2024 top auto newsmakers
The Philippine auto industry in 2024 is a dynamic landscape of resilience and reinvention, marked by notable achievements and persistent challenges. On one hand, the sector has experienced a surge in electric vehicle (EV) adoption, driven by government incentives and an increasingly environmentally-conscious market. This year is also marked by the entry of new players, mostly from China and one brand from Vietnam.
As local car assemblers also make strides in manufacturing efficiency and coming out with new products, Toyota just rolled out the much-anticipated Next-Generation Tamaraw. As the market heats up with more brands sharing a limited market pie, as we continue to see more aggressive marketing and promotions, as well as attractive lay-away plans because of more relaxed interest rates.
Sales milestone
The Philippine auto industry is on track to achieve a record 500,000 units sold for the first time, driven by robust economic conditions, tempered inflation, and increased consumer spending. Atty. Rommel Gutierrez, president of the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI), has played a pivotal role. He has championed initiatives such as advocating for zero import tariffs on hybrid and electric vehicles to make sustainable transport more accessible. Under his leadership, CAMPI has also helped the industry achieve a 16-percent increase compared to 2023. This growth is supported by a 10.9-percent sales surge in the first half of the year, showcasing the industry’s resilience and adaptability.
Growth of electrified vehicles
With government incentives-include exemption from the Metropolitan Manila Development Authority’s (MMDA) number coding scheme and growing environmental awareness, sales continue to grow for electric and hybrid vehicles. Infrastructure development for EVs, such as charging stations, continues to expand as real estate developers and mall owners allocate premium parking spaces to offer charging ports for EVs. Ayala Group’s AC Mobility continues to lead the charge in creating innovative solutions like the “Power on Wheels” mobile charging stations on demand.
Chinese brands proliferation
There are now over 20 relatively new Chinese brands in the local automotive market, offering competitive pricing and added features, giving the market more choices for consumers.
Infrastructure improvements
Continued national infrastructure development has facilitated better mobility, contributing positively to auto sales. Government expenditure in road infrastructure have positively impacted the automotive industry, enhancing mobility and encouraging vehicle ownership. Projects such as expressway expansions and bridge developments have reduced travel times, improving logistics for car dealerships and creating better driving conditions for consumers.
Local tourism
Land-based travel and tourism have also flourished, with motoring events like the “Tour de Cebu” celebrating its 10th year in 2024. This vintage car rally, which traverses scenic routes across Visayas, has become a flagship event, attracting enthusiasts from across the country and abroad. The improved road network not only enables safer and smoother events but also promotes local tourism by showcasing picturesque destinations accessible by car. These synergies between infrastructure, motoring, and tourism underscore the broader economic benefits of better roads.
Financing accessibility
Improved financing options, including lower interest rates and no down payment schemes, have made car ownership more accessible specially for first-time buyers. The Philippine auto financing industry is experiencing significant growth, bolstered by lower interest rates in 2024. As banks and financial institutions reduce lending rates to stimulate economic activity, car buyers have benefited from more affordable monthly payments and lower overall borrowing costs. Industry experts report average interest rates for auto loans ranging between 5 percent and 8 percent, compared to double-digit rates seen in previous years. Because of enhanced financing accessibility, an estimated 70 percent of vehicle purchases now being financed.
Market mavericks leading the pack
Masando Hashimoto, president of Toyota Motor Philippines, who recently took the leadership role in Toyota, which has consistently maintained its dominance, contributing nearly half of the industry’s total sales. AC Mobility’s Jaime Alfonso Zobel de Ayala’s visionary efforts to promote sustainable transportation by championing the adoption of electric vehicles and spearheading the expansion of a nationwide EV charging infrastructure, not only address environmental concerns, but also pave the way for modernizing the transportation sector, creating green jobs, and making sustainable mobility accessible to more Filipinos. Under his leadership, Ayala’s (AC Mobility) is the official distributor for BYD vehicles which now has over 60-perecnt market share in the local EV market. These leaders and their initiatives underline the dynamic transformation of the Philippine auto industry in 2024, setting the stage for a more innovative and sustainable future in the years to come.
Return of the Prancing Horse
Ferrari marked its grand return to the Philippines in 2024 under Velocità Motors Inc. (VMI), a subsidiary of San Miguel Corporation led by billionaire Ramon S. Ang. The relaunch was highlighted by the opening of a luxurious showroom in San Juan City, designed to meet Ferrari’s global standards. This state-of-the-art facility includes a bespoke configuration room, advanced service bays, and a customer lounge, offering clients a world-class experience. Key figures such as Ferrari Far East and Middle East president, Enrico Galliera, attended the inauguration, underscoring the strategic importance of the Philippine market for Ferrari’s regional expansion.
Tesla finally enters PH market
This year marks the official entry of Tesla into the Philippine market. This move signals a significant shift in the country’s electric vehicle landscape. Tesla’s arrival was marked by the opening of its first showroom and service center in Uptown Mall in Bonifacio Global City in Taguig, coupled with the rollout of Supercharger stations in key locations, addressing a major gap in the EV infrastructure. Only two models were introduced, its popular Model 3 and Model Y, offering competitive pricing to discourage the gray market from continuing to import Tesla units.
LRT extension opens
The Light Rail Transit Line 1 Cavite Extension opened in November 16. The extension, including five new stations, is projected to reduce travel time from Quezon City to Parañaque City to less than an hour. Various railway projections, including Metro Manila Subway project, MRT-4, MRT-7, and North-South Commuter Railway, are currently in the works. Hopefully, they will provide much improved mobility and help cut traffic congestion.
