R & D (Research and Duplicate) - Why don't we do it?

[donbuggy]

Solution: Robotic latero.

[EVO-V]

The problem is fit and finish. Something which Filipino workmen and parts suppliers can provide, but not at such a competitive price.

Truth be told a lot of vehicle body, chassis, and other parts are manufactured here. And the technology is nearly a century old. Get a few 800-1000Ton presses and you have it. There's also hydroforming and robotic welding is relatively inexpensive now. So in this aspect it is a matter of capital.

Tool and die technology is also a matter of throwing money into it. Anyone can buy any machinery for it. The learning curve is what is needed to be overcome, and this needs a supporting industry to do so as its not a plug and play industry. There is also an issue of human capital, once your designer learns a little they tend to leave for the next company willing to pay for the lessons they learned at your expense.

So the bottomline in all this is about the business proposition that is really lacking.

Would people buy a Philippine made vehicle even if it is manufactured with seamless excellence that it would not be discernably Filipino? Even if economic challenges can be surmounted can the market accept the notion of a Philippine car? Why bother with that proposed Franken-Alto when Suzuki has the Jimny?

Hyundai took at least a full generation and a half of collaboration with Japanese and American auto manufacturers with huge subsidies and a few bailouts to get to their state of industry. Not to mention holding a very protected market.

Will the Filipino public afford the same inflated prices for cars that Malaysians pay for their locally produced cars? And moving forward, can a Filipino branded car actually be commercially successful? And if so how long will it take and how much will it cost to get there?

Manufacturing a local vehicle is a romantic idea, but we have to understand that it is not entirely feasible for everyone to be doing so for the sake of pride. "F*ck pride" as one Mr. Wallace once said.

The Thais aren't pitching a Thai car brand but they are boasting of a very robust auto-industry. Same with the Taiwanese. We need the proper perspective here.

Muddled notions of competitiveness do not make for good business, let alone industry. We are better off knowing our place in the supply chain, there is no love lost in manufacturing and exporting car parts. That activity coincides with capital, both financial and human, realities of our economy.

Thing is, if you are looking for innovation, we have to accept the reality that we have to make it sufficiently rewarding for the people in the academe to collaborate with industry. Nothing wrong with incentives and nothing wrong with rewarding people for their work and innovation. It just so happens the academic and economic conditions in Japan are different from their counterparts here the former being able to think long term, and the latter pressed with more immediate needs with limited opportunities.

[niky]

The business proposition is really simple. On the manufacturing end alone, you need at least 20-40k vehicles a year to make a plant cost effective. 20-40k of ONE model. That's from the perspective of the plants that stamp the body panels and build the chassis.

On e research side, you probably (because I have no exact figures for this) need a hundred thousand or so of one model to justify the engineering and development expense. The engines themselves require billions of pesos to simply develop. Given engine development costs can run into the billions of pesos, you're looking at the need to sell well in the hundreds of thousands to break even over several years of the engine's life.

[EVO-V]

The business proposition is really simple. On the manufacturing end alone, you need at least 20-40k vehicles a year to make a plant cost effective. 20-40k of ONE model. That's from the perspective of the plants that stamp the body panels and build the chassis.

On e research side, you probably (because I have no exact figures for this) need a hundred thousand or so of one model to justify the engineering and development expense. The engines themselves require billions of pesos to simply develop. Given engine development costs can run into the billions of pesos, you're looking at the need to sell well in the hundreds of thousands to break even over several years of the engine's life.

That's a very low estimate for engine development. Billions of dollars go into development of a single engine family. Thing is a lot of car companies share engine technology to diffuse costs.

New factories are now designed to be quickly retooled for a group of vehicles as simply opposed to one model.

The alternative to jumpstart any auto industry is to purchase the old production line of a previous model, give it ridiculous subsidies and impose tariffs on imports. The circumstances, however, will not allow that from happening any more given free trade areas and regimes are in place.

