Auto Prominence Rip-Off!

**k.o** · July 28th, 2006 09:10 PM

otep: i had them service my alfa romeo

thinking they were the "experts" and "service center" yun pala expert tumaga and manloko ng tao! mabasa sana ito ng lahat ng taga auto prominence ito para malaman nila ginagawa ng mga tao nila at mabasa ng LAHAT para i boycott and auto prominence at malugi na sila at mawala sa automotive business!!! mga bwisit!

**ssaloon** · July 29th, 2006 01:49 PM

taken from motioncars:

From Manila Standard
Tuesday, June 28, 2005

‘We’d rather kill the brand’

Spurned Audi distributor lashes out at German carmaker

By Vernon B. Sarne, Motoring Editor

THE former exclusive distributor of Audi cars in the Philippines, Auto Prominence Corporation, met with the motoring press last week to air its disgust over Audi AG’s allegedly abrupt and unjustified termination of its distributorship contract late last year. The carmaker, based in Ingolstadt, Germany, has since appointed erstwhile BMW dealer and still Porsche vendor PGA Cars as the new and official Philippine distributor. APC’s contract wasn’t due to expire until 2008.

While the contract did contain a clause stating that Audi could cancel it before the expiration date, APC said Audi could only do so on certain warranted grounds, including a gross violation of a corporate policy. As it was, according to APC finance vice president Ernesto Tan, the contract was terminated by Audi without providing any sort of explanation.

“Their officials have been ignoring us,” Tan said. “They’re always in a meeting or out of the country every time we call.”

When APC asked Audi about the rumors that it was about to appoint a new Philippine distributor, Audi kept denying it, according to Tan. “Of course, everyone knows they eventually did appoint PGA Cars,” he said. “It was also funny that around the same time that they sent us the termination notice, they also gave us a sales award.”

PGA Cars formally opened the doors of its Audi showroom on May 6 this year.

A case of “estafa through falsification of public documents” has already been filed by APC against the members of Audi AG’s board of management. The case was filed with the Regional Trial Court in Alaminos, Pangasinan, where the supposed assembly plant APC prepared for Audi is located. A subpoena was served to Audi’s German executives at their hotel while they were here for the PGA Cars showroom inauguration last month, APC claimed.

According to APC, “the Germans were so arrogant, telling the Filipino sheriff that they didn’t acknowledge Philippine laws and that they wouldn’t accept the subpoena.” It was then that APC chief operating officer Paul Rodriguez took it upon himself to approach them and give them the papers, which, according to APC, were just crumpled by one of the Audi executives.

A warrant of arrest has since been released, according to APC, and distributed to the Bureau of Immigration and International Police.

Last week, while APC was talking to the press, PGA Cars was nonchalantly conducting a weeklong test drive of Audi’s Quattro models in Clarkfield, Pampanga, for clients and also the media. Audi sent a fleet of cars for the event along with two of its driving instructors. (See related story on page B7.) The lines, clearly, had been drawn.

“If they keep ignoring us, we might ask government to have all Audi vehicles banned on all major Philippine roads,” threatened Tan, who also claimed that Audi had previously done the same thing to a Malaysian distributor. (The threat—we just have to note—is unrealistic, if not downright laughable.)

How did all this mess come about?

It all started in August 1996, according to Tan, when Audi AG appointed Proton Pilipinas Corporation as its “sole and exclusive importer, assembler and distributor” in the Philippines. Industry observers will recall that APC was set up by the same people at the helm of PPC, then the local distributor of Malaysia’s national automotive brand. PPC folded after Proton failed to take off in a market that frowned upon non-Japanese cars, let alone Malaysian ones.

PPC and Audi then entered into three major written contracts, according to Tan, which included the Assembly License, Technical Assistance and Parts Supply Agreement (ALTAPS); the Distributorship Agreement; and the License Fee Agreement. All of these were subsequently submitted to the Board of Investments.

The biggest bone of contention here concerns ALTAPS, which was basically a joint commitment of Audi AG and PPC/APC to the Philippine government—under the latter’s Car Development Program—to fulfill three things: set up an assembly plant, develop local parts, and eventually export automotive components.

In return, PPC could launch the Audi brand immediately and Audi could bring in semi-knocked-down units (essentially completely built-up units without wheels, tires and battery) paying only a duty rate of three to 10 percent. A CBU unit was slapped the full tariff of 30 percent.

In 1998, Auto Prominence Corporation was established because Audi no longer wanted to be associated with the relatively lowly Proton brand.

