Unsafe here, safe there. Do Philippine cars lack safety features?

Qoros from China rated safest car of 2013 by EuroNCAP

Jaws dropped among automakers all over the world when the Qoros 3, a compact sedan made in China, won the maximum safety rating of Euro NCAP’s (New Car Assessment Program) crash tests last year after topping the Small Family Car class.  The Qoros 3 was rated the best performer of any car subjected in 2013 to the tests of Euro NCAP on adult occupant, child occupant, safety assist equipment and pedestrian protection, besting 33 other cars including the top scorers in their respective class, such as the Lexus IS 300h (Large Family class), Jeep Cherokee (Small Off-Road 4×4) and Maserati Ghibli (Executive).  It was an amazing victory, given the poor performance of all other Chinese cars in similar tests.

Unveiled at the Geneva auto show last March, the Qoros 3 is the first production model of Qoros Automotive Co. Ltd., a 50-50 joint venture founded in 2007 in Shanghai by Chery Automobile Co., China’s largest independent carmaker, and Israel Corp., an Israeli investment group.  Qoros Auto hired about 200 foreigners to help it design and manufacture its cars including Gert Hildebrand, who helped redesign the MINI Cooper for BMW AG.  In its mission to develop, manufacture and market a new, well-differentiated brand of premium, Western-style vehicles that meet high quality, safety and environmental standards plus cutting-edge technology, Qoros Auto is supported by globally renowned component suppliers such as Magna Steyr, TRW, Continental, Bosch, Microsoft and Iconmobile.

PROVEN POINT. The story of Qoros 3 shows that manufacturing a product which achieves a hitherto unreachable international distinction requires a lot of resources and logistics, if not determination. Many auto industry observers have always maintained that if China’s carmakers would stop skimping in their zeal to produce cheaper mass-market cars, they could come up with a vehicle with world-class quality and safety standards.  Now, Qoros Auto has proven that point.

The same principle applies to global brands of cars that are unsafe in emerging markets but safe in mature markets due to safety features included as standard equipment. Take the matter of airbags, which according to research findings reduce by 30 percent the risk of dying in a head-on collision. Driver and front passenger airbags became mandatory equipment in the United States in 1998 and in the United Kingdom in 2005.  Many vehicles are now equipped with side curtain airbags as well as front airbags.  Brazil and Argentina have passed laws requiring all vehicles to have dual front airbags and antilock brake systems (ABS) by this year.

In the Philippines, seatbelts are required by law as standard equipment in cars. Although there is no law requiring two front airbags and ABS in all four-wheel motor vehicles sold here, most cars in a certain price bracket have them as standard equipment.  However, the basic or no-frills variants of some compact and subcompact models have only one airbag (for the driver) and no ABS.  Many high-end and premium vehicles retailing for P1.5 million or more have six airbags, ABS and also electronic stability control, whereas in developed markets like North America and Europe all these are standard equipment even in entry-level cars.  Not necessarily because these safety features are required by law in those countries but because car buyers in mature markets expect to have them.

GLOBAL DEFINITION. Assuming that the global definition of a safe car mandates the inclusion of six airbags (front, front side and curtain), 3-point shoulder belts, ABS and electronic stability control as standard equipment, then the majority of vehicles sold in this country would be considered unsafe.  Incidentally, a recent Associated Press article reported that cars produced in Mexico (the world’s fourth biggest auto exporter with an output of about three million a year) may look identical, but how safe they are depends on where they are headed.

Cars to be exported to the United States and Europe must have six to 10 airbags, ABS and stability controls, while the basic models headed for the domestic market or the rest of Latin America don’t need to have more than two airbags, if any, nor ABS and electronic stability control.  For example, an American brand subcompact, which sells for $14,000 in the United States comes with 10 airbags, ABS and traction control, while its Mexican equivalent, the country’s top-selling car, does not have any of these protections and costs only $400 less.  A German mass-market brand added two airbags to its compact sedan model when they learned that Latin NCAP was going to crash-test the car.  In Europe and the United States, the same car is sold under another, world-famous model name and comes standard with six airbags.

COMMON PRACTICE. The spokesperson of the Japanese brand that produces Mexico’s cheapest car with no safety features at all told the Associated Press that it is “common practice” to add different features depending on the market. He said that because there are many choices of specifications and equipment, specific marketing strategies by country, tax differences among countries, states and cities, plus transportation and delivery costs, it is not possible to make a direct comparison among vehicles sold in each market based on the list price published on the Web.

In other words, to make a bigger net profit and sell cars at affordable prices, some carmakers toss out accessories. Airbags and ABS are the first to go.  Features that are mandatory in other countries are offered as options because most people in emerging markets cannot afford to buy cars that are fully loaded with safety features.  A car that is rated safe in Europe and North America has certain specs not found in the version sold in countries with no or minimal safety requirements like Mexico and the Philippines.

For example, a Korean vehicle that tied with an American model (not sold here) for Euro NCAP’s 2013 Best in Class in the Small MPV category is sold in Europe with six airbags, seatbelt reminders (front, middle and rear seats), electronic stability control, hill assist control and emergency stop signal, while over here the same car is sold with only two airbags and none of the other safety features.
Among many global car manufacturers, unsafe here, safe there is the name of the game to maximize net profit.