automobile retail industry
TRANSCRIPT
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BACHELOR OF SCIENCE IN BUSINESS ADMINISTRATION MAJOR IN MANAGEMENT
School of Management
Unie!"it# of A"ia an$ the %acific
An Analysis of Automobile Retail Industry
S&'mitte$ in %a!tial F&lfillment of the Re(&i!ement" fo!
MGT))*+ In$&"t!# an$ Region Ma!,et Anal#"i"
S&'mitte$ '#+
Amoncio- Ma!tin T.E"colin- JC C.
Ilagan- Ja"on B.
Melen$!e"- Raff# H.
Ti!a/ona-I# N.
S&'mitte$ to+
M!. %at!ic, S. 0eta
Fac<#1In1Cha!ge
Ma!ch )2*3
Table of Contents
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Chapter 1:Industry Proposal
Definition of the Industry
Industry’s Products and Services
Identification of Major Players
Linkages in other sectors in the economy
Relationship of Industry to Macro economy
Chapter 2: Basic Demand and Supply Conditions
Supply Conditions
Production Process
Major Investment Requirements
Raw Materials Sourcing
Sensitivity to Major Supply Factors
Capacity Utilization
Bargaining Power of Suppliers
Demand ConditionsDomestic and Export Market
Demand Determinants
Bargaining Power of Buyers
Chapter 3: Competition
Industry Structure
Major Players in the Industry
Competition from Substitutes
Entry/Exit Barriers
Chapter 4: The Regulatory Environment
Degree of Government RegulationGovernment Regulations Affecting the Industry
Effect of Regulations on the Industry
ASEAN Integration
Chapter 5: Industry Performance
Summary of Five Forces
Analysis of Financial Performance
Critical Success Factors
Key Risk Areas
Chapter6: Industry Prospects for the Next Three Years
Growth Projections
Changes in the Market Share and Industry Structure
Significant Changes in the Five Forces
Chapter 7: Conclusion and Recommendation
Summary and Conclusion
Recommendation
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Chapter I: Industry Background
A. In$&"t!# Bac,g!o&n$
Definition of the In$&"t!#
Acco!$ing to the %hili44ine Stan$a!$ In$&"t!ial Cla""ification 5%SIC6 of )227- the
A&tomo'ile In$&"t!# i" incl&$e$ in the Section G of %SIC Co$e. Thi" "ection incl&$e" 8hole"ale
an$ !etail "ale 5i.e. "ale 8itho&t t!an"fo!mation6 of an# t#4e of goo$" an$ the !en$e!ing "e!ice"
inci$ental to the "ale of the"e goo$. 9hole"aling an$ !etailing a!e the final "te4" in the
$i"t!i'&tion of goo$". Goo$" 'o&ght an$ "ol$ a!e al"o !efe!!e$ to a" me!chan$i"e. Al"o incl&$e$in thi" "ection i" the !e4ai! of moto! ehicle" an$ moto!c#cle".
%SIC CODESection G 9hole"ale an$ Retail T!a$e: !e4ai! of moto! ehicle" an$ moto!c#cle"G!o&4 ; incl&$e all othe! "ale actiitie". The Di"tinction
'et8een Dii"ion ;3 58hole"ale6 an$ Dii"ion ;> 5!etail "ale6 i" 'a"e$ on 4!e$ominant c&"tome!.
The A&tomo'ile In$&"t!# i" al"o incl&$e$ 8ithin Dii"ion ;
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4oli"hing of ehicle"- etc. Thi" $ii"ion $oe" not incl&$e the !etail "ale of the a&tomotie f&el an$
l&'!icating cooling 4!o$&ct" o! the !enting of moto! ehicle" o! moto!c#cle".
The A&tomo'ile in$&"t!# i" incl&$e$ in the cla"" ;
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Se!ice" incl&$e$ a!e $e4en$" on the con$ition of the ca! afte! the 4&!cha"e. If the ca! i"
le"" than th!ee #ea!" ol$ an$ ha" fe8e! than 3-222 mile" 5o! 8hatee! the te!m" of 8a!!ant#
a!e6- mechanical 4!o'lem" 8ill 'e fi=e$ &n$e! the '&m4e!1to1'&m4e! 8a!!ant# fo! no cha!ge.
Ho8ee!- thi" $oe"nt coe! 8ea! item" li,e '!a,e 4a$"- an$ "ince the ca! i" "till coe! &n$e! the
!o&tine maintenance of the $eale!"hi4 fo! 8hich the c&"tome! !e(&i!e" to 4a#. Ro&tine
maintenance i" mo"t often oil an$ filte! change"- ti!e !otation" an$ a!io&" in"4ection". Afte!
a'o&t the length of #o&! 8a!!ant#- the !o&tine maintenance often 'ecome" mo!e inole$ an$
mo!e e=4en"ie- fo! e=am4le- the change of oil ee!# -222 mile"- filte! change- ti!e" !otation-
maintenance !e4ai!"- etc. Bing a ne8 ca! 8ill me!it a co"t of a'o&t %)-
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Inc.- To#ota Moto! Co!4o!ation- an$ Mit"&i Com4an# Limite$. In the #ea! *77 o&tlet" nation8i$e. To#ota" mo$el" incl&$e
@io"- Innoa- Fo!t&ne!- Ra;- Cam!# an$ man# mo!e mo$el". To#ota i" the $i"t!i'&to! of Le=&"
'!an$ in the %hili44ine" an$ al"o incl&$e" a $eale!"hi4 in Met!o Manila 5GT Ca4ital- n.$.6.
Mitsubishi
Moto!" Co!4o!ation i" the longe"t "ta#ing a&tomotie com4an# in the %hili44ine"- an$ it
offe!" 8o!l$1cla"" 4!o$&ct" an$ "e!ice". Mit"&'i"hi ma!,et" *3 mo$el" of ehicle"- 8hich
incl&$e Lance! E=- Monte!o- Mi!age- an$ man# mo!e mo$el". Hi,o"a'&!o Shi'ata i" the hea$ of
the Mit"&'i"hi Moto! Com4an#. The com4an# ma,e" tho&"an$ of ehicle" a #ea!. It ha" *72-));
"(&a!e mete!" in O!tiga" aen&e e=ten"ion. M!. Shi'ata foc&"e" on fo&! mao! conce!n" namel#
Man&fact&!ing- Ma!,eting- La'o! an$ Comm&nit# Inolement. Mit"&'i"hi Moto!" Co!4o!ation
contin&o&" to 4!oi$e c&"tome!" 8ith the 'e"t 4!o$&ct" an$ "e!ice" 5CAM%I- )2*;6.
Hyundai
H#&n$ai 8a" !an,e$ the fifth1la!ge"t a&toma,e!" in the #ea! )22> an$ it incl&$e" t8o
a&to1!elate$ "&'"i$ia!ie". It e=4o!te$ it" fi!"t ma$e ca! calle$ the ?%on#K in *7>3. No8- H#&n$ai
e=4o!t" a million high (&alitie" of ehicle". In )2*)- H#&n$ai "ol$ oe! .3 million ca!"
8o!l$8i$e- an$ &4 to *3. 4e!cent in the #ea! )227. Since it i" em4lo#ing >-222 nation8i$e- it
foc&"e" on im4lementing a ne8 glo'al 4olic# that incl&$e" 4!o$&ct $eelo4ment- $e"ign- "ale"-
ma!,eting- an$ con"&me! "e!ice" to "ati"f# it" c&"tome!" 5H#&n$ai Moto! Com4an#- n.$.6.
Ford
Fo!$ %hili44ine" ha" a fo&! 'illion Lag&na %lant locate$ in G!eenfiel$ a&tomotie 4a!, in
Sta. Ro"a Lag&na. It ha" a ca4acit# of )
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La"tl#- Fo!$ %hili44ine" i" the "econ$ la!ge"t a&tomotie com4an# in the 8o!l$ 5Fo!$
%hili44ine"- )2*
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Relation"hi4 of In$&"t!# to the Mac!oeconom#
The a&tomo'ile !etail ma!,et i" infl&ence$ '# a a!iet# of in$ii$&al feat&!e" an$
mac!oeconomic con$ition". Thi" incl&$e" ne8 ca! $eman$- fi!"t ca! e!"&" !e4lacement ca!
