The Local AutoParts Makers

[jpdm]

The steady decline of the CKD market resulted to the decreasing demand for local autoparts. Good news is, some manage to survive via the export market.

AUTO PARTS MAKERS
[SIZE=4]Fewer but stronger[/SIZE]


BY AMADO P. MACASAET
June 25, 2010
Malaya Business Insights



Because the increasing use of domestic content was mandatory under the Progressive Car Manufacturing Program, the country at one time came close to producing 40 percent of the parts that go into a motor vehicle.


Local content is now down to 20 per cent. The number of companies in the ancillary industry for automotive was cut by from 350 in 1984 to 173 as of last year.



But the reduction does not remotely suggest that domestic parts or ancillary industries are on the wane.


Figures obtained from Antonio Gimenez, executive director of the Motor Vehicle Parts Manufacturers Association of the Philippines, show that the bulk of locally-made parts and components find their way into the export market.


Export value in 2007 was recorded at $2.98 billion out of total Philippine exports of $50.465 billion.


Total exports of the country declined slightly to $49.077 in 2008 billion but foreign exchange earnings from auto parts climbed to $3.502 billion.


However, the world financial crisis that maimed the world starting in 2008 began to be felt the following year. Automotive parts earned less foreign exchanged at $2.093 billion from January to October last year.


But the decline in total Philippine exports was even sharper at $31.31 billion in the same period.


Philippine-made auto parts are exported to 40 fully developed and under-developed economies of the world.


The rpelatively less industrially developed markets include Sri Lanka which bought 138,000 kilos in July 2009; Brunei Darussalam, 19,067 kilos; and United Arab Emirates, 31,542 kilos.


In July 2009 alone, the parts makers exported 17,474 million kilos worth $185.582 million. For the similar month in previous year, volume was even bigger at 23.11 million kilos with a FOB value of $319.284 million.


The ancillary industries for autos seem to have weathered the financial crisis.


The giants in the business are either joint ventures with Filipinos or are wholly foreign-owned.


The biggest in the field – a Japanese-Filipino joint venture – is clearly Yasaki Torres. It produces wire harness in its Calamba plant which employs around 9,000 workers, the same number in the payroll of the entire automotive industry. Yasaki-Torres earns more dollars than the lone exporter of cars built or assembled in the Philippines.


The Japanese-Filipino joint venture exports an average of $900 million a year in wire harness. Only 5 per cent of production is used by the local automotive industry. The rest is exported.


All cars made in the Philippines use glass – windshield, rear, and front windows – which is monopolized by two companies, Republic Glass and AGC Glass.


In an exclusive interview with Malaya Business Insight, Gimenez pointed out that Toyota Auto Parts, a subsidiary of Toyota Motor, exports yearly at least 200,000 transmission assemblies to Japan, United States and Thailand where the automaker has operation.


It also makes computer modules for the export markets.


Continental Temic dominates the market for semi-conductors upgraded for computer engines.


Motolite exports batteries to the Middle East. It competes in the local market with two companies – Imarflex owned by Chinese inventors and Standard Battery, a Filipino firm.


The three tire companies, unfortunately, are all dead. Two have closed shop. The third has suspended operations.


But by and large the auto parts makers are doing well. Their market is exports, not the local automotive industry.


http://www.malaya.com.ph/06252010/busi1.html

[jpdm]

[SIZE=3]Auto parts makers book $8.7M in deals
[/SIZE]
By Abigail L. Ho
Philippine Daily Inquirer
First Posted 22:57:00 06/25/2010


LOCAL AUTO PARTS MAKERS generated around $8.7 million in sales during a recent trade show in Taipei, opening the door to as much as $30 million in annual revenues if promotion of the sector would be sustained.


In a statement issued Friday, Dita Angara-Mathay, special trade representative at the Department of Trade and Industry’s Taipei Commercial Office, said the quoted amount represented both booked and negotiated sales at the Taipei International Auto Parts and Accessories Show (AMPA) 2010.


Should efforts to promote the local auto parts industry persist, Trade Secretary Jesli Lapus said the sector had the potential to chalk up at least $30 million in revenues each year from the various original equipment manufacturer (OEM) contracts forged during the trade fair.


