2013 Special: premium car segment sees new brands, steady growth

A politician once said that the Philippines is a rich country pretending to be poor.  Or is it the other way around?  If the Philippines is a poor country pretending to be rich, then there must be a growing market for premium (a.k.a luxury) cars.  No wonder Bentley and Rolls-Royce arrived on our shores this year to sell their super-costly, super-premium cars.

This year, there were eight companies in the Philippines importing, distributing and/or retailing premium automobiles. These are Asian Carmakers Corporation (ACC) for BMW; CATS Motors, Inc. for Mercedes-Benz; PGA Cars, Inc. for Audi, Porsche, Bentley and Lamborghini; Lexus Manila, Inc.; Jaguar Cars, Inc.; Autostrada Motore, Inc. for Ferrari and Maserati; Rolls-Royce Motor Cars Manila; Viking Cars, Inc. for Volvo and Auto Hub for MINI Cooper.

 

I sent the marketing and sales heads of these companies a questionnaire about their performance in 2013. However, Jaguar Cars, Inc. and Autostrada Motore, Inc., which are owned and operated by the same company, refused to answer the questions.  Here are the questions and the answers of the others with a sidebar for Rolls-Royce Manila, which opened for business only last October.

 

Q. What was your best-selling model this year?

ACC: We saw a major shift this year to the 5 Series.  For the first time in BMW history in the Philippines, our 5 Series is the brand’s best-selling model and has been the industry’s biggest volume seller in the luxury segment for 2013.

CATS Motors: The newly launched A-Class and E-Class have been selling very well, especially the A-Class, one of the New Generation Compact Cars targeted to a new and younger market of the Mercedes-Benz.

PGA Cars:  Of the four brands, Audi and Porsche sold more this year.  The new Audi A1 Sportback and Q3 were introduced this year while the Porsche Cayenne has always been a strong player in its segment.

Lexus Manila:  The RX350 and ES350.  Also great performers: the IS350 and IS350 F-Sport introduced in June.

Viking Cars: The Volvo XC60 followed by the S60 sedan and newly launched Volvo V40.

MINI Cooper: The MINI Cooper S hatch and MINI Countryman S.

 

Q. How many units over-all have you sold this year (up to the end of the 3rd quarter)?

ACC: We sold 531 units by the end of October, registering 33 percent market share and about 2 percent growth compared to the same period last year.  This makes BMW the solid market leader in the luxury car market for the past 11 years.

CATS Motors: Due to the competitive nature of the industry, we cannot quote sales figures.

PGA Cars: We sold more units than last year.

Lexus Manila: At the end of the 3rd quarter, registered sales were 361 units.

Viking Cars: We are looking to end the year at around 200 units.

MINI Cooper: We are currently running at the volume we expected.  Of course, we would like to sell more.  But we are doing okay so far.

 

Q. What new or refreshed models are you selling in 2014?

ACC: The all-new 4 Series and the all-new X5, the most successful vehicle in its class and segment.  We recently launched the 3 Series GT.

CATS Motors: It will be an exhilarating year for us as we introduce the performance variants of our New Generation Compact Cars: a 45 AMG and CLA 45 AMG and the new CLA-Class compact coupe.  The coupe, cabriolet and AMG variants of the E-Class will also be introduced.

PGA Cars: The Audi A3 sedan in the premium compact segment.  In the previous years, only hatchbacks were offered in this segment.  The new “Macan” compact SUV will change the game as its introduction is as the first sports car in its segment.  Porsche’s iconic sports car, the 911, top models the powerful Turbo S and high-revving GT3.  The 981 mid-engined model will also get new, sportier Cayman GTS and Boxster GTS. We also expect the arrival of the newly launched Bentley Flying Spur and the sporty Continental GT V8 S.

Lexus Manila: Judging from the Tokyo Motor Show, maybe the Lexus LF-NX compact crossover concept and the Lexus RC sport coupe.

Viking Cars: Refreshed versions of the S60, V60, XC60 and S80.

MINI Cooper: We are all excited for next year because we’ll be introducing the new MINI which is the F56, the third generation of the MINI hatch.