$eman$- &"e$ ca! $eman$- &"e$ an$ ne8 ca! "ale" !atio- ca! 4a!c $en"it# an$ income leel"
5%MG- )2*6
Ee!# a&tomotie !etail ma!,et goe" th!o&gh ce!tain mat&!it# "tage"+ fi!"tl# an ea"#
"elling 4e!io$- it i" cha!acte!i/e$ '# "t!ong ne8 ca! $eman$ lea$ing to the $eelo4ment of a
la!ge an$ !eo!gani/e$ !etail net8o!, "t!&ct&!e- follo8e$ '# a ha!$ "elling 4e!io$- lea$ing to a
con"oli$ation an$ cent!ali/ation of the !etail net8o!,- $&e to $ec!ea"ing fi!"t1ca! $eman$. Each
mat&!it# "tage !e(&i!e" a &ni(&e !etail "t!ateg# an$ $i"tinct "et of management com4etencie"
an$ %I". The"e hae to 'e !e1eal&ate$ a" "oon a" a !etail ma!,et "ho8" "ign" of changing
f!om ea"# to ha!$ "elling mo$e 5%MG- )2*6
%a!t" !etaile!" a!e al"o affecte$ '# the no!mal mac!oeconomic eni!onment- '&t to a
le""e! 4!o4o!tion. Thei! o8n me!chan$i"ing an$ !emo$eling initiatie" an$ &nit $eelo4ment
"t!ategie" infl&ence the"e &"&all# le""1mat&!e- fa"te!1g!o8ing o&tfit". An$ al"o- the# a!e "&'ectto "ec&la! long1te!m t!en$"- incl&$ing fl&ct&ation" in the ol$e!1ehicle 4o4&lation an$ the
n&m'e! of licen"e$ $!ie!". Beca&"e of thei! mo!e att!actie g!o8th 4!ofile"- 4a!t" com4an#
"toc,"- '# an$ la!ge- t!a$e at highe! 4!iceea!ning" m<i4le" than $eale! i""&e". Nota'l#- a'o&t
>2 of all 4a!t" 4&!cha"e" ma$e '# con"&me!" an$ comme!cial c&"tome!" a!e nee$1'a"e$-
!athe! than $i"c!etiona!#. Thi" hel4" to "hiel$ afte!ma!,et 4a!t" !etaile!" f!om &n8elcome
economic hea$8in$" 5@al&e line Co!4.- )2*
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Partnering withAutomaker
Importing
ManagingInventory
DistributingInvetory
OperatingStores
Advertisin
gDemonstration
Negotiating the Sale
Chapter II: Basic Demand and Supply Conditions
A. S&44l# Con$ition"
%!o$&ction %!oce""
Figure 1: Production Process of Autoobi!e "ndustry
A&tomo'ile Retail In$&"t!# i" the '&"ine"" of "elling ne8 an$ &"e$ ca!". The 4!oce""
inole$ in "elling ca!". Deale!"hi4 a$e!ti"e" a&tomo'ile" the# hae aaila'le an$ 4!oi$e a
location fo! 4otential c&"tome!" to "ee the ca!". The "ale"4e!"on then (&alifie" the 4!o"4ect to
"ee 8hat t#4e of a&tomo'ile i" $e"i!e$. He "ho8" o! $emon"t!ate" the ca!. Then the
"ale"4e!"on t!ie" to conince the 4!o"4ect to ' the ca!- often th!o&gh negotiation. If the
$eci"ion i" 4o"itie- the 4!o"4ect 'ecome" the c&"tome! 8ho 4&!cha"e" the ehicle 5&!t&"
)2*)6. The %!o$&ction 4!oce"" of the A&tomo'ile In$&"t!# i" mainl# foc&"e$ on the Mi$"t!eam
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to Do8n"t!eam of the @al&e Chain "ince it" main 4!o$&ction 4!oce"" con"i"t of 'ing an$
"elling.
In concl&"ion- the actiit# of "elling a ne8 o! &"e$ a&tomo'ile con"i"t" of a$e!ti"ing
'eca&"e it let a 4otential c&"tome!" ,no8 8hat i" aaila'le an$ 8he!e to go to "ee it. The"ale"4e!"on then (&alifie" the 4!o"4ect to "ee 8hat t#4e of a&tomo'ile i" $e"i!e$ an$
$emon"t!ate" the ca!. He t!ie" to conince the 4!o"4ect to ' the ca!- often th!o&gh
negotiation. The 4e!"on 8ill eithe! ag!ee to ' the ca! o! go el"e8he!e.
Mao! Ine"tment Re(&i!ement"
The!e a!e oe!
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the total !a8 mate!ial" con"i"t" of ;> of it i" "teel- i" i!on- i" 4la"tic- > al&min&m- an$
gla"" 8ith "teel amo&nting to )) of the total co"t of 4!o$&ction 5H. all"t!om- )2** of it" total "ale" coming f!om A"ia acco!$ing to the a!ticle 4&'li"he$ '# C!ain
Comm&nication" 5)2*6. Den"o co!4. i" !an,e$ ) 8o!l$8i$e fo! a&tomotie 4a!t" "&44lie!" in
)2*) a" "ho8n in the cha!t.
Sen"itiit# to Mao! S&44l# Facto!"
#conoy
The econom# i" a facto! that affect" m<i4le in$&"t!ie". The goo$ econom# 8ill $!ie &4
"4en$ing of the 4o4&lation an$ thi" inc!ea"e$ "4en$ing 8o&l$ !e(&i!e the a&tomotie in$&"t!# tohi!e 8o!,e!" an$ inc!ea"e$ thei! "&44l# in o!$e! to ,ee4 &4 8ith the g!o8ing nee$" of the
4o4&lace. An econom# that i" e=4e!iencing a !ece""ion on the othe! han$ 8o&l$ hae to la# off
8o!,e!" a" a !e"< of the !e$&ce "4en$ing of the 4eo4le $&e to the !ece""ion. The a&tomotie
in$&"t!# 8o&l$ hae to !e$&ce thei! "&44l# in o!$e! to contin&e to 'ecome 4!ofita'le in the"e
time".
Price of $a% Materia!s
Anothe! facto! that affect" the "&44l# of the a&tomotie in$&"t!# i" the 4!ice of !a8
mate!ial". Since the co"t of !a8 mate!ial" of a&tomotie man&fact&!e!" to 4!o$&ce a "ingle
ehicle i" ;> of the total co"t 5H. all"t!om. )2*
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man&fact&!e!" 8ante$ to ta,e a$antage of the !i"ing $eman$ in metal". Thi" ca&"e$ To#ota to
8a!n thei! ca! an$ 4a!t" "&44lie!" "o the# co&l$ a$&"t 4!ice" an$ aoi$ a $ec!ea"e in 4!ofit".
&overnent Po!icies
Reg&lation" an$ !&ling" ma$e '# the goe!nment ma# al"o affect the "&44l# of the
a&tomotie in$&"t!#. It i" mentione$ in To#ota" !e4o!t on !i", facto!" 5)2**6 that the la8" an$
!eg&lation" ma$e '# the goe!nment heail# affect the in$&"t!#. In$&"t!ie" a!e !e(&i!e$ to fin$ a
8a# follo8 the ehicle "afet#- minim&m emi""ion leel"- an$ noi"e leel" "et '# the goe!nment
8hile "till 'eing a'le to ,ee4 the 4!ice $o8n fo! the con"&me!". Othe! !eg&lation" that affect the
in$&"t!# a!e la8" that affect !a8 mate!ial" "&ch a" mining 'an. M. Rame"h 5)2**6 mention" in
an a!ticle that the a&tomotie in$&"t!# fea!" "ho!tage of !a8 mate!ial" $&e to goe!nment in
a!nata,a i""&ing a mining 'an. The a!ticle mention" that th!ee $iffe!ent man&fact&!e!" &"e
mate!ial f!om that mine in o!$e! to 4!o$&ce c#lin$e! 'loc," an$ hea$" that ma,e &4 a&tomo'ile
engine".
Natura! 'a!aities
Fo!t&ito&" eent" "&ch a" ea!th(&a,e" an$ "to!m" hae an effect on the "&44l# of man#
$iffe!ent in$&"t!ie". One e=am4le of a nat&!al calamit# that heail# affecte$ the "&44l# of the
a&tomotie in$&"t!# i" the G!eat Ea"t Ja4an Ea!th(&a,e in Ma!ch of )2**. To#ota" Ri", Facto!"5)2**6 mention" that To#ota ha$ to "to4 all of it" o4e!ation" $&e to the $amage" the ea!th(&a,e
ca&"e$. To#ota !e4o!te$ that it 8a" a'le to !e"&me o4e!ation" a" of A4!il of )2** fo! it"
$ome"tic facto!ie" '&t facto!ie" oe!"ea" 8e!e "till &na'le to !et&!n to f&ll o4e!ation" a" of
Decem'e! )2**.
Ca4acit# Utili/ation
Ca4acit# Utili/ation !ate mea"&!e" the !ate of 4otential o&t4&t leel" a!e 'eing met. In a'&"ine"" 8o!l$- if a com4an# i" !&nning at >2 ca4acit# !ate- it ha" !oom to inc!ea"e 4!o$&ction
&4 to a *22 &tili/ation !ate 8itho&t inc&!!ing the e=4en"ie co"t" of e(&i4ment. Ca4acit#
&tili/ation !ate" can al"o 'e &"e$ to $ete!mine the leel at 8hich &nit co"t" 8ill !i"e
5Ine"to4e$ia6.
**
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In the A&tomotie Retail In$&"t!#- the a&tomotie !etail in$&"t!# can 'e 'a"e$ acco!$ing
to n&m'e!" of a&tomo'ile 4!o$&ce$ com4a!e$ to the n&m'e! of "ol$ ca!". Acco!$ing to the
!e4o!t of CAM%I an$ A@ID- the in$&"t!#" ta!get of *2-222 &nit" i" fo! the enti!e #ea!. The ta'le
'elo8 "ho8" that fi!"t half "ale" 5Jan&a!# to J&ne6 of A&tomo'ile Retail In$&"t!# in the
%hili44ine" 5In(&i!e!- )2*
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B. Deman$ Con$ition"
Dome"tic Ma!,et
The %hili44ine" ha" the fifth lo8e"t ca! o8ne!"hi4 in the 8o!l$- 8ith a'o&t ;> 4e!cent of
Fili4ino ho&"ehol$" not o8ning a ca!- acco!$ing to the Niel"en Glo'al S&!e# of A&tomotie
Deman$. 5GMA Ne8" Online- )2*;6. F&!the!mo!e- the %hili44ine" a!e among the To4 *2
co&nt!ie" glo'all# 8ith the highe"t intention to ac(&i!e a ca! 8ithin the ne=t t8o #ea!". The
"&!e# "ho8e$ >3 4e!cent of Fili4ino" 8o&l$ ' a ca! in the ne=t t8o #ea!".
The A&tomotie $eman$ in the %hili44ine" ha" 'een !elatiel# lo8 an$ fo! man#
ho&"ehol$" o8ning a ca! ha" 'een financiall# o&t of !each 5Jamie"on- )2*;6. Ho8ee!- it i"
e=4ecte$ that a mo!e "t!ong a&tomotie $eman$ in the ne=t #ea!" a" mo!e ho&"ehol$" oin the
mi$$le cla"" an$ !each the financial mean to ma,e thei! fi!"t ca! 4&!cha"e.
Among So&thea"t A"ian ca! o8ne!"- Fili4ino" at >) 4e!cent a!e the fifth highe"t glo'all#
8ho ie8 a ca! a" an im4o!tant "#m'ol of the "&cce"" the# hae achiee$ in life. In the
%hili44ine "etting- almo"t mao!it# of the con"&me!" in the %hili44ine" a!e mi$$le cla""- Fili4ino"
a!e not onl# in a 'ette! 4o"ition to ' the thing" the# 8ant an$ nee$- the# a!e al"o loo,ing toma,e 4&!cha"e" 8hich $emon"t!ate thei! im4!oing "ocial "tat&" 5Jamie"on- )2*;6. Ca!
o8ne!"hi4 i" the <imate "#m'ol of the "&cce"" the# hae achiee$ 5GMA Ne8" Online- )2*;6.