[Helios]

re the local boys involved in manufacturing auto parts, are they using compression molding for curved sections, or am i just smoking weed? given that we can produce an original, sleek contour body shell of a let's say a small sedan, and put on a stock chassis, engine etc., i suppose with a competitive price some will actually buy it. kit cars look like kit cars while mass market cars cost alot to make, so avoid these and focus on the niche market instead. the rally fighter (starts at around 2 million pesoses) was built with that in mind with no less than 10 local motors staff with off-the-shelf components. some companies sponsor other projects and the styling part is handled by the crowd-sourced-design community of which i'm part of. the phils can adopt the open innovation structure once it can gather at least 10 people who can do the job. capital and community, come up with these two components and possibly...

[EVO-V]

re the local boys involved in manufacturing auto parts, are they using compression molding for curved sections, or am i just smoking weed? given that we can produce an original, sleek contour body shell of a let's say a small sedan, and put on a stock chassis, engine etc., i suppose with a competitive price some will actually buy it. kit cars look like kit cars while mass market cars cost alot to make, so avoid these and focus on the niche market instead. the rally fighter (starts at around 2 million pesoses) was built with that in mind with no less than 10 local motors staff with off-the-shelf components. some companies sponsor other projects and the styling part is handled by the crowd-sourced-design community of which i'm part of. the phils can adopt the open innovation structure once it can gather at least 10 people who can do the job. capital and community, come up with these two components and possibly...

Where a company would locate its factory will depend on a few things, mainly market proximity, policies, and cost/availability of skilled labor. Having a factory in Thailand is logistically cheap enough to allow them to ship to the Philippines while serving the rest of South East Asia. The ASEAN free trade agreement allows for more relaxed access to markets.

The technology to manufacture just about every part is already out there. Locally engines for Honda, body parts for a few AUV's, plastic bumpers for the Vios, drive train parts for the Fortuner, wire harnesses for numerous vehicles, lamps, chassis, gears, coil springs, leaf springs etc. are already done here.

MVPMAP has admitted its design faux pas on the PHUV. But you see, the various companies that comprise MVPMAP can only dedicate so much time and management overhead for a project that requires serious attention to detail. There is still no single company that has the incentive to put all these together let alone deal with the inter-corporate politics for something most companies do not expect to see a profit on.

Again that is not their fault. As parts manufacturers their position in the value chain and their business models rely on shipping as many parts as possible. Assembly and design is beyond their core competencies.

Now if its a matter of high-end, one needs to understand that brand management has to be balanced with origin. If a Filipino product has to be introduced in this segment, it has to be EXCELLENT first and Filipino second. Why? Like Manny Pacquiao, the world will not tolerate a non-first world brand if it does not give any of their own industries a run for their money in terms of feature and performance. Lhullier and Tesoro were recognized as great designers first and Filipinos second. Same thing goes for Dado Banato.

That's because the mentality is not racist nor nationalistic, -its function and quality centric.

We have to recalibrate our pride and sense of nationalism to overcome these as secondary wants as opposed to simply pushing for excellence in the things we do and the goods we manufacture.

Yes Filipino companies can be competitive and in fact be the best at what they do. However, the problem largely lies in the fact that the local market is still looking for the cheapest fix it can find. It is difficult to finance R&D when your margins are squeezed by a market that makes a company compete with surplus parts, that they know will be inferior, less reliable and costlier later on, but still cheap enough to work in the short run.

Of course still not an excuse to cease on improvements, but these are the business realities most pundits do not understand.

[niky]

That's a very low estimate for engine development. Billions of dollars go into development of a single engine family. Thing is a lot of car companies share engine technology to diffuse costs.

New factories are now designed to be quickly retooled for a group of vehicles as simply opposed to one model.

The alternative to jumpstart any auto industry is to purchase the old production line of a previous model, give it ridiculous subsidies and impose tariffs on imports. The circumstances, however, will not allow that from happening any more given free trade areas and regimes are in place.

