry prepare for this eventuality, which is almost sure to happen from all indications? Simple: Bring the cars outside of Metro Manila. It’s a form of decentralization, if you think about it. Focus on sales and marketing initiatives in the provinces — particularly those on the fringes of NCR — and then develop a solid customer base in those areas.
That’s exactly what’s happening these days, as a matter of fact. In the two decades I’ve been covering the car industry, I have never received as many invitations to faraway dealership events as I do this year. As I write this, there are at least a couple such invites sitting in my mailbox, waiting for my reply. One is for the grand opening of Subaru Cainta, and the other is for the inauguration of Honda Baliuag. Where I once got used to fancy dinners in Makati City hotels, I’m now getting the hang of waking up early in the morning to ride a shuttle bus that will take me to a provincial showroom — as I did when I attended the formal opening of Nissan Batangas City more than a month ago.
And that’s only for dealerships that are conveniently accessed by short road trips. This year has also seen the appearance ( or groundbreaking) of new showrooms in places that are truly remote from the country’s business capital. These include Ford Isabela, Isuzu Cebu South, Mazda Butuan and Suzuki Ozamiz. Of course, it’s no coincidence that the brands erecting these new stores are also the same ones that are currently surging in sales performance.
The multi-brand Lica Auto Group, which owns the above-mentioned Nissan Batangas City, is the most aggressive of all dealer companies. Chief Operating Officer Doroteo R. Sornet gave me a list of the new showrooms his team is inaugurating in the coming months: Nissan in Calamba; Hyundai in Cainta, Batangas, Molino and Marikina; Suzuki in Batangas City and San Pablo; Chevrolet in Cainta; Foton in Cainta and Calamba; and Volkswagen in Santa Rosa.
See the common thread here? These are car-selling locations away from the bowels of Metro Manila. The industry refers to them as “key growth areas.” In the coming years, these will be the most important battlegrounds for automakers. Local emerging markets, if you will. The car distributors that go to these places the soonest stand to reap the spoils of an imminent war.
All of this could also be a clear sign of the industry’s faith in the present government’s direction, which is to make Metro Manila unload many of its vital components to neighboring provinces. Obviously, people in these provinces will need cars to go around, and they will likely buy the first vehicles they encounter up close and personal.
This is a long time coming. Metro Manila is dying. It can’t accommodate more new cars at this rate. The provinces, thankfully, will gladly take them.
Has the National Capital Region indeed irrevocably crossed over to that critical side where its inhabitants need to now seriously consider going carless for the benefit of all?