E=4o!t Ma!,et"
In the %hili44ine A&tomo'ile Retail In$&"t!# it i" gien that o&! co&nt!# $o im4o!t ehicle"
to an$ not e=4o!t. The e=4o!t goo$" 5e(&i4ment an$ 4a!t" 4!o$&ce$ locall#6 lie" on the
A&tomo'ile Man&fact&!ing In$&"t!# that a!e then &"e$ '# the mo"t mao! 4la#e!" in the in$&"t!#.
Deman$ Dete!minant"
Financing (ptions
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"ncoe (f 'onsuer ) *uyer
The income of the con"&me! o! 'e! of the ca! i" a e!# im4o!tant facto! of $eman$.
9ith g!o8ing economic e=4an"ion an$ g!o8th of the mi$$le cla""- the %hili44ine a&tomo'ile
in$&"t!# "ho8e$ an o&t"tan$ing 4e!fo!mance th!o&gho&t la"t #ea! an$ ea!l# )2*
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The 'a!gaining 4o8e! of 'e!" i" !elatiel# high. Ne8 ehicle 'e!" li,e to "ho4
a!o&n$- collecting a 8ealth of info!mation on the Inte!net an$ &"ing it to negotiate 8ith man#
$eale!". In a$$ition- 'eca&"e "8itching co"t" a!e lo8 an$ ne8 $e"ign" a!e 8ell $iffe!entiate$- it
i" 4o""i'le that a ma!,et t!en$ att!act" la!ge "ha!e" of the 'e! ma!,et f!om one a&toma,e! to
anothe!. Con"e(&entl#- The net effect i" high 'e! 4o8e!.
*3
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Chapter III: Competition
a. In$&"t!# St!&ct&!e
The!e a!e t8o metho$" that can 'e &"e$ to i$entif# an In$&"t!# St!&ct&!e. One metho$ i"
the He!fin$ahl In$e= an$ the Fi!m Concent!ation Ratio. In thi" anal#"i"- the He!fin$ahl In$e= 8ill
'e &tili/e$ in the com4&tation of the "t!&ct&!e of the A&tomo'ile Retail In$&"t!#. The fo!m&la of
the He!fin$ahl In$e= i" a" follo8"+
Σ [ salesof a firm
totalindustry sales ]2
Follo8ing the fo!m&la of the He!fin$ahl In$e=- an$ acco!$ing to the De4a!tment of T!a$e an$
In$&"t!# 5DTI6- the total ann&al o&t4&t of the A&tomotie In$&"t!# in the %hili44ine" al&e$ 31
Billion 4e"o". The total "ale" a!e $ii$e$ f!om the to4 th!ee fi!m"+ To#ota- Mit"&'i"hi- an$ Fo!$
8hich a!e 5*3 Billion6- 5%37 Billion6- an$ 5%) Billion6 !e"4ectiel#. The com4&tation fo! the
ma!,et "t!&ct&!e of the in$&"t!# i" "ho8n 'elo8+
[168Billion
368 Bilion ]2 Q
[ 69Billion
368Billion ]2 Q
[ 32Billion
368Billion ]2 .)>< o! )
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168 Billion+69 Billion+32 Billion
368 2.>27>) o! >
The A&tomo'ile In$&"t!# i" &n$e! the Oligo4ol# 'eca&"e the in$&"t!# lac," com4etition
an$ 4!o$&ct $iffe!entiation that a!e "o&!ce" of ma!,et 4o8e!. An$ al"o- the!e i" onl# a fe84!o$&ce!" 8ho 4!o$&ce an a&tomo'ile "ince the in$&"t!# !e(&i!e" la!ge ca4ital !e(&i!ement"
'efo!e ente!ing the ma!,et. In effect- the!e i" onl# limite$ n&m'e! of fi!m" that can ente! into the
A&tomo'ile In$&"t!# in the %hili44ine Ma!,et. 5Gilani- )2* 4e!cent f!om it" 4a"t 4e!fo!mance of ;.2 4e!cent in the "ame 4e!io$ la"t #ea!.
The total !een&e of the a&tomotie in$&"t!# gene!ate$ 4!o$&ction al&e$ at %31'illion 8hile
the total "ale" of TM% gene!ate$ &4 to *3; Billion 4e"o". The "t!ong "ale" of To#ota la"t month
8e!e ma$e 4o""i'le th!o&gh the contin&o&" high $eman$ of it" 'e"t1"elling ehicle in the
%hili44ine"- the @io"- 8ith "ale" of )-2*) &nit". Othe! "t!ong mo$el" in To#ota" line1&4 "&ch a"
the Fo!t&ne!- Innoa- 9igo- Hil&=- Aan/a an$ Co!olla Alti" a!e f&!the! "t!engthene$ $&!ing
Fe'!&a!#" "ale".
ii. O4e!ation"- Location" of O4e!ation"- Mao! Ma!,et"
The man&fact&!ing 4lant an$ hea$ office a!e locate$ in Santa Ro"a Cit#- Lag&na. It i" a
)1hecta!e" 8hich the# call the To#ota S4ecial Economic 0one. It i" al"o home to a n&m'e! of
ine"to!" 4e!fo!ming "t!ategic !ole" in the man&fact&!e an$ e=4o!t of a&tomotie 4!o$&ct" to
*
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ASEAN- Ja4an- an$ othe! 4a!t" of the 8o!l$. TM%" man&fact&!ing 4lant 4!o&$l# 4!o$&ce" the
Innoa an$ @io". It i" ca4a'le of 4!o$&cing
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Mitsubishi Motor hilippines
i. Ma!,et "ha!e
The Mit"&'i"hi Moto! %hili44ine" i" at the "econ$ lea$ing ma!,et "ha!e of *.>; 5CAM%I-
)2*
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The MM%C 4!e"i$ent an$ chief e=ec&tie office! i" M!. o"hia,i ato. He i" al"o ha$ a
"ignificant 4o"ition" in Mit"&'i"hi com4anie" in $iffe!ent 4a!t" of the 8o!l$ 5%alana- )2*
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'a"eK acco!$ing to an a!ticle in Ra44le! 5)2*)6. The a!ticle "tate" that een tho&gh Fo!$"
man&fact&!ing in the %hili44ine" ha" en$e$ it 8ill "till contin&e it" !etailing o4e!ation" an$ een
e=4an$e$ to *) a$$itional $eale!"hi4" totaling < 8ithin the 8hole %hili44ine".
Fo!$ !etaile!" a!e all oe! the %hili44ine" that incl&$e 4!oince" an$ citie" "&ch a" Iloco"
No!te- Ce'&- Bohol- Met!o Manila an$ 0am'oanga 5Fo!$- n.$6. Fo!$ ha" it" la!ge"t amo&nt of
!etaile!" in Met!o Manila 8ith 3 $eale!" in &e/on Cit#- * in Manila- M&ntinl&4a- Tag&ig-
%a!ana(&e- Tag&ig- an$ ) in San J&an 5Fo!$- n.$6.
In !ecent #ea!" Fo!$ ha" 'een 8o!,ing to e=4an$ it" ta!get ma!,et. C&nningham 5n.$6
8!ote that one of Fo!$" 'igge"t g!o8th a!ea" of "ale" a!e *1); #ea! ol$. Beca&"e of thi" Fo!$
ha" $eci$e$ to e=4an$ it"elf f&!the! into that ta!get ma!,et '# t!#ing to integ!ate the &"e of
technolog# into thei! ehicle". Fo!$ i" t!#ing to integ!ate technolog# into the mo$e!n a&tomo'ile
8itho&t ?4!omoting $!ie! mo'ile &"ageK a" to aoi$ acci$ent" 5C&nningham- n.$6.
iii. O8ne!"hi4 an$ Length of %!e"ence in the In$&"t!#
In *73 Hen!# Fo!$- the fo&n$e! of Fo!$ Moto! Com4an#- '&il$" the +uadricyc!e’ 8hich
8a" 4o8e!e$ '# a ; ho!"e 4o8e! engine an$ ha$ ; 'ic#cle 8heel". The +uadricyc!e’ co&l$ 'e
"ai$ to 'e a 4!otot#4e of to$a#" mo$e!n a&tomo'ile. Hen!# Fo!$ then oin" the Det!oit
A&tomo'ile Com4an# in *77 '&t it 8a" not &ntil *72 that Fo!$ Moto! Com4an# i"inco!4o!ate$. It 8a" in *7* that Fo!$ "ta!te$ &"ing the a""em'l# line to 4!o$&ce a&tomo'ile".
The Fo!$" a""em'l# line 4!oe$ to 'e one of the mo"t im4o!tant innoation" a" it 8a" a'le to
"ignificantl# c&t the amo&nt of time nee$e$ to 4!o$&ce a "ingle a&tomo'ile. In )22 Fo!$ Moto!
Com4an# cele'!ate$ it" *22th #ea! annie!"a!# an$ to thi" $a# "till contin&e" to 'e one of the
8o!l$" to4 a&tomotie man&fact&!e! an$ !etaile! 5Fo!$- n.$.6.
