Hope, humanity roam free among auto companies

The auto manufacturing sector, like the rest of industries, face an extremely difficult road to recovery and regrowth once the COVID-19 pandemic blows over.

As business essentially relies on the movement of people, products, stocks and commodities, the virus has effectively forced governments across the world to grind virtually all commerce to a halt for the health of all its people. For the auto sector, this has been particularly wrenching. The once uber-busy industry saw cancellations of important global events one after another—auto shows, expos, races, new vehicle unveilings, ride-and-drive events, and the like. Those are on top of the higher-impact work stoppages in manufacturing and assembly facilities, corporate offices, dealerships, and allied services.

According to analyst IHS Markit, all these radical developments are bound to make their mark on automakers’ bottom lines. Companies just can’t tell themselves they’ll pick up where they left off; investments made in near-term events cannot be recouped easily. Changed plans will have an impact not only on automakers’ expenses, but also on go-to-market plans for new products that have been in development for years.

And we’re not even talking about when the work stoppages will really be lifted. As of presstime, Europe and the United States are yet to get to the peak of the COVID-19 outbreak, and Asian nations like Hong Kong and China, thought to have passed the worst of the pandemic, are bracing a new wave of outbreaks brought in by foreign travelers.

Now in the middle of the second week of the Luzon-wide enhanced community quarantine (and with many regions in Visayas and Mindanao already declaring their own ECQs days ago), can we already quantify how much this public health disaster has set the local auto industry back? Here are the initial assessments from the perspective of top-level auto executives.

TMP’s Ty: Priority is to fight virus

Alfred V. Ty, chair of Toyota Motor Philippines and Lexus Manila, told Inquirer Motoring via e-mail: “Sadly, the COVID-19 pandemic has definitely shaken the entire economy, not just the auto industry. It is too early to say how much the pandemic will impact our industry or, more importantly, the nation. Rather than focus on the impact to us, however, the priority should be on how we can urgently respond to the call of government to join in the fight against COVID-19 and to help our fellow Filipinos weather this crisis.”

MMPC’s Oshikiri: Too early

Mutsuhiro Oshikiri, President and CEO of Mitsubishi Motor Philippines Corp., e-mailed: “It is difficult to quantify the impact of the pandemic to the automotive industry as we are yet to realize the severity of the COVID-19 spread.”

Kia PH’s Aligada: Assessing unfolding crisis

Kia Philippines president Manny Aligada e-mailed: “The continuing rapid spread of the COVID-19 outbreak across the entire country has adversely affected all aspects of Filipino society and economy, including Kia Philippines’ services, operations, and business activities, both within and outside our corporate settings. Our local automotive industry has not been spared the ill-effects of this global situation. From vehicle and parts shipping, to sales and aftermarket and dealership services, the dedicated and hardworking people who keep our industry running smoothly have had to comply with the government-mandated and safety related measures that include selective work stoppage and work-from-home arrangements to ensure everyone’s well-being, health, and safety. This is an ongoing and unfolding crisis, and we are closely observing and assessing developments as they happen.”

UAAGI’s Sytin: We are all equal in a pandemic

Rommel Sytin, President of the United Asia Automotive Group Inc. (of Foton Motor Philippines Inc. and Chery Auto Philippines), told Inquirer Motoring that the “COVID-19 pandemic is now sweeping all nations globally. During this crisis we are all equal regardless of our religion, status, occupation, and this disease attacks us all equally. We should all look after our health to avoid getting sick. After the quarantine period is over, we will work double time to provide the best service needed by our customers. For now, we will continue to protect our most important human resources and cooperate with the national government’s enhanced quarantine.”

P200M for frontliners

Ty added, “The GT Capital and Metrobank group have made an initial pledge of P200 million to assist our frontliners, and various other groups affected. We are also extending various support programs to our own team members and their families, in addition to providing support for our customers, dealers, suppliers, local government units and other partners. We are absolutely committed to heed the call of government in every way we can.”

Ty is also Metrobank director and GT Capital Holdings vice chairman.

TMP has also been supporting government hospitals in the National Capital Region and Laguna by lending its company vehicles to health workers. Tini Arevalo, TMP first vice president for brand and product planning, explained, “since public transportation is not available, we thought of allocating our company cars to the hospitals.”

“Our health workers walk so far just to go to the hospitals, and on the way home, they face the same challenge,” she added.

Inquirer Motoring also asked these companies the possibility of regaining lost businesses and opportunities, assuming things would be back to normal by mid-April as originally announced.

Oshikiri: Consumer confidence crucial

Oshikiri said: “It would all depend on how fast the consumer confidence could recover. During the quarantine period buyers’ priorities have shifted to (acquiring) basic commodities. (The quarantine period) has taken its toll on the Philippine economy, especially on SMEs (small- and medium-scale enterprises), and employment has been significantly affected in several sectors like service, manufacturing, retail, hospitality and tourism. The sooner these sectors recover, the better for the automotive industry.”

Ty: We have recovered from past crises

“The focus is in getting through this crisis. To talk about recovery at this time will take away our attention from the more pressing and urgent call to action that has been sent by the government to solve this pandemic. We hope this crisis will be over sooner than later. Until then, our concern is on overcoming the difficulties by minimizing disruption to the lives of our people and the nation. We have recovered from other crises in the past, and I am certain we will recover from this one as well. We have the full support of all our partners, including Toyota Motor Corporation and Toyota Motor Asia Pacific in this regard,” Ty responded.

“We can only presume that when the quarantine is lifted and work resumes, it would really depend on how fast the economy gets back on its feet. Transportation is still essential for work to be consummated from point A to point B, so I believe that essential demand for work and lifestyle essentials will continue,” said Ty.

