Korean Cars Fast Becoming a Force in Philippine Market
Korean vehicle manufacturers are fast making a dent in the market currently dominated by Japanese brands.
Kia and the relatively newer entrant Hyundai have in fact been aggressively expanding, and their sales are growing despite the slump being experienced by the market.
Both brands still maintain separate businesses in the Philippines despite the fact that they have common ownership under the Hyundai Automotive Group. The Group in 2008 was the largest automaker in Asia and one of the top five in the world.
Locally, the two hype up on their price competitiveness, quality and innovative features to make the discerning customer bite.
Kia traces its beginnings in the Philippines to Columbian Autocar Corp. (CAC) which was named sole distributor of Kia vehicles and manufacturer of Kia light commercial vehicles in the Philippines. Its foray into then People’s Car program was through the Kia Pride subcompact car which drew rave reviews when it was launched locally.
Today, Kia is one of the fastest growing automotive brands in the Philippines.
CAC has 54 dealerships and sales outlets nationwide. Sales increased from 2,414 units in 2006 to 2,790 in 2007 and 4,405 in 2008.
CAC has also gained worldwide recognition. It was named the 2008 Distributor of the Year for the Asia-Pacific Region for the highest degree of professionalism and best overall sales performance achievement.
Hernando D. Gañac, senior manager for vehicle sales of CAC marketing division, attributes the success of Kia sales in the Philippines to the fact that Kia Motors is reaching out to customers through continuous product innovation and expansion of vehicle line-up.
“Such innovation reflects advanced and stylish designs, improved performance and efficiency, durability, and over all value for money,” Gañac said.
He said volume growth was the result of the introduction of new models, which has different variants that cater to the specific needs of the market.
According to Ganac, Kia’s prices are very competitive against Japanese brands, considering that the product features and innovations incorporated in the former’s models are comparable if not superior to the latter’s.
To sustain growth in sales, Ganac said Kia will introduce new models this year and will expand its dealership. He declined to provide specifics.
“These vehicles are being considered to be geared toward a new market segment. Aside from continuous product line expansion, Kia also develops its dealership networks to reach new areas,” Ganac said.
He said while Kia has plans of pursuing an assembly line in the Philippines, it all depends on the volume it is able to sell to attain economies of scale.
The Hyundai brand of vehicles, meanwhile, has been here through Hyundai Asia Resources Inc. (HARI) since 2001 and like Kia is one of the fastest growing brands.
Fe Agudo, HARI executive vice president, said three years into the business, HARI already showed great promise as a competitive Hyundai distributor by posting steady growth – 1,078 units in 2002, 1,817 in 2003; and 2,426 in 2004. In 2008, sales stood at 10,203 units, a growth of 23.5 percent from 8,259 units in 2007.
“As its actual sales gradually edged closer to its target sales, HARI gained the momentum to take its distributorship efforts to the next level,” Agudo said.
By 2005, HARI beefed up its operations with a more diverse product lineup, improved customer service, and strengthened dealership presence to attain its target of a 5 percent market share for that year with a total of 4,924 units sold, which represents a 103 percent growth rate from its 2004 tally of 2,426 units. From the 9th spot in 2004, Hyundai moved up to No. 6 in overall rankings in 2005, making Hyundai the fastest growing automotive brand.
Agudo said achievement rates of 91 percent to a high of 118 percent were achieved from 2005 to 2008.
Today, Agudo said, Hyundai joins the ranks of leading automotive brands as it currently holds the top four positions—the only Korean brand to ever be placed in the roster of top five bestselling automotive brands, positions are usually dominated by Japanese brands.
Despite these achievements, HARI is focused on just distributing Hyundai vehicles.
“While building our own assembly facility is a welcome idea, as of now, the direction of Hyundai Motor Co. is to work on the implementation of the AFTA (Asean free trade area) program among distributors in the Asean region,” Agudo said.
In only seven years, Hyundai has secured the No.4 position in overall industry rankings.
HARI has a nationwide presence of 33 dealerships.
Agudo admits that the introduction of new car brands has made competition in the market a lot stiffer but she remains confident that Hyundai vehicles are competitively priced.
“Beyond face value, Hyundai cars are equipped with a multitude of features and have exceptional quality. What gives us an even better edge as a value-based brand is the assurance of quality that we give to the customer through our five-year warranty program, which breaks the boundaries of the standard three-year warranty of other brands as it adds two more years of worry-free motoring to customers,” Agudo said.
The HARI executive sees the need to keep Hyundai customers’ interest by offering new products in its lineup.
“These new models will be geared to growing the market particularly in the passenger car and sport utility vehicle (SUV) segment where we have made remarkable in-roads,” Agudo said.
She added that HARI is still focused on growing its market, especially for its current passenger car offerings, the Hyundai i10 and Accent.
HARI is also keen on keeping Grand Starex, its flagship vehicle, at No. 1 in the passenger van segment.
HARI also aims to boost the market presence of its premium SUV lineup, composed of Tucson and Santa Fe, while intensifying its campaign for fuel-efficiency and environment-friendly technology through Hyundai’s CRDi diesel engine with VGT, or Variable Geometry Turbocharger.
Agudo said HARI is especially strong in the light commercial vehicle segment, due to the success of Starex.
According to Agudo, Starex became No. 1 in the passenger van segment immediately after joining the Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI) in 2004. Based on the last CAMPI sales report ending May 2009, the Starex continued to dominate the PV segment with the Grand Starex as the newest face of the family van from Hyundai.
Another popular LCV model is Tucson which was introduced in 2005 and moved from No. 8 to No. 3 in 2006, then to No. 2 in 2007. Ending May 2009, Tucson moved up to No. 1 to conquer the compact sport utility vehicle segment based on CAMPI year-to-date sales reports.
The mid-sized SUV Santa Fe grabbed the No. 4 slot when introduced in 2006. The next year it moved to No. 3.
by Irma Isip, Malaya Online
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