A" "tate$ in Fo!$ Com4an#" co!4o!ate 8e'"ite the c&!!ent %!e"i$ent an$ Chief
E=ec&tie Office! of the com4an# i" Ma!, fiel$" "ince )2*;. Fiel$" "ta!te$ 8o!,ing at Fo!$Moto!" Com4an# in *77 an$ hol$" a $eg!ee in economic" a" 8ell a" an MBA f!om Ha!a!$
'&"ine"" "chool acco!$ing to hi" 4!ofile at Fo!$" co!4o!ate 8e'"ite. The c&!!ent E=ec&tie
Chai!man of the com4an# i" 9illiam Cla# Fo!$ J!. 9illiam Fo!$ ea!ne$ a ma"te!" $eg!ee in
management f!om Ma""ach&"ett" In"tit&te of Technolog# a" 8ell a" an hono!a!# Docto! of
Eni!onmental Science" an$ Enginee!ing $eg!ee f!om %C Unie!"it#- hono!a!# $octo! of la8"
))
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f!om Unie!"it# of Michigan- an$ hono!a!# $octo! of h&mane lette!" $eg!ee f!om B!a$le#
Unie!"it# 5Fo!$ n.$6. The managing $i!ecto! of Fo!$ %hili44ine" i" a# Ha!t 8ho 8a" a44ointe$
'ac, in )2*. a# Ha!t ha" 'een 8o!,ing a" Deale! Deelo4ment an$ Fiel$ O4e!ation" Di!ecto!
of the com4an# "ince )227 5Fo!$ %hili44ine"- )2*6.
i. Rial!# St!ategie" fo! Com4eting
Fo!$" ma!,et 4enet!ation hel4" them to 'e one of the 'e"t "elling ehicle" in the
%hili44ine". The# "ell mo!e 4!o$&ct" to thei! c&"tome!" an$ it ena'le" them to g!o8 a" a
'&"ine"". Fo!$ a n&m'e! of $eale!"hi4 an$ inc!ea"ing thei! "ale" ol&me. Fo!$ offe!" ne8
4!o$&ct" to it" c&"tome!"- an$ the# ine"t ne8 4!o$&ct" th!o&gh R an$ D 5Fo!$ Foc&" Elect!ic6.
In cont!a"t- Fo!$" 8ea,ne"" i" thei! ma!,et $eelo4ment. Fo!$ ha" not #et ta,en an# action to
ente! ne8 in$&"t!ie" an$ "egment 5Me#e!- %. )2*.7- an$ "ol$ oe! *;-222 &nit". In
a$$ition- it inc!ea"e$ it "ale" '# 37. 5?I"&/& hol$ ma!,et "ha!e+ Maintain" thi!$ "4ot inin$&"t!# "ale"K )2*
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I"&/& "ta!te$ in the %hili44ine" in the #ea! *77)- Gene!al Moto!" ha$ a
4a!tne!"hi4 8ith I"&/& to '&il$ the Gene!al Moto!"- an$ in *77
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the %hili44ine"- e"4eciall# Met!o Manila- getting 8o!"e ee!# $a#- the n&m'e! of 4eo4le loo,ing
fo! "&'"tit&te" to a&tomo'ile" i" g!o8ing in o!$e! fo! them to aoi$ the !&"h ho&! t!affic.
I. Bic#cle In$&"t!#
Fi!"t that 8ill 'e $i"c&""e$ i" the 'ic#cle in$&"t!# in the %hili44ine". Ri$ing a 'ic#cle i" an
eni!onment1f!ien$l# alte!natie to &"ing a&tomo'ile" a" 8ell a" a healthie! choice $&e to the
e=e!ci"e gien '# !i$ing a 'i,e. The in$&"t!# ha" 'een g!o8ing an$ the goe!nment "a8 the
'enefit" of &"ing 'ic#cle" in"tea$ of a&tomo'ile". The goe!nment file$ a 'ill calle$ the ?Bic#cli"t
Act of )2*;K that enco&!age$ 4eo4le to !i$e 'ic#cle" to thei! $e"tination" in o!$e! to !e$&ce
t!affic an$ 4oll&tion in the %hili44ine". Acco!$ing to an a!ticle 8!itten '# F. Ro$!ig&e/ 5)2*;6- the
'ill 8ill e"ta'li"h Local Bi,e8a# Office" ac!o"" all citie" an$ m&nici4alitie" in the co&nt!#. The
a!ticle mention" that the Re4. Emi Cali=to1R&'iano f!om %a"a# cit#- the !e4!e"entatie 8ho file$
the 'ill- "ai$ that the!e i" a nee$ fo! 'ette! inf!a"t!&ct&!e fo! the 4!oect" 4!o4o"e$ '# thi" 'ill to
8o!,. F. Ro$!ig&e/ 5)2*;6 al"o mention" in thi" a!ticle that one of the 4!oi"ion" of the 4!o4o"e$
'ill i" to hae a "#"tem to !egi"te! 'i,e"- !e(&i!e !i$e!" to 8ea! 4!o4e! "afet# e(&i4ment- a" 8ell
a" the c!eation of 4a!," fo! lei"&!el# 'i,e !i$e". If Cong!e"" 4a""e" 'ill" "&ch a" the"e- mo!e
an$ mo!e 4eo4le 8ill "8itch to !i$ing 'ic#cle" in"tea$ of en$&!ing the ho!!i'le !&"h ho&! t!affic.
Thi" 8ill ce!tainl# ca&"e the $eman$ fo! a&tomo'ile" to !e$&ce in the f&t&!e.
J&"t la"t )2*;- T!e,- the 8o!l$" la!ge"t 'i,e '!an$ ha" &"t o4ene$ it" fi!"t "to!e in the%hili44ine" at Bonifacio Glo'al Cit# acco!$ing to R. Fe!nan$e/ 5)2*;6. The "to!e offe!" T!e,"
f&ll !ange of 4!o$&ct" !anging f!om !oa$ 'i,e"- mo&ntain 'i,e"- an$ cit# 'i,e". T!e, Bi,e"
"t!ateg# in thei! fi!"t %hili44ine '!anch i" to allo8 it" c&"tome!" to tho!o&ghl# c&"tomi/e thei!
'ic#cle" acco!$ing to thei! nee$" th!o&gh T!e," %!oect One c&"tomi/ation 4!og!am 5R.
Fe!nan$e/- )2*;6. T!e," c&"tome!" 8o&l$ 'e a'le to c&"tomi/e the 4aint o' of thei! 'ic#cle"
a" 8ell a" choo"e "4ecific mo$ification" of ce!tain 4a!t" of the 'i,e. T!e, al"o ha" a "#"tem
calle$ ?%!eci"ion FitK that mea"&!e" the !i$e!" efficienc# on thei! 'ic#cle to hel4 them choo"e
the !ight one. The 4!ice of T!e, 'ic#cle" !ange" f!om *)2221>22222 %H%. Thi" offe!" a chea4e! an$ mo!e eni!onmentall# f!ien$l# alte!natie to a&tomo'ile" e"4eciall# in the heail# 4o4&late$
a!ea" in the %hili44ine" "&ch a" Met!o Manila.
Anothe! '!an$- Shimano that i" a Ja4ane"e 'ic#cle ma,e! ha" o4ene$ a %*.)B facilit#
in Batanga" to man&fact&!e $iffe!ent 'ic#cle 4a!t" a" 8ell a" acce""o!ie" 5L. De"i$e!io- )2*
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The facilit# in Batanga" i" Shimano" fi!"t 8ithin the co&nt!# an$ em4lo#" *222 8o!,e!" $&!ing
it" o4e!ation". A" "tate$ in the a!ticle- Shimano i" a fi!m that ha" ;2 facto!ie" an$ "ale" office"
8ith a!o&n$ *222 em4lo#ee" an$ o4e!ate" in mo!e than )2 $iffe!ent co&nt!ie".
9ith the g!o8ing health an$ eni!onmental con"cio&"ne"" of the 4eo4le a" 8ell a" the
te!!i'le t!affic con$ition" in the %hili44ine"- the 'ic#cle in$&"t!# i" 'ecoming a la!ge! th!eat to the
a&tomotie in$&"t!# ee!# $a#.
II. Rail T!an"4o!t In$&"t!#
The !ail t!an"4o!tation in$&"t!# i" al"o a "&'"tit&te of the a&tomotie in$&"t!# that the#
m&"t com4ete again"t. An o4e!ato! of !ail t!an"4o!tation 8ithin the %hili44ine" i" the goe!nment
o8ne$ %hili44ine National Rail8a#". Acco!$ing to %NR" co!4o!ate 4!ofile 5n.$6- the com4an#
8a" officiall# fo!me$ $&!ing the S4ani"h colonial e!a in Noem'e! );- *7) 8hich 8a" then
calle$ a" the Ferrocarri! de Mani!a,-agupan an$ then !ename$ to the Manila Rail!oa$ Com4an#
$&!ing the Ame!ican colonial e!a an$ !ename$ once again in J&ne )2- *73; '# Re4&'lic Act No.
;*
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D&e to the 8o!"ening t!affic con$ition" in Met!o Manila- mo!e an$ mo!e 4eo4le a!e
con"i$e!ing ta,ing the MRT an$ LRT line" a!e "&'"tit&te" fo! a&tomo'ile t!an"4o!tation "&ch a"
4!iate ca!" o! '&"e". Acco!$ing to the %hili44ine ea! Boo, of )2*- the !een&e an$ n&m'e!
of 4a""enge!" fo! the !ail8a# in$&"t!# inc!ea"e "ignificantl# f!om )2*) to )2*. The !e4o!t
"ho8" that in )2*) the total n&m'e! of !ail8a# 4a""enge!" in )2*) amo&nte$ to *) 8ith
!een&e of **-**2-2;> 4e"o" an$ in )2* the"e n&m'e!" inc!ea"e$ to *7-7-32; 4a""enge!"
an$ );-7-)7) 4e"o". Thi" "ho8" that mo!e 4eo4le a!e 8illing to "&'"tit&te a&tomo'ile
t!an"4o!tation fo! !ail8a# t!an"4o!tation- 8hich i" mo"t li,el# $&e to the hea# t!affic in Met!o
Manila.