Do the country’s top-level auto executives consider the COVID-19 pandemic as the worst crisis in history the auto industry has faced?

Aligada: Among the most disruptive

Aligada replied: “We consider CoViD-19 as among the most disruptive disasters to hit not just the Philippine automotive industry, but the overall population as a whole, taking into account the number and extent of those affected. For Kia Philippines, more than the financial and operational repercussions, among the most affected are the employees and our partners who depend on their work benefits to sustain them and their families. We continue to be committed to our employees and other stakeholders, and take appropriate measures to protect everyone’s interest.”

Sytin: Forget first half 2020

Sytin said, “This is by far the worst crisis I have experienced, with its sweeping effect on all industries and affecting everyone without exemption.” For him, the first six months of 2020 have virtually gone down the drain. “Sales performances for the first and second quarter of 2020 is out of the question. Annual sales will be greatly affected during this unusual time. Let’s all hope the present pandemic situation will be over soon.”

Oshikiri: Worse than any financial crisis

Oshikiri said: “This is definitely the worst crisis the automotive industry has experienced locally and globally. Global logistics and manufacturing has been affected to a point of stopping production of some manufacturers in China, Korea and Europe. This is also the first time that we had to stop manufacturing for 30 days, which is not normal for any manufacturing facility. Unlike any financial crisis where manufacturing still continues, for this health crisis, total shutdown has been needed to avoid the further spread of the virus.”

Priority on health

Jing Atienza, TMP first vice president for vehicle sales operations, said: “The Toyota Family is one with every Filipino during these challenging times. Our priority remains the health and safety of our team members and customers, and as such we have stopped our plant and office operations in cooperation with the government’s mandate. We do still have some scaled-down activities in essential functions and work-at-home arrangements as aligned with the community quarantine and social distancing guidelines in order for us to continuously support our customers and dealers as much as we can under these circumstances.”

Atienza, added: “For your reference, some of our dealers remain open and continue to serve our customers in Visayas and Mindanao depending on their local situation. There will surely be some effect of the quarantine on TMP and the industry as a whole, but we cannot fully quantify at this time. I am confident though that our auto industry is fundamentally strong and we can quickly bounce back as soon as the conditions normalize.”

Sytin pointed out, “since the beginning of the enhanced community quarantine, our people have complied and worked from home if applicable. We continue to pay them in full during this difficult time, especially those living in vulnerable living conditions.”

Social media helpful

Asked what aspects of the business and operations were still up, Sytin replied: “Practically 100 percent of our workforce are observing enhanced quarantine, except for a few drivers deployed to our free shuttle for medical health workers using our Foton Traveller Van in support of the DOTr (Department of Transportation) initiative.” Sytin added, “social media is the most effective way to communicate with stakeholders right now, especially for our announcements, such as the bank partner amortization reprieve, dealers’ public advisory, and the like.”

Oshikiri: “Social media provides fast dissemination of information to our customers. Through our official social media pages, we can quickly announce information and updates.”

Salary advances, work-from-home

Arevalo revealed that “almost 100 percent of (Toyota) office team members are on a work-from-home arrangement. Almost all of us use laptops, so it was easy to set up at home. Desktops for some were also brought home. Systems access was also arranged. We just have a skeletal workforce for emergency response.” She added that salaries and some benefits were paid out in advance to support team members.

Oshikiri: We have assigned a skeletal work force to address essential tasks, and majority are on a work-from-home basis. We have shut down operations since the implementation of the enhanced quarantine program. This is to align with the government’s goal to lessen the risk of virus spread and assure the safety of our employees.”

He added, “our company has already sent out financial support to our employees. I cannot share specifics, but rest assured that benefits and considerations have been made available to employees to assist them during this trying time.”

Oshikiri disclosed that MMPC has selected a skeletal team for each department to accomplish the following essential tasks. Emergency response and crisis management; Plant protection and maintenance; Legal department to coordinate and comply with local government ordinances; Business continuity and restoration management team; IT maintenance and support to assure work-from-home connectivity and finance and payroll.

“Our head office (in Japan) is in constant communication with us on a daily basis. The safety of our employees is the number 1 priority right now.”

Pinoy resiliency

The executives were unanimous in saying that, though they would not emerge from this disaster unscathed, they would come out stronger.

Aligada: “We would like to assure all our stakeholders, especially our valued employees, our dealership partners, and esteemed customers, that even during these most trying times, we will be available to provide assistance as much as we can.”

Ty: “Judging from the other crisis that we have encountered, what gives me hope is the resiliency of the Filipino people in times of difficulty and the optimism to build up the business, the market, the industry one step at a time.

Oshikiri: “As a resilient company, we are optimistic and confident that we will bounce back. On how fast, it depends on the actual scenario once all have been settled.

“I would like to reassure our customers and stakeholders that despite the current situation, MMPC and its management team are continuously working hard to make sure that essential operations are functioning to guarantee fast business recovery. We are studying all possible assistance programs for our clients to lessen their worries with regard to their vehicle ownership concerns. As for our employees, please know that the company is assessing the situation on a daily basis and all considerations are carefully studied to provide the best support to every member of the organization.

“On a personal level, I would like to use the cliché: Go out and smell the roses. Living in an enhanced quarantine program, you learn to re-appreciate the very basic things that you take for granted. Going out, having a sumptuous meal with family in your favorite restaurant, face-to-face conversations with your family and friends. All have new meaning and value,” said Oshikiri.

Atienza: “As soon we get through this, I would like to go and shake the hands of my fellow team members who are now working so hard from home to serve the needs of our customers and dealers as best as they can.”