With Taiwan serving as jump-off point to markets in the Middle East, Europe and Africa, he said auto parts sales could reach as much as $138 million over a period of three to five years.


He said that during the trade show, local participants generated significant leads, particularly for the supply of high-value performance parts for racing, replacement mufflers, radiators, and leaf springs.


http://business.inquirer.net/money/c...k-87M-in-deals

The challenge is not only to make inroads in the export market but also increase sales in the domestic market.

[jpdm]

[SIZE=3]Time to Reach Out to our Parts Manufacturers[/SIZE]


Business Mirror
June 25, 2010
Al S. Mendoza



WE are all familiar, I believe, with the Car Assemblers and Manufacturers of the Philippines Inc. (Campi). Practically all the country’s car companies are Campi members, particularly the leading and popular brands—except Ford and MVPMAP.



And what is MVPMAP again?



It is the acronym of [SIZE=2]Motor Vehicle Parts Manufacturers Association of the Philippines.[/SIZE]



Campi is in the consciousness of every car buff mainly because aside from its crucial role in helping develop the motoring industry and the advancement of growth in the segment through sustained representation with the government, the group religiously monitors vehicle sales movements that the media religiously follow and publish by way of public service.



In fact, what Campi says would sometimes be the barometer of where the motoring business is headed to. Its projection of 125,000 units sold last year was the product of serious sales patterns that when it came out true, Campi received deserved applause.



Through the years, Campi has been being expertly steered by Beth Lee, the feisty Universal Motors Corp. top gun. Because of her sometimes radical approaches in attacking sector concerns, Lee draws criticisms—though obliquely at times. But each time, she has the uncanny ability to weather the storm.



Pacci elicits raised eyebrows


WHEN the Pacci (Philippine Automotive Components Council Inc.) was established a while back, it elicited not a few raised eyebrows as if to ask, “What will this banana going to do in the motoring business? Is it a Campi ally to encourage growth in the vehicle world?”



Some observes even went to the extent of labeling Pacci as a breakaway group from Campi.



So, on my own, I did some probing. And it turned out Pacci is a strong force that can push for renewed investments and work side-by-side with Campi and even in effecting growth for the economy.



“The truth of the matter is, Pacci is there to support MVPMAP,” said Eddie Jose, the soft-spoken, low-key Pacci chairman.



An avid golfer like me, Eddie and I had bumped into each other a while back and I learned a truckload from him about the workings at MVPMAP and other facets of the car world, outside basically of mere engines, transmissions and chassis.



For example, do you know that the vehicle you are driving now or riding in has been the product of many corporations, and not just basically Toyota, Honda, Mitsubishi, Isuzu, Ford, Volvo, Chevrolet, Land Rover, Mercedes Benz, Lexus, Nissan, Subaru, or even Foton?



While your Toyota has a Toyota engine, chassis and transmission, its doors, tires, fan belts, windshields, windows, chairs and even side mirrors and door knobs were probably made by not just one other company but many other companies.



This has been an established fact since the invention of the car but, not surprisingly, not many people know about it.



An earthworm has four hearts


IT’S like the earthworm: Do you know that it has four hearts?

And also, do you know that the African earthworm’s droppings are the so-called organic fertilizer called vermicompost?



And do you know that the African crawler is a hermaphrodite, which means all African earthworms are male and female all at the same time, and, therefore, they can all reproduce?



I know. My beloved Sol F. Juvida, who is also a journalist and writer like your humble Full Tanker here, and I have been raising them—with delight all this time, under the tutelage, of course, of Ramon Uy, the fantastic gourmet and lover-of-life from Bacolod City.



But anyway, enough of that. Back to the business at hand.



MPVMAP benefits from Pacci


THE MPVMAP, according to Eddie, is benefitting much from the creation of the Pacci. In fact, with Toyota, Ford, Isuzu, Honda and Mitsubishi as members of Pacci together with MVPMAP, this is an indirect prop to strengthen the base of MVPMAP.



Figures would say that local manufacturers of vehicle components have been suffering a bit the last few years or so.