Ba!!ie!" to Ent!#E=it
'apita! $e.uireents: High
One of the 'a!!ie!" to ent!# in the a&tomotie !etail in$&"t!# i" the e=t!emel# high amo&nt
of ca4ital that i" !e(&i!e$ to 4&!cha"e 4h#"ical "to!e"- !a8 mate!ial" that" going to 'e &"e$- a"
8ell a" to hi!e an$ t!ain em4lo#ee"- an$ al"o the "e!ice" each a&tomotie !etail ha" to offe! in
o!$e! to com4ete 8ith it" com4etito!". Beca&"e of the high co"t in ca4ital a" of to$a# the!e a!e
no local a&tomo'ile !etaile!" in the %hili44ine" the!e a!e onl# fo!eign com4anie" li,e To#ota-
Mit"&'i"hi etc that 8a" a'le to 4enet!ate the ma!,et. The!e a!e a lot of fo!eign a&tomo'ile !etail
com4anie" that ha" 4enet!ate$ the ma!,et in the co&nt!# 'eca&"e the# all hae e"ta'li"he$them"ele" a" to4 '!an$" in thei! o8n !e"4ectie co&nt!ie" an$ all of the Fili4ino" t!&"t" them
al!ea$# 'eca&"e of the c!e$i'ilit# that the# "ho8e$ 5Ine"to4e$ia- N.D6
Product -ifferentiation: High
Each t#4e of a&tomotie !etail f!anchi"e 8ill hae thei! o8n &ni(&e facto!" that affect the
$eman$ fo! thei! "e!ice" in o!$e! to att!act c&"tome!" an$ to "tan$ o&t in the in$&"t!# 'eca&"e
of the nat&!e of the in$&"t!#. So it" im4o!tant to &n$e!"tan$ 8hat tho"e facto!" a!e. Thecom4anie" can &"e thei! o8n "4in to it in the in$&"t!# in o!$e! to ac(&i!e '!an$ lo#alt# to the
c&"tome!". Li,e fo! e=am4le the!e a!e com4anie" that offe! chea4 ca!" "o that "ome 4eo4le can
affo!$ them. To#ota can atte"t to thi" 'eca&"e one of thei! to4 "elling ehicle" i" @io". Some ta=i
com4anie" in the %hili44ine" &"e @io" a" thei! '!an$ of choice 'eca&"e it" chea4 an$ the ga" i"
$&!a'le it can la"t fo! $a#". The com4anie" al"o hae thei! o8n 4!omo" that can 'e &"e$ to
)>
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att!act c&"tome!". The a&tomotie !etail 4h#"ical "to!e" al"o 4la#" a 'ig !ole in $iffe!entiating
them"ele" f!om the com4letion. The!e a!e "to!e" that a!e 'ig in a!ea o! "mall. The "i/e of the
"to!e" $ete!mine" ho8 man# ehicle" a ca! com4an# can "to!e in o!$e! to "ho8 to the 4&'lic.
O'io&"l# the 'igge! the "to!e the!e" a 8i$e a!iet# aaila'le the "malle! the "to!e limite$
5%e!ge!"on- )2*
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The a&tomotie !etail in$&"t!# ha" high e=it 'a!!ie!"- 8hich mean" that fi!m" 8o&l$ !athe!
,ee4 com4eting 8ith each othe! than to clo"e thei! '&"ine""- 'eca&"e of the high co"t" an$
ine"tment". It 8o&l$ 'e a 8a"te if the# &"t $eci$e$ to e=it o&t the ma!,et. Unle"" the# a!e
'an,!&4t 8hich a not 8ell1,no8n ca! com4an# might hae a 4!o'lem 8ith.
)7
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Chapter I&: The Regulatory 'n(ironment
A. Deg!ee of Goe!nment Reg&lationGoe!nment Reg&lation" affecting the in$&"t!#
*. EECUTI@E ORDER No. >>- ". )2*2+ The Com4!ehen"ie Moto! @ehicle Deelo4ment
%!og!am). EECUTI@E ORDER NO. *)+ The com4!ehen"ie A&tomotie St!ateg# %!og!am
S#'T"(N 1/ 'oprehensive Autootive $esurgence Strategy Progra. The
Com4!ehen"ie A&tomotie Re"&!gence St!ateg# %!og!am- he!ein !efe!!e$ to a" the
"tim&late $eman$ an$ effectiel# im4lement in$&"t!# !eg&lation" that 8ill !eitali/e theh&'.
The th!&"t of thi" %!og!am i" to 4!oi$e time1'o&n$- an$ o&t4&t o! 4e!fo!mance1'a"e$
fi"cal "&44o!t to att!act "t!ategic ine"tment" in the man&fact&!ing of moto! ehicle" an$
4a!t" the!eof. Othe! non1fi"cal mea"&!e" al!ea$# 4!oi$e$ '# e=i"ting la8"- !&le" an$
!eg&lation"- "hall contin&e to 'e "#"tematicall# im4lemente$ '# the !eleant goe!nment
agencie".
S#'T"(N 0/ 'overage. The CARS %!og!am "hall 'e limite$ to the man&fact&!e of th!ee
56 Mo$el" of fo&!18heele$ moto! ehicle"- an$ "hall coe! the follo8ing actiitie"+
• %!o$&ction of the en!olle$ Mo$el":
• Man&fact&!e of Bo$# Shell A""em'l# an$ La!ge %la"tic A""em'lie" of the
Mo$el:• Man&fact&!e of Common %a!t" an$ St!ategic %a!t" not c&!!entl# 4!o$&ce$ in
the co&nt!# at O!iginal E(&i4ment Man&fact&!e! 5OEM6 "tan$a!$" of the
Mo$el": an$• Sha!e$ Te"ting Facilit# fo! ehicle" an$o! 4a!t".
2
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S#'T"(N / Functions of the *(" . The BOI- a" the lea$ im4lementing an$ coo!$inating
agenc# of the CARS %!og!am- "hall 4e!fo!m the follo8ing+
• Act &4on the !ecommen$ation" of the Inte!1Agenc# Committee on
A&tomotie In$&"t!# Deelo4ment e"ta'li"he$ &n$e! Section < of thi"E=ec&tie O!$e!:
• Oe!"ee the im4lementation of the CARS %!og!am:
• S&'mit the ann&al !e4o!t on the 4e!fo!mance of the CARS %!og!am to the
Office of the %!e"i$ent 5O%6:
• Coo!$inate a&tomotie in$&"t!# $eelo4ment effo!t" of all conce!ne$
agencie" an$ in"t!&mentalitie" of the goe!nment: an$
• %e!fo!m "&ch othe! act"- a" ma# 'e nece""a!# o! inci$ental to the e=e!ci"e of
it" f&nction an$ 4o8e!" an$ the $i"cha!ge of it" $&tie" &n$e! thi" O!$e!.
S#'T"(N 2/ "nter,agency 'oittee on Autootive "ndustry -eve!opent . An Inte!1
agenc# Committee on A&tomotie In$&"t!# Deelo4ment- he!ein !efe!!e$ to a" ?the Inte!1
agenc# Committee-K i" he!e'# c!eate$ to a$mini"te! an$ im4lement the CARS %!og!am.
The De4a!tment of T!a$e an$ In$&"t!#1BOl !e4!e"entatie "hall act a" Chai!4e!"on of
the Inte!agenc# Committee- 8ith mem'e!" f!om the follo8ing+
• De4a!tment of Finance 5DOF6:
• De4a!tment of T!an"4o!tation an$ Comm&nication:
• De4a!tment of Science an$ Technolog#:
• National Economic an$ Deelo4ment A&tho!it#:
• Technical E$&cation an$ S,ill" Deelo4ment A&tho!it#:
*
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• The Co1Chai!man of the In$&"t!# Deelo4ment Co&ncil: an$
• The Co1Chai!man of the National Com4etitiene"" Co&ncil.
The BOI "hall al"o act a" the Sec!eta!iat of the Inte!1Agenc# Committee.
S#'T"(N 3/ 'riteria for #nro!!ent of a Mode! ) The c!ite!ia fo! the en!ollment of a Mo$el
"hall 'e 'a"e$ on- '&t not limite$ to- the follo8ing+
• T!ac, !eco!$ an$ Mo$el com4etitiene"":
• Ne8 ine"tment" in Bo$# Shell A""em'l# an$ La!ge %la"tic %a!t" A""em'lie":
• %lanne$ ol&me- a" ma# 'e $ete!mine$ '# BOI- '&t in no ca"e lo8e! than
t8o h&n$!e$ tho&"an$ 5)22-2226 ehicle" oe! the Mo$el Life &4 to a
ma=im&m of 3 #ea!":
• Economic im4act of the ine"tment 4lan fo! the Mo$el- incl&$ing im4act on
the 4a!t" man&fact&!ing in$&"t!# an$ lin,age"- o'" gene!ation- an$ oe!all
con"&me! 8elfa!e:
• Oe!all com4etitie eni!onment an$ long1te!m in$&"t!# $eelo4ment: an$
• Com4liance 8ith f&el efficienc# an$ emi""ion leel "tan$a!$" a" ma# 'e
$ete!mine$ '# BOI- 8hich in no ca"e "hall 'e lo8e! than the "tan$a!$" &n$e!
the Clean Ai! Act.
S#'T"(N 4/ #!igibi!ity and +ua!ifications of Participants/ The 4a!tici4ating Ca! Ma,e!"-
%a!t" Ma,e!" an$ Sha!e$ Te"ting Facilit# %!o4onent m&"t meet the follo8ing
(&alification"- an$ "&ch othe! c!ite!ia a" ma# 'e !e(&i!e$ '# BOI+
)
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Minim&m &alification" fo! Ca! Ma,e!"+
• An inte!nationall#1!ecogni/e$ Ca! Ma,e!'!an$ o8ne! an$o! it" a&tho!i/e$ in co&nt!#
licen"e$ man&fact&!e! acting ointl# 8ith an inte!nationall#1!ecogni/e$ ca!ma,e!'!an$
o8ne!:
• %!oen glo'al t!ac, !eco!$: an$
• E=i"ting m<inational o4e!ation".
• Miniu +ua!ifications for Parts Makers
• En$o!"e$ '# the %CM to man&fact&!e 4a!t" of it" en!olle$ Mo$el:
• OEM a&tomotie %a!t" Ma,e! an$o! it" a&tho!i/e$ in1co&nt!# licen"e$ man&fact&!e!
acting ointl# 8ith an inte!nationall#1!ecogni/e$ ca!ma,e!'!an$ o8ne!:
• %!oen t!ac, !eco!$: an$
• A mem'e! of goo$ "tan$ing of the %hili44ine %a!t" Ma,e! A""ociation.
• Miniu +ua!ifications for the Shared Testing Faci!ity Proponent
• Collectiel# en$o!"e$ '# the %CM": an$
• %!oen t!ac, !eco!$.