According to Tan, APC ended up spending a fortune just to be able to sell Audi in the country. First, it had to post a performance bond of $4.12 million required by the BOI in case the company didn’t comply with the terms of ALTAPS. Second, the total amount of P50 million was paid to Audi AG as license fee. Third, APC equipped the former Proton assembly plant in Pangasinan with state-of-the-art tools and equipment costing $50 million ($40 million of which, according to Tan, went to a sophisticated painting equipment that Audi insisted on getting). Finally, there’s the P500-million sum, which, Tan reckoned, was spent on the showroom, after-sales service facilities, parts inventory, market promotions and brand-building.

“Not a single peso was shelled out by Audi,” said Tan, who noted that it was extremely difficult for them to compete with chief rival BMW after the latter’s mother company officially opened shop in the Philippines in April 2001, thereby shouldering the brand’s expensive marketing campaign.

Already tired of the runaround it had been getting from Audi, APC said it was willing to settle for the amount of 30 million euros ($36.5 million). That’s probably shooting for the moon, but APC expressed hope that Audi would relent to prevent damage to its brand image in the international community.

The strangest twist in the APC press conference was the company’s announcement that it was still selling Audi cars—particularly the new A6 powered by a 3.2-liter Fuel Stratified Injection engine—sourced not from Audi but from “various dealers in the Middle East and Germany.”

Claiming to be the only Audi specialists in the country—having sold more than 600 units since it launched the brand in 1996—APC said the A6 models being peddled by PGA Cars had already been phased out abroad.

The question just begged and itched to be asked: “If you believe Audi is an unscrupulous and irresponsible company, why are you still selling its cars to your countrymen?”

“You’re buying the car, not the company,” shrugged Rodriguez, prompting a colleague to note that you can’t marry a woman without also marrying her family.

Another question thus made sense: “So what do you really want: kill the Audi brand or sell your Audi cars?”

“We’d rather kill the brand,” Rodriguez admitted.

We later learned that the reason APC was hell-bent on promoting its A6 model on the one hand while condemning its assembler on the other, was that it still had $1 million worth of Audi products and parts to dispose of.

When asked about the issue, PGA Cars officials firmly refused to comment, saying the matter is entirely just between APC and Audi AG.

No one knows for sure whether this case would be settled any time soon, but for now, we’re finding it hard to imagine why any sensible buyer would want to purchase an Audi unit from the same company that is threatening to have all Audis banned from the road.

**carlocaraddict** · July 29th, 2006 05:14 PM

dun po ba sa pasong tamo po ba kayo nagpaservice? I heard that the pasong tamo ex-audi showroom is closed already. (huurraay!!!)

We went there last March and its so dark and lonely inside. heheh

nakow, baka baka masapak ako hahaha

**OTEP** · July 29th, 2006 05:46 PM

Yung Nexus? Ano na nangyari?

**alwayz_yummy** · July 29th, 2006 06:04 PM

diba ung nexus mixed ng toyota at isuzu and mitsubishi?

**ILuvDetailing** · July 29th, 2006 06:08 PM

sucky car, sucky service

rumble na!

**e2fee** · July 29th, 2006 06:38 PM

From Manila Standard, Tuesday, June 28, 2005
‘We’d rather kill the brand’
Spurned Audi distributor lashes out at German carmaker
By Vernon B. Sarne, Motoring Editor

The former exclusive distributor of Audi cars in the Philippines, Auto Prominence Corporation, met with the motoring press last week to air its disgust over Audi AG’s allegedly abrupt and unjustified termination of its distributorship contract late last year. The carmaker, based in Ingolstadt, Germany, has since appointed erstwhile BMW dealer and still Porsche vendor PGA Cars as the new and official Philippine distributor. APC’s contract wasn’t due to expire until 2008.

While the contract did contain a clause stating that Audi could cancel it before the expiration date, APC said Audi could only do so on certain warranted grounds, including a gross violation of a corporate policy. As it was, according to APC finance vice president Ernesto Tan, the contract was terminated by Audi without providing any sort of explanation.

Sounds like that phrase can cover arbitrarily anything that it pleases Audi to define as policy. For example: Bottom line, corporate policy is to make money for the German company. Filipino 'partner' didn't make the Germans money, for whatever reason, and didn't look as if they they were going to. So, adios.

While the recent events suggests highly questionable ethics of APC and that they may be the side mostly at fault, I don't think the behavior of Audi---the alleged lack of explanation, alleged treatment of APC, secretiveness, lack of transparency on their part as well as on the part of the new dealer---acquits the Germans either.

Until Audi is more forthcoming on this matter, it seems that there is a cloud over Audi in Philippines. Regardless of how good their cars may be, I would not be comfortable buying the brand.

**Helios** · July 29th, 2006 07:28 PM

It behooves me to question Audi's quirky marketing strategy even if APC didn't quite cut it for them. Although for a young luxury car maker eager to make its presence felt in Asia, the move must have been prompted by APC's notorious past. This isn't the case for other regions including Australia, and I personally enjoyed doing business with them and would be more then welcome to do it again in the future. As for APC- no comment