200 car dealers make appeal to DTI to reopen

Autohub President Willy Tee Ten with MINI BGC Operations manager Jeff Lizardo

Last week, The Philippine Automotive Dealership Association (PADA) representing some 200 car dealers nationwide made an appeal to allow their showrooms to operate with a skeletal staff starting this week. Aside from this, the request also includes to allow them operate their after sales service department to operate either on a limited scale or by appointment. Since car retailers are not considered essential goods and services, they are not allowed to operate during the extended Enhanced Community Quarantine (ECQ) guidelines set by the government.

The auto industry is estimated to account for about 4% of the country’s gross domestic product (GDP) and the industry employs over a hundred thousand employees collectively.  Earlier this year, car dealers specially several large scale multiple branch auto dealers had suffered massive losses due to lack of sales, hampered production and logistics as well as damages brought about by the Taal Volcano ash fall.  Since all of the major car distribution and logistics are based in Luzon area, the Taal Volcano ash fall had seriously affected car sales and actual inventory damages.

The clamor is not exclusive to the local auto industry, in other countries, economies are under pressure to re-open including the US markets. A number of factories are beginning to reopen to production. In the letter sent to DTI Secretary Ramon Lopez, it said that the average dealership’s fixed cost takes up about 70% of the gross profit, with the biggest chunk going to rent of the commercial spaces, which is not protected by DTI’s Memorandum Circular No. 20-12 series of 2020 issued by DTI for rent protection during ECQ period since the dealers are classified as large scale enterprises.