Hyundai taps into a vibrant new market

By Aida Sevilla-Mendoza July 26,2017
Hyundai's Xcient dump truck

Hyundai’s Xcient dump truck

Committed to Hyundai Motor Company’s mantra of “New Thinking, New Possibilities,” Ma. Fe Perez-Agudo, president and CEO of Hyundai’s exclusive distributorship in the Philippines, grabs a new marketing opportunity when she sees one.

This is why Hyundai Asia Resources Inc. (HARI) is venturing big time into the commercial vehicles (CVs) business.

“We are positioning the HARI CV division to tap into the huge potential of the Filipino commercial vehicles market, ranging from small- and medium-scale enterprises (SMEs) to large-scale commercial/industrial business-to-business (B2B) accounts,” Agudo said.

“Our vision is to be the most trusted and preferred lifetime partner of Filipino business and the community in their mass mobility and payload needs.”

Agudo is referring to Hyundai trucks and buses, the Philippine distributorship of which was awarded by parent firm, Hyundai Motor, to HARI at a signing ceremony on Feb. 15, 2016.

Favoring factors

Agudo has assessed the business environment for factors that favor HARI’s CV venture.

She notes that automotive unit sales have been rising since 2010, with CVs making up the bulk (63.6 percent) of local vehicle sales in 2016.

On the other hand, passenger cars comprised two-thirds of the vehicle sales in the rest of the Asean market, which means that the Philippines has a relatively larger market for Asian utility vehicles (AUVs), light commercial vehicles (LCVs), trucks and buses compared to other Asean countries.

Sales in the Philippines rose from 3,124 trucks in 2012 to 10,803 in 2016, and from 573 buses in 2012 to 748 buses in 2016.

Rising demand

“Recent data from the Land Transportation Office show a strong number of new trucks registration across the country in areas with high economic activity,” Agudo pointed out. “This could be very indicative of the rising demand for new trucks and buses in these strategic locations.”

In 2014, the LTO registered a total of 29,230 units of new trucks and buses, with trucks accounting for 26,342 units and buses for 2,888 units.

Agudo ticks off the reasons why sales of trucks and buses are projected to surge: “Demand for buses will rise because the government has required bus companies with aging buses to replace their fleets.

“We have 21 major bus companies in Metro Manila, not including provincial bus companies solely operating in Palawan, Mindanao, Visayas, South Luzon and North Luzon.

“What’s more, the government has already approved a big PPP project to operate a Rapid Bus Transit System in Cebu.”

Infrastructure acceleration

She foresees the increased demand for trucks to the current administration’s 10-point socioeconomic agenda that is envisioned to reduce poverty from 21.6 percent in 2015 to 13-15 percent in 2022 via the acceleration of infrastructure and the development of industries.

“Infrastructure is among the top priorities of this administration, with public spending on infrastructure projects targeted to reach P8-9 trillion from 2017-2022,” Agudo added.

“In the Build Build Build Philippine Infrastructure Transparency Portal, you find a list of high-impact projects—roads, bridges, railways, mass transit, airports—envisioned to boost the productive capacity of the economy, create jobs, increase incomes and strengthen the investment climate.

“This means increased demand for trucks to deliver, complete and sustain these infrastructure upgrades,” she concluded.

Hyundai CVs coming in

For starters, HARI is assembling at its logistics center in Calamba, Laguna the 14-seater H350 luxury van for small business mobility and the H100 utility truck for SMEs, Agudo said.

In the near future, HARI will offer the Hyundai HD Series light duty trucks (gross vehicle weight of up to 8.2 tons), HD medium and heavy duty trucks with GVW of 12 tons and above, the Super Aero City bus for premium city operations, Universe bus for luxurious long-distance mass transport, and the Country (24+1 and 29+1) bus.

HARI chairman emeritus Richard Lee, president and CEO Ma. Fe Perez-Agudo, chief finance officer Ladislao Avila, and SVP Jun R. Cortez in front of the Elec City, Hyundai's first mass-production electric bus, during the Hyundai truck and bus mega fair 2017 in Kintex, South Korea last May.

HARI chairman emeritus Richard Lee, president and CEO Ma. Fe Perez-Agudo, chief finance officer Ladislao Avila, and SVP Jun R. Cortez in front of the Elec City, Hyundai’s first mass-production electric bus, during the Hyundai truck and bus mega fair 2017 in Kintex, South Korea last May.

The trucks and buses will be imported from Hyundai’s Jeonju plant in South Korea, the world’s largest plant for CVs with a production capacity of 103,000 units per year.

Hyundai CVs are sold in about 130 countries around the world, with the special vehicles available in over 150 different models.

Different

Agudo claims that Hyundai CVs are different from long-time players because of superior end-to-end technology using high-grade Hyundai steel (the Hyundai steel plant is the second biggest steel complex in the world), an ergonomically engineered, exceptionally comfy ride for long-distance driving, and excellent handling, strength, space, durability, and safety.

“Hyundai trucks are specially built for the toughest jobs without sacrificing occupant safety and comfort as well as owner/operator profitability, as their durability leads to business sustainability and they offer more flexibility and efficiency in moving goods because of their dependable and balanced design.”

Meanwhile, Hyundai buses are built for safety and comfort, taking into consideration the passenger above everything else.

“They not only look good, they are also much safer than the ones plying our streets due to Hyundai’s cutting-edge design, reliable build, and global quality standards.”

HARI aims to sell 1,608 CVs this year through its 42 dealerships nationwide, with an initial tranche of 10 dedicated CV dealership facilities to be completed by the end of 2017.

Summing up, HARI’s CEO said: “By tapping into a vibrant new market, we expect satisfying returns, and in the greater scheme of things, add new value to customer, industry and the economy.”

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