Traffic!
Metro Manila traffic continues to rank among the worst in the world. According to the Tomtom traffic index, Manila ranked the worst in Southeast Asia, and 9th worst in the world in 2023. Average speed was a bog-slow 19 kph, with more than 40 percent of driving spent in congestion. Traffic already costs billions of pesos in lost productivity—P3.5 billion per day in 2017, according to the Japan International Cooperation Agency.
EDSA busway bandits
The EDSA busway is for the exclusive use of public buses plying the EDSA route. However, this year we saw several vehicles that got caught illegally using this busway. These include a white Cadillac Escalade with Senate Plate No. 7. The vehicle displayed a “7” Senate protocol plate, which was later determined to be unauthorized. Registered to Orient Pacific Corporation, the SUV reportedly transported individuals linked to Senator Sherwin Gatchalian’s family. There was also another incident where a motorcycle rider used a sticker from the Office of the President and claiming links to a high-ranking military official were apprehended for unauthorized use of the bus lane.
Another case involved Senator Francis Escudero, who apologized for using the bus lane with a government-plated vehicle, admitting to an “abuse of protocol.” Traffic enforcers also apprehended the convoy of former Ilocos Sur Gov. Chavit Singson for using the EDSA busway while riding in his armored truck. The former governor apologized and said that he would pay the fine. The Department of Transportation and the Land Transportation Franchising and Regulatory Board previously reminded the public that the EDSA busway is for the exclusive use of authorized buses with special permits. On-duty ambulances, fire trucks, PNP (Philippine National Police) vehicles, and service vehicles involved in EDSA busway-related tasks, including construction, security, janitorial and maintenance services, are permitted to use the busway.
Slow adoption of the modernized jeepney
Shifting from the ancient, uncomfortable and smoke-belching jeepney has been slow and sporadic. Driver groups continue to oppose the government’s Public Transport Modernization Program and declare occasional strikes. Meanwhile, recklessly driven and highly-polluting jeepneys continue to ply the streets. We can maintain the jeepney as an automotive icon, but shifting to a more modern bus is a must.
Ban the BOSS
The “BOSS Ironman Motorcycle Challenge,” an annual endurance event in the Philippines, has come under heavy scrutiny following numerous safety concerns. This year, the event saw dozens of road crashes across its Luzon and Mindanao legs, leading to some fatalities and injuries to both participants and bystanders. Lawmakers, including ACT Teachers Party Rep. France Castro and Antipolo City Rep. Romeo Acop, criticized the event for endangering public safety on public roads. Questions were raised about the legality of such activities, especially when speed limits and road-sharing laws are violated. The organizers have since expressed regret and are considering discontinuing the challenge or significantly reformatting it for safety. The event has reignited debates on road safety, with lawmakers urging stricter regulation of such challenges to prevent further accidents. Critics argue that public roads should not be used for high-speed endurance activities, citing risks to both participants and the general public.
Smuggled luxury cars
The Philippine automotive industry continue to face setbacks due to the proliferation of smuggled luxury vehicles undermining lawful trade. A notable case involved two Bugatti Chiron hypercars, which were illegally imported. The Bureau of Customs (BOC) confiscated the vehicles after tracing them through social media posts. The BOC attempted to auction the two smuggled Bugatti Chirons in November but the auction was declared unsuccessful due to a lack of serious bidders. The cars, each valued at over P165 million, were expected to raise significant revenue. However, potential buyers likely hesitated due to the hefty bidding bond and limited notice for the event. The fate of the vehicles now depends on the Bureau’s next steps, which may involve re-auctioning or other means of disposal. Such incidents impact the local automotive market, which competes against these untaxed, illicitly traded vehicles, affecting fair competition and lawful dealerships. Strengthened enforcement and public accountability remain crucial to addressing this persistent issue.
Honda and Nissan start merger talks
Shockwaves reverberated through the Japanese auto industry in December when it was revealed that Nissan was in dire trouble. Nissan’s sales in the USA and China were in rapid decline, with 94-percent cut in first-half year profits. The last time Nissan was in a financial crisis, Renault came in for a rescue, assigning Carlos Ghosn to organize a turnaround. This time, erstwhile Japanese carmaker, Honda, has stepped in. The two companies may merge or establish a joint holding company. Nissan partner, Mitsubishi Motors, will likely be included in the arrangement. This follows an announcement in March 2024 for the companies to work together to develop EV software and batteries. It’s quite a shocking turn of events for the car company that produced the world’s first mass-market EV, the Leaf. But Nissan failed to expand that lead into EVs or hybrids for the US and China markets.
The Philippine auto industry in 2024 has demonstrated remarkable resilience and adaptability, achieving significant milestones despite enduring challenges. On a high note, the sector is poised to reach record sales of 500,000 units, driven by improved economic conditions, electrification initiatives, and government infrastructure projects. The adoption of EVs and hybrids continues to grow, supported by incentives and the expansion of charging infrastructure. Local tourism and financing accessibility have also bolstered demand, while new players from China and Vietnam diversify the market. However, persistent issues such as Metro Manila’s crippling traffic, resistance to jeepney modernization, smuggling of luxury cars, and misuse of public infrastructure dampen progress. Notable controversies, such as unauthorized use of busways and road safety concerns in events like the BOSS Ironman Challenge, highlight the need for stricter enforcement and sustainable policy reforms.
Overall, the year underscores the industry’s dynamic evolution, balancing innovation and long-standing hurdles in its pursuit of growth and modernization.