S#'T"(N 15/ Fisca! Support ) The !egi"te!e$ %a!tici4ant" ma# 'e entitle$ to t8o 5)6
,in$" of fi"cal "&44o!t $&!ing the en!olle$ Mo$el Life- &4 to a ma=im&m of "i= 536 #ea!"-namel#+ 5*6 Fi=e$ Ine"tment S&44o!t 5FIS6: an$ 5)6 %!o$&ction @ol&me Incentie 5%@I6:
%!oi$e$- that the %a!tici4ant" "ati"f# the follo8ing (&alification"+
'riteria to be #!igib!e to F"S
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• Ne8 ine"tment" in the man&fact&!e of %a!t" an$o! e"ta'li"hment of Sha!e$ Te"ting
Facilit#:
• Delie!# of %a!t" to the %CM 8ithin the 4!e"c!i'e$ 4e!io$ a" "ti4&late$ '# the BOI:
• Int!o$&ction of the en!olle$ Mo$el to the ma!,et &"ing the %a!t" man&fact&!e$ &n$e! thi"
CARS %!og!am:
• Con"i"tentl# meeting the c!ite!ia fo! en!ollment of %CM": an$
• Attainment of othe! con$ition" that the BOI ha" im4o"e$ at the time of !egi"t!ation.
• 'riteria to be #!igib!e to P6"
• Man&fact&!e of at lea"t fift# 4e!cent 5
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The total fi"cal "&44o!t fo! the CARS %!og!am 8ill 'e gien 'eginning )2*3- an$ "hall
not e=cee$ T8ent#1Seen Billion %e"o" 5%)> Billion6- 8ith each en!olle$ Mo$el (&alifie$
to a fi"cal "&44o!t in an amo&nt not e=cee$ing Nine Billion %e"o" 5%7 Billion6- to 'e
allocate$ a" follo8"+
• Fo!t# %e!cent 5;26 fo! FIS- 4!oi$e$ that in ca"e" of %a!t" an$ Sha!e$ Te"ting Facilit#-
the FIS "hall not e=cee$ ;2 of the ca4ital e=4en$it&!e fo! tooling an$ e(&i4ment to
man&fact&!e the 4a!t"- incl&$ing t!aining co"t" fo! the initial "ta!t1&4 o4e!ation fo! the &"e
the!eof: an$
• Si=t# 4e!cent 5326 fo! %@I. The DBM "hall li,e8i"e 4!o4o"e that the GAA incl&$e" a
"4ecial 4!oi"ion 4!oi$ing that the &"e an$ $i"'&!"ement of the ADF "hall 'e 4&!"&ant
to thi" E=ec&tie O!$e!.
S#'T"(N 10/ Annua! Appropriations/ The DBM "hall in$icate in the ann&al National
E=4en$it&!e %!og!am the ann&al e"timate$ e=4en$it&!e nece""a!# to "&44o!t the CARS
%!og!am fo! that #ea!- &ntil the amo&nt of T8ent#1Seen Billion %e"o" 5%)> Billion6 i"
f&ll# &tili/e$ an$o! the financial o'ligation" to the 4!og!am %a!tici4ant" a!e f&ll# 4ai$-
"&'ect to DBM 4olic# an$ g&i$eline" on '&$get 4!e4a!ation.
S#'T"(N 17/ Ta8 Payent 'ertificate) The fi"cal "&44o!t fo! the !egi"te!e$ an$ eligi'le
%a!tici4ant" "hall 'e ei$ence$ '# a non1t!an"fe!!a'le Ta= %a#ment Ce!tificate 5T%C61a"
4!oi$e$ '# la8. Thi" "hall 'e &"e$ to $ef!a# the ta= an$ $&t# o'ligation" of the
%a!tici4ant" to the National Goe!nment- "4ecificall#- e=ci"e ta=- income ta=- im4o!t
$&tie"- an$ @al&e A$$e$ Ta= 5@AT6.
To8a!$" thi" en$- the BOI- DBM- an$ DOF "hall $!aft an efficient an$ effectie T%C
mechani"m.
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S#'T"(N 1/ No -oub!e Avai!ent of "ncentives/ Regi"te!e$ %a!tici4ant" "hall not 'e
allo8e$ to !egi"te! thei! actiit# &n$e! an# othe! 4!og!am g!anting incentie".
S#'T"(N 12/ Monitoring and 'op!iance/ The 4!o$&ction ol&me- incl&$ing 4a!t"
im4o!tation ol&me- among othe!"- $elie!a'le" an$ commitment"- "hall 'e "&'ect to
4e!io$ic a&$it. F&!the!- 4a!t" ma,e!" an$o! "e!ice 4!oi$e!" "hall 'e a&$ite$ to 4!eent
4a!t" t!a$ing. Regi"te!e$ %a!tici4ant" "hall 'e a&$ite$ an$ "t!ictl# monito!e$.
Fail&!e to meet the follo8ing "hall ca&"e the cancellation of the Ce!tificate of
Regi"t!ation an$o! fo!feit&!e of "&44o!t- an$o! e=4&l"ion f!om the CARS %!og!am+
• Ine"tment in the man&fact&!e of %a!t" an$o! e"ta'li"hment of Sha!e$ Te"ting Facilit#
8ithin t8o 5)6 #ea!" f!om the i""&ance of the Ce!tificate of Regi"t!ation: an$
• Delie!# of %a!t" to the %CM 8ithin the 4!e"c!i'e$ 4e!io$.
• The Boa!$ ma# limit aailment of "&44o!t a" it ma# $eem nece""a!#. F&!the!- fail&!e to
com4l# 8ith an# of the 4!oi"ion" of thi" E=ec&tie O!$e!- it" Im4lementing R&le" an$
Reg&lation"- an$ the te!m" an$ con$ition" of the Ce!tificate of Regi"t!ation "hall 'e
"&'ect to cancellation- "&"4en"ion- fo!feit&!e of "&44o!t- fine" an$ "&ch othe! a44lica'le
4enaltie" a" ma# 'e allo8e$ o! 4!e"c!i'e$ '# e=i"ting an$ a44lica'le la8"- !&le" an$
!eg&lation".
S#'T"(N 19/ "p!eenting $u!es and $egu!ations/ The BOI- in coo!$ination 8ith the
DOF- DBM an$ othe! conce!ne$ goe!nment agencie" "hall 4!om&lgate the !&le" an$
!eg&lation" to im4lement the o'ectie" an$ 4!oi"ion" of thi" E=ec&tie O!$e!.
3
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S#'T"(N 13/ $evie% of #( 129 and #( 433,A/ The Inte!1agenc# Committee
con"tit&te$ &n$e! thi" E=ec&tie O!$e! i" he!e'# f&!the! o!$e!e$ to !eie8 the e=i"ting
Moto! @ehicle Deelo4ment %!og!am an$ othe! !eleant incentie "cheme" in the light of
the im4lementation of the CARS 4!og!am an$ !ecent !egional an$ glo'al economic
$eelo4ment". The !eie8- 8hich "ho&l$ 'e com4lete$ 8ithin "i= 536 month" f!om the
i""&ance of thi" EO- ma#- among othe!"- e=4lo!e the 4o""i'ilit# of 4!oi$ing fo! ne8
ent!ant" inten$ing to eent&all# 4a!tici4ate in the CARS 4!og!am a "et of incentie"
$&!ing a limite$ t!an"ition 4e!io$.
S#'T"(N 14/ $epea!ing '!ause/ All e=ec&tie o!$e!"- !&le" an$ !eg&lation" an$ othe!
i""&ance" o! 4a!t" the!eof- 8hich a!e incon"i"tent 8ith thi" E=ec&tie O!$e!- a!e he!e'#
!eo,e$- amen$e$- o! mo$ifie$ acco!$ingl#.
S#'T"(N 1/ Separabi!ity '!ause/ If an# 4!oi"ion of thi" E=ec&tie O!$e! i" $ecla!e$
inali$ o! &ncon"tit&tional- the othe! 4!oi"ion" not affecte$ the!e'# "hall !emain ali$
an$ "&'"i"ting.
S#'T"(N 05/ Affectivity/ Thi" E=ec&tie O!$e! "hall ta,e effect imme$iatel# &4on it"
4&'lication in a ne8"4a4e! of gene!al ci!c&lation.
Effect of Reg&lation" in In$&"t!#
The effect of the Com4!ehen"ie A&tomotie Re"&!gence St!ateg# o! the CARS
%!og!am i" "ignificant to the econom# of the %hili44ine"- Signe$ '# %!e"i$ent Benigno S.
A(&ino III on the )7th of Ma# )2*
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Ine"tment" i" the coo!$inating agenc# of the CARS %!og!am an$ the# a!e limite$ to
man&fact&!e th!ee mo$el" of fo&!18heele$ moto! ehicle" an$ a minim&m of man&fact&!ing
)22-222 ehicle" 8ith a life"4an of &4 to a ma=im&m of 3 #ea!". The %hili44ine" i" ho4ing to
!e4licate the "&cce"" of Thailan$ in $eelo4ing it" a&to in$&"t!#. The CARS %!og!am i" al"o
e=4ecte$ to c!eate )22-222 $i!ect an$ in$i!ect o'" in the ne=t 3 #ea!".
Reg&lation" an$ !&ling" ma$e '# the goe!nment ma# al"o affect the "&44l# of the
a&tomotie in$&"t!#. It i" mentione$ in To#ota" !e4o!t on !i", facto!" 5)2**6 that the la8" an$
!eg&lation" ma$e '# the goe!nment heail# affect the in$&"t!#. In$&"t!ie" a!e !e(&i!e$ to fin$ a
8a# follo8 the ehicle "afet#- minim&m emi""ion leel"- an$ noi"e leel" "et '# the goe!nment
8hile "till 'eing a'le to ,ee4 the 4!ice $o8n fo! the con"&me!". Othe! !eg&lation" that affect the
in$&"t!# a!e la8" that affect !a8 mate!ial" "&ch a" mining 'an. M. Rame"h 5)2**6 mention" in
an a!ticle that the a&tomotie in$&"t!# fea!" "ho!tage of !a8 mate!ial" $&e to goe!nment in
a!nata,a i""&ing a mining 'an. The a!ticle mention" that th!ee $iffe!ent man&fact&!e!" &"e
mate!ial f!om that mine in o!$e! to 4!o$&ce c#lin$e! 'loc," an$ hea$" that ma,e &4 a&tomo'ile
engine".