 

Q. What is your market share in the premium car segment?

ACC: As answered before, 33 percent.  BMW has been the solid market leader in this segment for the past 11 years.

CATS Motors: Due to the competitive nature of the industry, we cannot quote sales figures.

PGA Cars: Audi’s market share in the premium car segment is more than last year.

Lexus Manila: Our market share as of October was 28 percent.

Viking Cars: Our market share is about 8 percent.

MINI Cooper: Approximately 9 percent.

Q. What is the profile of your brand’s Philippine customer?

ACC: The demographics of our customers have expanded due to the ever-expanding model line-up of BMW.

CATS Motors: Our products cater to an extensive array of customers for every gender and preference from the young market to the traditional ones coming from the discerning and success-oriented middle and upper class.

PGA Cars: We are looking at the same group of core customers as well as a substantial number of new buyers given our new product lines.

Lexus Manila: Lexus customers are either business owners or mid- to high-level executives of big corporations who are established in their fields.  We made a breakthrough this year with the younger generation with the launch of the IS model that appealed to the youth who found looks and performance a driving advantage.

Viking Cars: Our customers are between 35 – 60 years old, ranging from the young, affluent progressives/ pre-family types to the enthusiastic empty nesters, a mix of established business owners, CEOs, presidents and other high-ranking officers.  But more than the statistics, Volvo people are better defined by the lives they live.  They are well-educated, well-read, well-traveled, have good taste and value good design.  They look for a distinct premium car that allows them to express themselves without seeking validation from their peers.  They value innovative thinking, practical design, safety, family and are environmentally conscious.  They appreciate smart luxury that is neither loud nor ostentatious.  Volvo people see the luxury of having peace of mind and that you can enjoy the accoutrements of a car best when you know you and your loved ones are safe.

MINI Cooper: MINI customers are aggressive and extrovert individuals.  They are not afraid to portray their own character and they are fun to be with.  MINI owners have no inhibitions.  They are not afraid to be seen being their own selves. We have designers, artists, architects, doctors, entrepreneurs, ad agency owners, mostly from active industries.

 

Q. Is your pre-owned and/or leasing business doing well? How long have you had it?

ACC:  Our BMW Premium Selection Program was the first in the luxury car market, founded almost a decade ago.  Its volume continues to increase.  BMW was also the first to launch an operational lease program in the luxury car market: Flexilease. It is doing very well. What with the shifting focus on tax regulations, it makes more sense and the benefits versus traditional financing have become more apparent.

CATS Motors: We have been trading-in and selling pre-owned cars not limited to Mercedes-Benz, Chrysler, Jeep, Dodge and Ram since 2006.  Our pre-owned business is solely dependent on brand new sales as its primary function is to support it.  We recently introduced it as “Proven Exclusivity” two months ago.  In our Proven Exclusivity sale, we sold out.

PGA Cars: Our dedicated pre-owned center has been operating for over five years.  It accepts trade-ins of all and any brands if you are looking to get an Audi, Porsche, Bentley or Lamborghini. Our leasing program covers all four brands.

Lexus Manila: Lexus has a certified pre-owned program.  To be certified, a pre-owned car has to pass through 203-point examinations for faults.  Once certified, the unit is given an extended one-year warranty on top of any existing warranty it has.  Our “Lease of No Worries” program accords flexible monthly payments.  Maintenance, insurance and registration are taken care of by the monthly payments and no deposit is required.  It is the easiest and most worry-free way of leasing a luxury vehicle.

Viking Cars: Volvo is one of the first premium car brands in the Philippines to have a pre-owned program.  Through the years, we have also offered the market various ways of owning a Volvo, from tailor-fit financing packages to leasing packages.

MINI Cooper: We have some pre-owned vehicles, but usually they don’t last that long for they are bought right away.  No leasing business as of now, but we’re open to it in the near future.  What we have now is a MINI Magic scheme which entrusts the client to have three options before the end of the financing deal for 36 months.  First option is to pay outright the 50 percent guaranteed future value.  Second is to refinance it and third is (to pay) for MINI at a guaranteed minimum future of 50 percent which will enable the dealer to purchase the car from the bank upon appraisal.  If there would be any balance of its trade-in value from the 50 percent pay-off amount, that would be part of their down payment for their next MINI vehicle.