In 1997 alone, out of the 140,000 vehicles rolled out of the assembly lines, 129,000 of those had locally manufactured parts.



But as years went by, though, demand for locally made parts products waned dramatically as a result of the bad economy and unsound investment approaches.



From a high of almost 88,000 workers employed in parts-suppliers companies and parts-manufacturers outfits in the country, the workforce capacity had dwindled to about only 40,000 now.



“And out of the homegrown workers, only about 50 percent of them are being utilized right now,” rued Eddie. “Not much demand for our products.”

He, however, welcomed the signing of Executive Order 877 which somehow, according to him, can be a ray of hope in the projected rebound of parts manufacturing in the country.



“New investors would surely come in, which would gun up growth in the parts manufacturing industry,” Eddie said. “More manufacturing means more parts-makers in action, ensuring survival for our local parts suppliers.”



EO 877 would somehow firm up domestic base in manufacturing because without this crucial component of car manufacturing, car companies might be forced to transfer to our Asean neighbors like Thailand, Malaysia and Indonesia—and also Vietnam, which is a fast-rising economic force in the region.



P-Noy coming keenly awaited


A SERIOUS look at our locally manufactured vehicles (LMVs) would indicate that in 2009, we only churned out about 45,000 or so units as compared to about 1.2 million in Thailand, 450,000 in Malaysia and 700,000 in Indonesia.

What a gap, indeed!



For years, really, the car business here has been practically in the doldrums, parts-manufacturing wise.



Look, while Malaysia has spurred growth with its native car, Proton, effectively “forcing” its people to patronize their own; and, Thailand unloading huge incentives for its AUVs (Asian Utility Vehicles) and other tax holidays dangled to buyers of “family” vehicles like pick-ups, the Philippines, on the other hand, increased its excise taxes to “burden, harvest type” vehicles, eventually killing our AUVs such as the Tamaraw as a prime example.



This would quickly create a chain effect and one of the biggest casualties was our parts-makers sector.



It is now widely hoped that the incoming administration, aptly called P-Noy, will also zero in on the ailing state of the car industry, particularly on the unabated importation of used vehicles with applicable laws to it (balikbayan exemptions and the like) being bended in wild abandon.



And I heard that Port Irene in the Cagayan Valley, the one big source of alleged money-making deals, not to mention Subic’s supremely active, lucrative vehicle auctions, would also be targeted for proper dispositions as soon as P-Noy officially takes over on July 1?



That’ll be the day, indeed.


http://www.businessmirror.com.ph/ind...ring&Itemid=72

MVPMAP should work closely with the local auto assemblers to survive. The export market can also be an option.

[April Boy]

Its also a question as to what the government will prioritized.

Anyway, local parts manufacturers should intensify their marketing in the local market so that Pinoys will be aware of their products.

[ghosthunter]

Its also a question as to what the government will prioritized.

Exactly and the motor industry is not that high on the list. There are more pressing needs like:

-education
-health
-armed forces
-disaster preparedness
-law & order / criminality
-national budget / finance
-war on political corruption
-others

Anyway, local parts manufacturers should intensify their marketing in the local market so that Pinoys will be aware of their products.

Isn't that kinda a stupid idea? And wasteful of money as well? It is not like you would buy a spare headlight assembly just in case you would damage the one one your car.

This is not like advertising Coke or Pepsi.

Regular people don't stock up on car parts that they do not need.

[April Boy]

Isn't that kinda a stupid idea? And wasteful of money as well? It is not like you would buy a spare headlight assembly just in case you would damage the one one your car.

This is not like advertising Coke or Pepsi.

Regular people don't stock up on car parts that they do not need.

Definitely not about advertising coke or pepsi sir

And I guess, imho, its indeed kinda a stupid idea (marketing it locally) if we will refer to the conditions/scenario you mentioned.

Anyway, my idea is far from it and to clarify sir, Im specifically referring to the thousands of auto supply shops, auto shops and even talyers that can be potential dealers and sellers of their products (especially fast moving parts like oil filters, mufflers, bushings, tires etc. ).

Well, anyway, just my opinion sir.