Philippines: Automotive Industry

U.S. Commercial ServiceU.S. Embassy Manila, Philippines

www.buyusa.gov/philippines

Industry Overview

• 2.3% growth in motor vehicle sales for 2006

• Highest new motor vehicle sales figure in five years (99,541 units). 2007 sales projected to breach 100,000 mark

• Commercial vehicle (CV) dominates motor vehicle sales with 61% share in 2006

• Japanese brands (Toyota, Honda, Mitsubishi, Nissan, Isuzu) dominant, but U.S. brands (Ford and General Motors) have shown consistent growth in the market

Philippine Automotive Industry

• Average vehicle life ranges from 10 to 15 years

• 70% of the market are low-end buyers, which strongly favor third party rather than OEM products.

• ASEAN Industrial Cooperation (AICO) beneficial to the industry.

Philippine Automotive Industry

Market Trends

Best Sales Prospects & Buyers

• Best sales prospects are:– Replacement parts (engines and associated parts,

body and mechanical parts) – Auto Electric - Batteries, light bulbs, air

conditioners and compressors. – Aftermarket products for Japanese brands– Service equipment – Biofuel technology and other environment-friendly

products for the automotive industry.

• Buyers: Service stations, auto retail shops, automobile owners

Philippine Automotive Industry

Market Entry

• Partner with a reliable Philippine distributor

• Assist Philippine distributor develop the market by:– Technology / knowledge transfer through adequate

training

– Support marketing efforts to introduce new product / technology (i.e. participate in exhibitions, advertising in yellow pages, sponsoring industry events)

– Provide reliable after-sales support

Philippine Automotive Industry

Market Challenges

• Piracy – counterfeit auto parts and aftermarket products.

• Used vehicle imports.

• Regional initiatives (i.e. the Japan-Philippines Economic Partnership Agreement or JPEPA) which favors Asian auto manufacturers.

Philippine Automotive Industry

Philippine Trade Events

• Manila International Auto Show 2007April 6-9, 2007World Trade Center, Manila, Philippineshttp://www.worldbex.com/mias06/details.html

• Trans Port Show 2007 April 18-22, 2007 Megatrade Halls 1-3, SM MegamallMandaluyong City, Philippines http://www.tradeshow.com.ph/events-transportshow/index.html

Philippine Automotive Industry

Thank you &See you in the Philippines!

Judy Reinke Judy.Reinke@mail.doc.gov

Commercial Counselor

Aida MirandaAida.Miranda@mail.doc.gov

Senior Commercial Specialist

U.S. Commercial ServiceU.S. Commercial ServiceU.S. Embassy Manila, PhilippinesU.S. Embassy Manila, Philippines