JAMES DEAKIN : Another one bites the dust

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Another one bites the dust
COUNTERFLOW By James Deakin (The Philippine Star)
Updated July 04, 2012 12:00 AM Comments (0) View comments

So the automotive industry’s worst kept secret is finally out.

After producing less than 130,000 vehicles over the last 13 years––80,000 of which were exported––in a 21-hectare facility with an investment cost of almost 300 million dollars, it didn’t take a 99 cent app to figure out that Ford needed to shut down their Santa Rosa Plant. And that’s just plain sad.

Sad for the 250 or so employees who face unemployment by the year’s end, even sadder for the 100 million or so other Filipinos whose government can’t seem to hold down a meaningful relationship with any foreign investor.

Oh, I’m sure the same government officials can wave all sorts of convoluted figures, bilateral agreements, nauseating reports or road maps to the contrary, but the simple fact is that these marriages never seem to last because they always get caught in bed with someone else––which in this case are smugglers.

Although I have been banging on this drum for over a decade now, nobody banged louder than Ford when at one point illegal imports were outselling the legitimate industry. Over the years, Ford, as well as the rest of the industry, with the support of local media, lobbied heavily against this practice as a last ditch effort to protect manufacturing here in the Philippines; and although there was eventually a decline in outright smuggling, sadly, it seems to have been replaced with technical smuggling––which is basically the undervaluation of brand new, officially imported vehicles.

While outright smuggling received a lot of ink in the local press, and places like Port Irene, Cebu and Subic have become the posters for all of the automotive industry’s woes, many automotive executives I have spoken to feel that the silent killer here are the official importers that are undervaluing their cars––some by up to 70 percent, giving them an unrealistic price advantage over the locally manufactured units.

This practice not just robs the Philippine government of its due, of course, but chokes the legitimate players into complete corporate affixation.

As the price tag to do business legitimately in the Philippines no longer remains competitive with our Southeast Asian neighbors, it’s no wonder then that Ford have chosen to get rid of the heavy baggage and take the fight to level ground––but the bigger worry now is, whether Toyota, Honda, Mitsubishi and Nissan will follow. Drastic as it may seem, it is only a matter of time before these companies look long and hard at the relationship they have with the government, or more importantly, what relationship the government is having with the one next door.

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source: Another one bites the dust - COUNTERFLOW By James Deakin - The Philippine Star » Business Features » Motoring

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While outright smuggling received a lot of ink in the local press, and places like Port Irene, Cebu and Subic have become the posters for all of the automotive industry’s woes, many automotive executives I have spoken to feel that the silent killer here are the official importers that are undervaluing their cars––some by up to 70 percent, giving them an unrealistic price advantage over the locally manufactured units.

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naalala ko tuloy mga thread ni jpdm

sabi niya dapat i-ban ang used vehicle imports para maka-take-off ang local auto manufacturing

o ayan... ang kalaban ng mga manufacturer hindi used imports... mga brand new imports

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and also years ago i said those newspaper articles re subic imports (dangerous daw RHD to LHD conversion and all that crap) are really media campaign by CAMPI to lobby the govt to ban used vehicle imports

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Over the years, Ford, as well as the rest of the industry, with the support of local media, lobbied heavily against this practice as a last ditch effort to protect manufacturing here in the Philippines

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So sad...

Was considering getting either a Ford Focus or a Ford Everest to replace my aging XTrail. While FGP is saying that they will maintain their presence here, you gotta think, how much longer before even their sales and service units close shop? Undeniably, it gives would-be buyers pause before putting down money for a Ford.

And once again, trading wins as against putting up your manufacturing facilities, dealing with labor unions/leftists, high power rates, red tape, everyone in the LGU and their mothers, etc.

So who will follow suit? Honda? Nissan?

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Originally Posted by Altis6453

So sad...

Was considering getting either a Ford Focus or a Ford Everest to replace my aging XTrail. While FGP is saying that they will maintain their presence here, you gotta think, how much longer before even their sales and service units close shop? Undeniably, it gives would-be buyers pause before putting down money for a Ford.

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Go ahead and buy a Ford. Sales and aftermarket service support will continue no doubt.