The cost of development can be within just one or two hundred million, if you exclude the cost of tooling for manufacturing. As long as you sell it only to the ASEAN market and don't need to meet ridiculous CO2 and HCO emissions targets.

Buying an engine and upgrading it is possible. We could also purchase technology for things like cam-phasing from suppkiers like Delphi and fuel injection from Bosch or VM Motori, like many small manufacturers do.

Without punitive tarriffs, what we can do is provide big subsidies to locally owned and developed car manufacturers. Such a company would have to start with motorcycles... So it will have the production volume to support an R&D an engineering department.

Nobody will want to risk it, though.

re the local boys involved in manufacturing auto parts, are they using compression molding for curved sections, or am i just smoking weed? given that we can produce an original, sleek contour body shell of a let's say a small sedan, and put on a stock chassis, engine etc., i suppose with a competitive price some will actually buy it. kit cars look like kit cars while mass market cars cost alot to make, so avoid these and focus on the niche market instead. the rally fighter (starts at around 2 million pesoses) was built with that in mind with no less than 10 local motors staff with off-the-shelf components. some companies sponsor other projects and the styling part is handled by the crowd-sourced-design community of which i'm part of. the phils can adopt the open innovation structure once it can gather at least 10 people who can do the job. capital and community, come up with these two components and possibly...

Rally Fighter works because there's a large community and some of them have money. How many buyers could you find here for a space frame toy that costs over two million pesos before sales tax?

[EVO-V]

The cost of development can be within just one or two hundred million, if you exclude the cost of tooling for manufacturing. As long as you sell it only to the ASEAN market and don't need to meet ridiculous CO2 and HCO emissions targets.

Buying an engine and upgrading it is possible. We could also purchase technology for things like cam-phasing from suppkiers like Delphi and fuel injection from Bosch or VM Motori, like many small manufacturers do.

Without punitive tarriffs, what we can do is provide big subsidies to locally owned and developed car manufacturers. Such a company would have to start with motorcycles... So it will have the production volume to support an R&D an engineering department.

Nobody will want to risk it, though.



Rally Fighter works because there's a large community and some of them have money. How many buyers could you find here for a space frame toy that costs over two million pesos before sales tax?

Why build something that isn't compliant and future proofed? If we want to get something done we need to use what has been learned by the industry and begin leap frogging the standard state of the industry. Only with something significantly disruptive can we differentiate products well enough to get anything worthwhile in a very crowded market place.

We have to skip this "puwede na" mentality especially when it works against environmental regulations and general efficiency.

Remember the flight of the kuligligs in Manila? Be thankful there was enough political will to see that such things come to a swift end.

Personally, if we have to develop something, let's do it well, no matter for whatever market segment it will serve.

[niky]

It's not a puwede na thing, but realistically, developing an engine with stuff like high pressure direct injection is aiming for a crowded market with high barriers of entry.

You aim for the developing markets. Develop a small engine that's fuel efficient and sufficiently cheap to maintain. Develop a small car platform that's robust... Or better yet, a utility vehcile platform that's more efficient than current. This isn't aiming low. This is aiming for where the profits are in mass manufacturing.

Sadly, it seems the only segment you can enter where being small is not a disadvantage is making ultra-luxury cars... But it's not a great market, either.

Personally, easiest out... Offer to manufacture the T25 for Gordon Murray. That's already been engineered. It works, it meets all standards. Develop a five-seater variant. And work at reducing tag price to the 400-500k level for the three seater.

[EVO-V]

There are alternative engine designs already out there and can be made using readily available parts and processes.

The thing is, how do you make a business out of this? Yes you do need it to be compliant, it is not an excuse for businesses nowadays to make something that isn't compliant just to make it cheap. The cost will burden the public, e.g. the Manila kuliglig infestation.

Every business is dependent on the market and how it is shaped by policies. Policies will largely depend on what serves the public's greater interest.