Co!!e"4on$ing Goe!nment Agencie" Affecting the In$&"t!#
Cham'e! of A&tomotie Man&fact&!e!" of the %hili44ine" Inc. 5CAM%I6
• CAM%I actiel# 4a!tici4ate" in the 4!o$&ction of goe!nment 4olicie"- !eg&lation" an$
"tan$a!$" fo! the a&tomotie in$&"t!#.
De4a!tment of Finance 5DOF6
• The DOF a!e cont!i'&ting to the e=4an"ion of the a&tomotie in$&"t!# to8a!$" the
man&fact&!ing "ecto!- DOF a!e !e"4on"i'le fo! f&n$ing )> 'illion 4e"o" 8o!th of ta=
incentie" fo! the mao! 4la#e!" in the %hili44ine" oe! the ne=t 3 #ea!".
Lan$ T!an"4o!tation Office 5LTO6
• In"4ection an$ Regi"t!ation of Moto! @ehicle"
• I""&ance of Licen"e" an$ %e!mit"
• Enfo!cement of Lan$ T!an"4o!tation
• R&le" an$ Reg&lation"
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• A$&$ication of t!affic cea"e"
B. )2*< ASEAN Integ!ation
Effect of ASEAN Integ!ation on the In$&"t!#
The %hili44ine" ha" !ecoe!e$ it" econom# $&e to the ASEAN Integ!ation a" it
"t!engthene$ the att!actiene"" to ine"to!" inte!nationall#. Tho&gh the %hili44ine" "a8 a
$ecline in the mi$$le of )2*2 an$ )2**- it ha" !ecoe!e$ an$ !egi"te!e$ it" fa"te"t g!o8th in the
fi!"t (&a!te! of )2* 8ith >..
The n&m'e!" loo," g!eat "ince it" "tea$# g!o8th '&t the %hili44ine" i" fa! f!om 'eing at4a! 8ith it" neigh'o!ing co&nt!ie"- the late"t ASEAN a&tomotie fe$e!ation $ata "ho8e$ that the
%hili44ine" ha" a""em'le$ **-
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$ecent mi$1te!m 4!o"4ect". Togethe! 8ith the a$ent of the AEC- thi" ma# 4o"ition the *2
ASEAN co&nt!ie" a" att!actie alte!natie location" fo! fo!eign $i!ect ine"tment.
The $iag!am 'elo8 8ill e=4lain ho8 the ASEAN mem'e!" 8o!, togethe! a" one an$ 4!oi$e
each co&nt!# 8ith "4ecific 8o!," an$ ine"tment" nee$e$.
Chapter &: Industry performance
A. In$&"t!# Att!actiene""
S&mma!# of Fie Fo!ce"
Thi" "t&$# 4!ima!il# aim" to hel4 the e=i"ting 4la#e!" in the a&tomo'ile !etail in$&"t!# to
anal#/e the com4etition in the in$&"t!#. A "t!&ct&!al anal#"i" of the a&tomo'ile !etail in$&"t!# 8ill
"e!e a" g&i$ance in fo!m&lating com4etitie "t!ategie" fo! the c&!!ent 4la#e!". In o!$e! to
$ete!mine the nat&!e of the com4etition in the in$&"t!#- it i" im4o!tant to gathe! an$ e=amine
$ata a'o&t the in$&"t!# i" nece""a!# a" 8ell a" 'e a'le to i$entif# the im4act of the moie
4!o$&ction in$&"t!# to the %hili44ine econom# th!o&gh tho!o&gh anal#"i". The nat&!e of the
com4etition in the in$&"t!# m&"t 'e anal#/e$ th!o&gh the eal&ation of the fie fo!ce".
Th!eat" of Ne8 Ent!ant"
In$&"t!# Att!actiene""Determinants Attracti(e Moderate "nattracti(eCa4ital
Re(&i!ement High HighEconomie" of
"cale
Lo8 High
S8itching co"t High HighCo"t
Di"a$antage"
High High
Acce"" to
$i"t!i'&tion
Lo8 High
;2
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channel"B!an$ Lo#alt# High High
Ne8 ent!ant" to an in$&"t!# '!ing ne8 ca4acit# that i" the $e"i!e to gain ma!,et "ha!e".
The ca4ital !e(&i!ement in thi" in$&"t!# i" !elatiel# high "ince it nee$" a la!ge financial
!e(&i!ement to 'e a'le to f!anchi"e 8ith inte!national" a&tomo'ile man&fact&!e!". Mo!eoe!- the
one 8ho i" ente!ing the '&"ine"" m&"t ine"t in a al!ea$# e"ta'li"he$ '!an$ ca! a&tomo'ile
com4anie" to g&a!antee$ income an$ not lo"" fo! the fi!"t t!#. The econom# of "cale of ent!#
'a!!ie!" he!e ha" a e!tical integ!ation- 8hen the!e i" a o4e!ation in "&cce""ie "tage. He!e the
ne8 ent!ant e=4ect" co"t $i"a$antage" "ince "ome of the con"&me!" ' thei! ca!" $i!ectl# to
the in1ho&"e &nit". The "8itching co"t i" mo$e!atel# high "ince it nee$" to f&n$ la!ge amo&nt of
e(&i4ment- 4!o$&ct !e$e"ign o! ne8 !e"o&!ce. On the co"t $i"a$antage in$e4en$ent of "cale-
it i" 4!o'a'l# high 'eca&"e if the ne8 ent!ant" a!e 4e!taining a ne8 a&tomo'ile '!an$- he 8ill
face co"t $i"a$antage" "ince the!e a!e a lot of e"ta'li"he$ a&tomo'ile '!an$" in the ma!,et
8ith high '!an$ lo#alt# f!om the "&44o!t" of the ca! '!an$. An$ la"tl#- the acce"" to $i"t!i'&tion
channel i" lo8 "ince the mao! logical $i"t!i'&tion channel" a!e "e!ing the al!ea$# e"ta'li"he$
ca! '!an$".
Ba!gaining %o8e! of Be!"
In$&"t!# Att!actiene""Determinants Attracti(e Moderate "nattracti(e%&!cha"e @ol&me Lo8 Lo8Diffe!entiation Lo8 Lo8S8itching co"t High HighMa!,et
no8le$ge
Lo8 Lo8
Th!eat of
Bac,8a!$
Integ!ation
Lo8 Lo8
B!an$ Lo#alt# High Lo8
Be!" com4ete 8ith the in$&"t!# '# fo!cing $o8n 4!ice"- 'a!gaining fo! a highe! (&alit#
o! mo!e "e!ice"- an$ 4la#ing com4etito!" again"t each othe!. The 4&!cha"e ol&me in thi"in$&"t!# i" !elatiel# lo8 "ince the amo&nt of mone# to ' an a&tomo'ile nee$" a lot of mone#.
Al"o- a&tomo'ile ha" almo"t lo8 $iffe!entiation "ince all of the f&nction" of the ca! a!e almo"t
fo&n$ in man# a&tomo'ile ca! '!an$". The "8itching co"t face '# the 'e! i" high "ince fo!
e=am4le- an I"&/& '!an$ ca! o8ne! 8ant" to ' a To#ota: he nee$" to a$$ &4 mone# to 'e
a'le to ac(&i!e the 4!ice of the To#ota. Mo"t of the time- 8hen a con"&me! i" choo"ing a ca!
;*
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'!an$" he &"t ,no8 the to4 of min$ cha!acte!i"tic" of it an$ not a me!e $ee4 info!mation a'o&t
it. In effect- the ma!,et ,no8le$ge 'ecome" lo8. The th!eat of 'ac,8a!$ integ!ation i" lo8 "ince
the $eman$ of 4a!t" an$ e(&i4ment to ma,e an a&tomo'ile i" lo8 an$ 8ill ma,e ha!$e! fo! them
to ma,e an o8n man&fact&!e$ ca!. La"tl#- the '!an$ lo#alt# i" high "ince mo"t of the e"ta'li"he$
ca! '!an$" get" the mao!it# of ma!,et "ha!e nit &"t locall# '&t al"o '# the infl&ence of
inte!national !elation.
Ba!gaining %o8e! of S&44lie!"
In$&"t!# Att!actiene""Determinants Attracti(e Moderate "nattracti(e of "&44lie!" Lo8 HighS&'"tit&te" of
in4&t"
High High
S8itching co"t High HighTh!eat of fo!8a!$
Integ!ation
Lo8 High
S&44lie!" can a44l# 'a!gaining 4o8e! in an in$&"t!# '# !ai"ing 4!ice" o! !e$&cing the
(&alit# of 4&!cha"e. S&44lie!" in thi" !etail in$&"t!# a!e fo&n$ mo"tl# a'!oa$ an$ almo"t
ca4t&!e$ '# the e"ta'li"he$ a&tomo'ile '!an$" al!ea$#. Since the "&44lie! ,no8"- that the# 8ill
hae a long1te!m '&"ine"" 8ith the !etaile!- the# 8ill 4!o'a'l# "ta#e$ to a one o! t8o !etaile! to
"&44l# to. In4&t" can 'e fo&n$ in man# a&tomo'ile" e(&i4ment an$ 4a!t" of "&44lie!"- if the
"&44lie! of the !etaile! face$ man# o4tion"- it 8ill hae a high "&'"tit&te of in4&t" in 8hich the#
can $eman$ the 4!ice of each e(&i4ment an$ 4a!t". It i" al"o connecte$ 8ith the "8itching co"t
8he!ein the "&44lie! 5man&fact&!e!6 face$ man# o4tion" in choo"ing 8he!e to get "ome
machine!# an$ 4a!t" in '&il$ing a ca!. La"tl#- the th!eat of fo!8a!$ integ!ation i" lo8 'eca&"e it i"
"&'ecte$ 8ith the 4olicie" ma$e '# fi!m" cont!ol.
