State of motoring affairs

It’s been two days since President Benigno “Noynoy” Aquino III delivered his fifth State of the Nation Address (Sona). So, while political and socioeconomic pundits (and yes, even the fashion police) attempt to thresh out the blow-by-blow minutes of the address and the sideshows flavoring it, Inquirer Motoring lets out its own Soma, or state of motoring affairs.

Aquino cited the Department of Public Works and Highways as building, repairing and widening an additional 12,184 kilometers of roads since he assumed office in 2010. And these were just national roads. The Philippines, according to the CIA World Factbook, ranks 25th in the world in terms of the extensiveness of its road network, with a total of over 217,400 km of roads as of 2012.

But what about the new vehicles added to Philippine roads? In 2013 alone, the Chamber of Automotive Manufacturers of the Philippines Inc. (Campi)/Truck Manufacturers Association (TMA) and the Alliance of Vehicle Importers and Distributors Inc. (Avid) reported sales of 212,281 units.

After showing a phenomenal 24.9-percent increase in sales for the first six months of 2014 (108,957 units) compared to the same period in 2013 (87,228), Campi confidently forecast vehicle sales to hit 250,000 units by end of 2014.

Given these soaring numbers, what can the motoring public expect from the industry in the coming months? Inquirer Motoring asked key automotive personalities.

The time is ripe for the Lemon Law to balance consumer protection with rights of auto importers, distributors and

manufacturers.

“Avid recognizes the importance of the Lemon Law in protecting the rights of consumers who discover that the brand-new vehicle that they just bought is defective. Avid is optimistic that the law will provide the needed balance between consumer protection and the rights of automobile importers, dealers and manufacturers against baseless and capricious claims; and that it will be efficiently implemented to reinforce the rights and obligations of each party, consistent with the basic principles of due process,” declared Fe Perez-Agudo, Avid chair and president and Hyundai Asia Resources Inc. (Hari) CEO and president.

Lawyer Rommel Gutierrez, Campi president and Toyota Motor Philippines’ first vice president, said: “We welcome the passage of this law as this clearly defines the rights and limitations of consumers and the obligations of manufacturers/distributors.”

Auto industry veteran Arnel Doria said: “The Lemon Law will put logic to the identification of technical defects and their resolution, which would be beneficial to both the consumers and the dealers.”

Do we really need a House Bill No. 4181 that would seek to increase the registration fees for multiple vehicles owned by a single owner?

Doria stressed that “simple-minded traffic managers are quick to blame the number of vehicles as the culprit for the worsening traffic condition.”

He explained that, compared to our Asean neighbors, “the motor vehicle density in the Philippines per 1,000 persons is much less than in Thailand, Malaysia and Singapore.”

He argued: “There are far more contributory factors in the traffic condition that should be addressed such as public transport development including rails, traffic law enforcement, advanced city planning (no shopping malls along major thoroughfares). By the way, multiple vehicle ownership is actually being promoted by the bright idea of the number-coding scheme. The rich can afford these additional fees, but these will be prohibitive to the middle class who have always wanted to get their own cars because of the absence of efficient public transportation.”

Gutierrez, for his part, said that increasing the registration fee for revenue purposes is less objectionable than increasing it for regulatory purposes.

A new alternative fuel vehicles bill is in order.

Doria pointed out that “alternative fuel vehicles are developed for the purpose of conserving fossil fuels and the reduction of harmful exhaust emissions. The best legislative approach is to set the (a) minimum fuel efficiency and (b) maximum level of exhaust emission.”

“All vehicles that meet these standards, regardless of the fuel used (petrol, diesel, ethanol, water, CNG) should be encouraged by giving incentives also to the buyers/users (not only the sellers),” stressed Doria.

Agudo observed that the growing demand for eco-friendly vehicles drives multinational car manufacturers to invest huge amounts in the manufacture of electric vehicles.

“This emerging market presents   an opportunity for local parts makers, particularly those who cater to e-vehicles. This niche market could generate more business, hence, more jobs for our parts makers. It also increases the chances for the Philippines to be the e-vehicle hub in the Asean region. We need a legislation that will help the country capture the benefits of the growing market for alternative fuel vehicles,” added Agudo.

Gutierrez said: “We should encourage the bringing in of vehicles that will help keep our environment clean. Government should support the initiatives of distributors in introducing green cars.”

Vehicle modifications must be clearly defined before rules are formed and implemented

“The DOTC (Department of Transportation and Communications) rules on vehicle modifications should be clear in their objectives. [The DOTC] should clearly define what modifications are allowed/disallowed. It should consider technical inputs from manufacturers/distributors. The rules should be reasonable and in accordance with law and existing regulations,” said Gutierrez.

Doria explained that “all modifications that compromise the safety of motorists and pedestrians should not be allowed. Modifications that enhance safety should be allowed, as well as cosmetic modifications that have no effect on safety.”

Once and for all, set the record straight on license plate restrictions

Even the Land Transportation Office (LTO) itself has recently been sending mixed, confusing messages as far as the restrictions on plate covers are concerned. Doria said “license plates are for identification; anything that impedes the identification of the vehicle should not be allowed.”

Gutierrez said that the restriction on plate covers must be in accordance with current specifications of vehicles, and must not change configuration and location of plates.

Make investing “more fun” in the Philippines

“We recognize that recent regulatory reforms aim to address bottlenecks in our system. Our current ranking in the World Bank’s ‘Ease of Doing Business’ index tells us that we need to work harder to make doing business in the Philippines ‘more fun’ for investors,” quipped Agudo.

She added: “As Avid president, I would like to emphasize the importance of the strict enforcement of laws so that the rights of business players are not jeopardized. A transparent legal framework and a predictable regulatory environment are crucial for the creation of an investor-friendly business environment.”

“As a consumer myself, I would want my welfare to be always top-of-mind among our policy-makers,” said Agudo.

Top 5 concerns

Gutierrez, Agudo and Doria shared the Top 5 industry issues they wished the P-Noy administration should address in its remaining two years.

For Gutierrez, these issues are: 1. Viability of local manufacturing/assembly; 2. Domestic market expansion; 3. Domestic parts supply capability; 4. Cost gap between completely knocked down (CKD) and completely built up (CBU) units and; 5. Support package for local assemblers/manufacturers and parts suppliers.

For Doria: 1. Road infrastructure to have more space for land travel, especially for transport of goods and tourism; 2. Driver education and traffic law enforcement to put order in the chaotic driving environment and reduce road fatalities; 3. Reduce cost of utilities (e.g., electricity) to reduce the manufacturing cost of vehicles and parts for assembly; 4. One-day LTO registration procedure inclusive of issuance of license plate and; 5. Seamless coordination between the Bureau of Customs and the LTO.

For Agudo: 1. Sustain investors’ positive outlook for the Philippines, as demonstrated by the credit rating upgrades that the Philippines is receiving from international credit rating agencies; 2. Improve competitiveness and make the Philippines the preferred investment destination in the Asean; 3. Accelerate infrastructure and enhance processes that will improve the ease of doing business in the country; 4. Promote transparency and predictability in the business environment and; 5. Promote innovation-driven industry policies.