The market is still there and they are still going strong. The plant was closed mainly because it just doesn't make business sense and in fact, i think doing so makes them stronger financially and logistically since a large overhead is cut from operations by shutting down the plant. Cars like the Everest and Ranger were already imported from Thailand to begin with.

+1 to vinj

As a matter of fact, Ford's ASEAN president said that their dealerships in the country will double by 2015.

Undoubtedly, Ford's sales arm in the country is here to stay for the years to come.

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Originally Posted by Altis6453

So sad...

Was considering getting either a Ford Focus or a Ford Everest to replace my aging XTrail. While FGP is saying that they will maintain their presence here, you gotta think, how much longer before even their sales and service units close shop? Undeniably, it gives would-be buyers pause before putting down money for a Ford.

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They will still be selling Ford vehicles in the Philippines. It is way cheaper to simply import vehicles than to assemble them locally because you don't have to consider overhead like the assembly plant, workers, power, etc.

And note that most of the important mechanical and electrical components are imported from supplier plants outside the country, already. The only major mechanical components made here were the flex-fuel gasoline engines in the Focus.

Thus, the price and availability of spare parts (which are not as hard or as expensive to get for non-US made Fords as people think) will remain exactly the same.

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Originally Posted by uls

naalala ko tuloy mga thread ni jpdm

sabi niya dapat i-ban ang used vehicle imports para maka-take-off ang local auto manufacturing

o ayan... ang kalaban ng mga manufacturer hindi used imports... mga brand new imports

-

and also years ago i said those newspaper articles re subic imports (dangerous daw RHD to LHD conversion and all that crap) are really media campaign by CAMPI to lobby the govt to ban used vehicle imports

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Truth.

But for the second part, the RHD-LHD conversion thing is real... though more a case of poor government regulation rather than the act of conversion itself being dangerous... I've driven a lot of conversions that drive better than local cars of the same age... and I've driven some that were downright... :twak2:

tama si vinj

dito sa Pinas trading beats manufacturing

And note that most of the important mechanical and electrical components are imported from supplier plants outside the country, already. The only major mechanical components made here were the flex-fuel gasoline engines in the Focus.

Thus, the price and availability of spare parts (which are not as hard or as expensive to get for non-US made Fords as people think) will remain exactly the same.

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Originally Posted by niky

But for the second part, the RHD-LHD conversion thing is real... though more a case of poor government regulation rather than the act of conversion itself being dangerous... I've driven a lot of conversions that drive better than local cars of the same age... and I've driven some that were downright... :twak2:

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well ya meron conversions na di maayos

when you feel there's something wrong have it corrected agad

we've been using japan surplus vehicles forever (from pajeros & liteace vans to 12 wheeler self-loading trucks)... none of the steering conversions ever failed

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Originally Posted by uls

well ya meron conversions na di maayos

when you feel there's something wrong have it corrected agad

we've been using japan surplus vehicles forever (from pajeros & liteace vans to 12 wheeler self-loading trucks)... none of the steering conversions ever failed

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Buses too!

Last time we were able to afford to buy a brand new truck was late 70's pa! It was an Isuzu long nose 6 wheeler cargo truck. Same like this one!

[IMG]http://www.flickr.com/photos/60535462*N02/5734445576/[/IMG]

Now we use surplus IH tractor heads .... Can't afford to buy brand new anymore .. :grin:

a victory for AFTA and the thai auto manufacturing industry

kawawang pilipinas

:twak2:

Having a assembly plant doesn't gurantee sales success. Hyundai is able to climb up the sales charts without one.

ano uli yun? MVDP? Motor Vehicle Development Program?

hey jpdm musta na yan?


hahahahahaha

i think Honda should close their plant in Sta Rosa too. wala naman advantage eh, mas mahal pa Honda kaysa Hyundai-Kia.

the only successful dito eh Mitsubishi kasi akmang-akma sa panlasang pinoy ang produce nila like that masa FB's, adventures and pickups. and they priced their cars reasonably. and lagi may stock unlike Kia Phils. who ride on the popularity of Kia abroad but wont stock.