 

Q. Because of Supertyphoon Yolanda, the World Bank projects a lower (6.5 percent) growth for the Philippines in  2014.  Will this affect your sales?

ACC: There will always be political, economic and environmental factors that will affect our business, but we have a very positive outlook for 2014.  For as long as we remain faithful to our customers, we will continue to be the market leader in both the local and global markets.

CATS Motors: It’s too early to bank on the lower projection of growth from the World Bank.  Both CAMPI (Chamber of Automotive Manufacturers of the Philippines, Inc.) and AVID (Association of Vehicle Importers and Distributors) have released their respective projections for 2014 and it is the industry consensus that there will be growth next year.

PGA Cars: It will definitely affect sales, but this is a new challenge which we look forward to surmounting with exciting activities and model launches for 2014.

Lexus Manila: The target market of Lexus are people who are stable in terms of financial resources. However, given the calamities, new purchases may be delayed to some degree, as businesses become involved with the economic recovery of the devastated areas.  We project, though, that growth for luxury cars in general and Lexus in particular will catch up.

Viking Cars: We read in the papers that car sales dipped this November and we expect that it will be so as the country continues to recover from this tragic blow.  We remain positive, however, that with the introduction of our new models and various Volvo ownership options such as the Drive Now Pay in March, that the market will continue to enjoy our cars.

MINI Cooper: Yolanda did affect some of our customers, especially near the devastated area.  Other customers delayed their purchase because they opted to give first to the Yolanda victims.  But we’re picking up again this December.

Q. What are your Corporate Social Responsibility projects?

ACC: BMW has partnered with the Philippine Red Cross for various projects, mainly geared towards relief operations.  Recently, we also partnered with Ecoglobal Foundation, Inc. which aims to help those who are affected by the improper disposal of batteries.  This is in line with our global direction for sustainability programs.

CATS Motors: Cats Motors has been actively supporting charitable causes.  Most, if not all our activities are geared towards helping the community and supporting local initiatives such as Go Negosyo, Filipino Entrepreneurship Summit, Ballet Philippines, Manila Symphony and the Philippine Cancer Society this year.  We also gave cash donations and relief packs prepared by the employees through various television networks and the Philippine Red Cross for the victims of typhoon Yolanda.

PGA Cars: The Porsche Training and Recruitment Center Asia, a scholarship program in cooperation with Don Bosco Technical Institute and Porsche AG and PGA Cars, develops underprivileged Filipino youth to become Porsche Mechatronics with assured employment in the various Porsche Centers around the world.  Now in its fifth year, there are over 150 graduates that have been deployed worldwide and we are very proud of it.

Lexus Manila: Our CSR programs are aligned with Toyota Motor Philippines via the Toyota Motor Philippines Foundation.  Together, we have advocacies in education, health and safety, environment and community service.  Our associates have attended various medical outreach programs in depressed areas and reforestation programs in the Laguna and Cordillera regions.

Viking Cars: We had the Volvo Voice of Leadership, a program that advocates the development of youth leaders who, by eloquently expressing their thoughts and ideas, can become the engines of change.  We have steward development programs that continue to enhance the skills and personality of each employee as well as client information programs that aim to share knowledge to help improve and save lives, for example our pre-emptive safety information to clients and contacts whenever inclement weather is predicted.  These advisories span from fuel-saving measures to calamity preparedness as well as what to do after certain situations that may affect them or their Volvo.  In addition, Volvo Alabang, Volvo Makati and Volvo North Edsa served as drop-off centers for relief goods for the victims of super-typhoon Yolanda.

MINI Cooper: MINI itself contributes to a less polluted environment because of its gas efficiency.  And our MINIs have V-Kool window film, the window film with green attributes. It helps to lessen gas consumption due to its capacity to block and reflect heat while you’re inside the car as it protects your car’s interior.  We also have zero percent waste management for a greener environment.