Losses of BMW AG’s local unit widened as it ended operations in the Philippines last year and turned over the local dealership to its Filipino business partner.

BMW Philippines Corp., in its 2008 financial report, said it had to sell inventory at a loss ahead of the closure of local operations.

The company’s net loss last year ballooned to P186.53 million from only P22.43 million in 2007. Meanwhile, sales of the leading luxury car brand inched up by only P15 million to P1.89 billion in 2008.

BMW Philippines decided to stop local operations last Dec. 19.

The company, a joint venture between BMW AG of Germany and local partner Asian Carmakers Corp., said it had terminated lease agreements and other major contracts effective Dec. 31.

It also paid P25.2 million in separation packages to its 34 employees.

Last September, BMW AG announced the dissolution of Philippine operations, citing the need to improve business efficiency worldwide. The car maker also shut down operations in Turkey and Taiwan, citing the same reason.

BMW Philippines has said the move would not affect customers.

Asian Carmakers’ operations will be monitored by BMW’s regional office in Singapore, which also oversees the dealerships in Vietnam, Brunei and Guam.

The local BMW dealership sold 621 units last year, down by almost a quarter from 805 units in 2007, industry data showed.

Asian Carmakers Chairman Jose Ch. Alvarez said last year that BMW’s sales would drop to 600 to 800 units this year due to the entry of Japanese luxury cars with the implementation of a bilateral free trade agreement between Japan and the Philippines.

Don Gil K. Carreon, Business World

Tsikot.com Philippines

Lexus Manila is cautiously optimistic of sales this year, which marks its official foray into the local luxury-car market.

Hiroyuki Tsuda, Lexus Manila Inc. executive vice president, told a round­table at The Manila Times on Thursday that the global financial crisis would indeed slow down global automotive sales. The luxury-car segment, he said, would not be an exemption, including here in the Philippines, still a budding market for high-end vehicles.

According to Tsuda, Lexus Manila’s sales in the first two months were “a little slow,” as they sold an average of 11 units per month.

Lexus Manila began the operation of its showroom in Fort Bonifacio, Taguig City, only in January this year.

But despite the global downturn, Tsuda said that he remains optimistic that the local auto market would still perform relatively better than the more mature auto markets, reflecting the positive growth target this year of industry group Chamber of Automotive Manufacturers of the Philippines Inc. (CAMPI).

CAMPI earlier projected sales of about 130,000 units, or growth of between 2 percent and 4 percent for 2009.

Tsuda said that Lexus Manila was confident that its initial projection of selling about 200 units this year would be attained, especially as the most recently launched RX 350 model is selling briskly.

The RX 350, a compact luxury sports-utility vehicle (SUV) introduced to the local market barely a month ago, is already Lexus’ top-seller, he added.

Lexus Manila initially launched four sedans and another SUV model in January.

Tsuda said with sales getting better of late, they have slightly adjusted the monthly sales target to between 15 and 20 units per month. He added that there now is a “waiting list” for people who want their own Lexus.

Lexus Manila’s executive vice-president said that upon ordering, shipping the unit from Japan to the Philippines takes between two and three months. Hence, the company has accordingly adjusted and increased importation to facilitate faster delivery of orders, Tsuda added. The Lexus cars sold locally are all imported from Japan.

While noting that Lexus SUVs were selling better than the sedans, Tsuda said they would also want to be known for their sleek sedans as well and sell better in the smaller segments.

Lexus Manila’s mother firm, he added, is not eyeing to put up new assembly plants aside from its current manufacturing facilities in Japan and Canada. Neither would it lay off workers, Tsuda said, as the firm would not want to lose the labor force it has invested in and trained.

Lexus Manila, he added, would in the meantime rely on its current product line, as it is still studying the entry of other models. Tsuda said that they would probably bring in variations of the existing six models first before launching entirely new ones.

He added that the company is also studying opportunities that the Japan-Philippines Economic Partnership Agreement could bring to Lexus Manila and other importers, including possible price adjustments as a result of lower costs of importing from Japan under the JPEPA.

By Ben Arnold O. De Vera, Manila Times

Tsikot.com Philippines