Inten"it# of Rial!# Among E=i"ting Com4etito!"
In$&"t!# Att!actiene""Determinants Attracti(e Moderate "nattracti(e Of 4la#e!" High HighG!o8th of
In$&"t!#
High High
Fi=e$ co"t High HighB!an$ Lo#alt# High HighIn$&"t!# life
c#cle
Lo8 High
;)
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S8itching Co"t Lo8 High
Rial!# among e=i"ting com4etito!" occ&!" 8hen com4etito!" feel the 4!e""&!e o! "ee
the o44o!t&nit# to im4!oe 4o"ition. It i" "ometime" in the fo!m of 4!ice com4etition 8he!ein
!ial" ea"il# match 4!ice c&t". The n&m'e! of 4la#e!" i" one of the th!eat" 'et8een com4etito!""ince the# a!e fighting fo! the ma!,et "ha!e on the "ame g!o&n$. Al"o- it c!eate" in"ta'ilit# "ince
the a&tomo'ile '!an$ lea$e!" can ea"il# 4enet!ate$ the !emaining ma!,et "ha!e 'eca&"e of it"
g!o8ing innoation ee!# #ea!. The!e i" a high in$&"t!# g!o8th in thi" in$&"t!# "ince the $eman$
of the a&tomo'ile i" high. Th&"- the# can ea"il# get the $eman$ of 4eo4le th!o&gh the hel4 of
financial" loan" an$ all. In te!m" of fi=e$ co"t- the!e i" a high fi=e$ co"t o! "to!age co"t in the
In$&"t!# "ince it 8ill co"t them a lan$ an$ '&il$ing to !ent fo! it. The '!an$ lo#alt# i" high $&e to
the e"ta'li"he$ name that "#m'oli/e$ (&alit# to the con"&me!". The in$&"t!# life c#cle he!e i"
lo8 "ince the 4!ice" of the ca!" a!e !elatiel# high- it 8ill 'ecome ha!$ fo! them to "ell all thei! 4!o$&ct" at a la!ge "cale. F!om then- the 4!ice of "8itching co"t i" lo8 "ince the 4!ice of ca! ha"
al8a#" a matche$ to the othe! ca! '!an$".
Anal#"i" of Financial %e!fo!mance of e# %la#e!"
G!o"" %!ofit Ma!gin+
To#ota )2*) )2* )2*;G!o"" %!ofit 2-)23-;; *-
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G!o"" %!ofit Ma!gin .*< 2.*< *.;)
I"&/& )2*) )2* )2*;G!o"" %!ofit -22-;2-3-
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A$e!ti"ing 4e!ha4" i" one of the im4o!tant facto!" in o!$e! A a&tomotie !etail com4an#
to 'e "&cce""f&l. 9ith thi" the"e the 4&'lic 8ill ,no8 8hat the com4an# ha" to offe!. In the
%hili44ine" the#!e ce!tain eent" 8he!e in ca! com4anie" "ho8 off the 4!o$&ct" that the# can
offe! to thei! con"&me!". The"e eent" "ometime" a!e hel$ in the 9o!l$ T!a$e cente! in the
%hili44ine". Sometime" Ca! com4anie" hae "tall" in mall" 8he!e "ome of thei! ehicle" a!e
$i"4la#e$ fo! the i"ito!" of the mall" to "ee. Secon$ i" 4!omotion- %!omotion i" nee$e$ to
em4lo# '# the A&tomotie !etail com4anie" in o!$e! fo! them to att!act mo!e c&"tome!" a"i$e
f!om the 4!o$&ct it"elf 4!omo" hel4 con"&me!" to "et in thei! min$"et that '# aailing it can 'e
mo!e of an a$antage to them.
Loo, at 8hat Mit"&'i"hi i" $oing !ight no8 'eca&"e of the cont!oe!"ie" the# face the#
t!ie$ man# o4tion" in o!$e! fo! thei! con"&me! not to igno!e them the# hae "et &4 "tall" in
$iffe!ent mall" fo! thei! '!an$ ne8 Monte!o S4o!t" ca! an$ hae 4!omo" "&ch &" $i"co&nt" in
o!$e! to att!act othe! con"&me!".
La"tl# efficient o4e!ation"- efficient o4e!ation t!an"late" into com4etitie a$antage in the
ma!,et. To#ota" "&cce"" "ho8" the im4o!tance of o4e!ational efficienc#- an$ "ho8ca"e" the
co!4o!ation" a'ilit# to 'e fle=i'le an$ !e"4on"ie to c&"tome! $eman$. It i" clea! that in o!$e! to
achiee g!o8th- a&to com4anie" m&"t !ealign them"ele" to attain o4e!ational efficienc#.
O4e!ation" nee$ to 'e fle=i'le an$ !e"4on"ie to c&"tome! $eman$.
C. e# Ri", A!ea
A" com4etition g!o8"- la&nching ne8 mo$el" at "ho!t amo&nt of time i" of ital
im4o!tance- '&t 4o"e" "ome la!ge challenge" fo! a&toma,e!". Thi" i" connecte$ to the
a&tomotie !etail in$&"t!# 'eca&"e 8itho&t ne8 4!o$&ct" to "ell fa"te!- ho8 can the A&tomotie
Retail In$&"t!# com4anie" ,ee4 &4 in the ma!,et.
Im4!oe$ "&44lie!1man&fact&!e! !elation"hi4" a!e anothe! a"4ect that ma# 8ell $efine
the "&cce"" of the a&tomotie !etail in$&"t!#. Deelo4ing a "&44lie! "t!ateg# fo! im4!oing
!elation" 8ith "&44lie!" 8ill hel4 a&to com4anie" to en"&!e goal com4ati'ilit# an$ a$o4t 'ette!
4!o$&ct im4!oement 4a!amete!" fo! !etaile!" to "ell.
;
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In o!$e! to meet eni!onmental no!m" an$ c&"tome! e=4ectation"- it ha" 'ecome a
nece""it# to in"tall the late"t technological feat&!e" in ne8 a&tomotie 4!o$&ct". The !eal
challenge come" in $eelo4ing a ca! o! ehicle that meet" "afet# an$ eni!onmental "tan$a!$"
8hil"t maintaining e=cellent 4e!fo!mance. Safet# i" 8hat con"&me!" ten$ to loo, at 'efo!e
'ing a ca! in a !etail "ho4.
F&el efficienc# i" al"o e!# im4o!tant an$ ha!$ to han$le 'eca&"e of the incon"i"tenc# of
the f&el 4!ice". The!e a!e ca!" in ce!tain com4anie" that foc&"e" on f&el efficient "o that 8ill not
'e a 4!o'lem '&t not all com4anie" $o. If con"&me!" 8ant a ca! that i" f&el1efficient the# hae to
loo, at "4ecific ca! mo$el" of an A&tomotie Retail Com4an#.
Chapter &I: Industry rospects for the %e*t Three +ears
A. G!o8th %!oection" fo! the Ne=t Th!ee ea!"
;3
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%!e"ente$ in the ta'le 'elo8 a!e the g!o8th 4!oection" of the fo&! mao! 4la#e!"
5To#ota- Mit"&'i"hi- Fo!$- I"&/&6 fo! the #ea!" )2*. The"e fig&!e" 8e!e
e"timate$ th!o&gh the &"e of the 1#ea! moing ae!age fo!m&la 8hich i" ta,ing the "&m of thei!
"ale" !een&e f!om )2**1)2* an$ $ii$ing it '# th!ee to get the 4!oecte$ "ale" fo! )2*; an$ "o
on. Tho&gh thi"- 8e can "ee a""e" ho8 the com4an# i" going to g!o8 in the ma!,et.
To#ota
)2** )2*) )2* )2*; )2*< )2*3 )2*>)3-2;-;;* )2-)7>-;)-;2
2
. fo! Fo!$ 5%alaa- @oltai!e. )2*
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In )2*;- it 8a" !e4o!te$ that To#ota 8a" the n&m'e! one a&tomo'ile com4an# in the
%hili44ine" fo! the la"t thi!teen #ea!"- an$ it ha$ a ;
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Ba!gaining 4o8e! of Be!"
• The 4&!cha"e ol&me in thi" in$&"t!# i" lo8 "ince the!e i" a nee$ of amo&nt of mone# to
' a "ingle ca!.• A&tomo'ile ha" almo"t lo8 $iffe!entiation "ince all of the f&nction" of the ca! a!e almo"t
fo&n$ in man# a&tomo'ile ca! '!an$".• The "8itching co"t face '# the 'e! i" high "ince it nee$" to a$$ &4 mone# to 'e a'le to
"8itch f!om lo8 '!an$ to a high '!an$ o! ine!"e.• Ma!,et ,no8le$ge i" lo8- "ince 8hen a con"&me! i" choo"ing a ca! '!an$" he &"t ,no8
the to4 of min$ cha!acte!i"tic" of it an$ not a me!e $ee4 info!mation a'o&t it.• The th!eat of 'ac,8a!$ integ!ation i" lo8 "ince the $eman$ of 4a!t" an$ e(&i4ment to
ma,e an a&tomo'ile i" lo8 an$ 8ill ma,e ha!$e! fo! them to ma,e an o8n man&fact&!e$
ca!.• The '!an$ lo#alt# i" high "ince mo"t of the e"ta'li"he$ ca! '!an$" get the mao!it# of
ma!,et "ha!e nit &"t locall# '&t al"o '# the infl&ence of inte!national !elation.
Ba!gaining %o8e! of S&44lie!"
• S&44lie!" in thi" !etail in$&"t!# a!e fo&n$ mo"tl# a'!oa$ an$ almo"t ca4t&!e$ '# the
e"ta'li"he$ a&tomo'ile '!an$" al!ea$#.• In4&t" can 'e fo&n$ in man# a&tomo'ile" e(&i4ment an$ 4a!t" of "&44lie!"- if the
"&44lie! of the !etaile! face$ man# o4tion"- it 8ill hae a high "&'"tit&te of in4&t" in 8hich
the# can $eman$ the 4!ice of each e(&i4ment an$ 4a!t".• The "8itching co"t 8he!ein the "&44lie! 5man&fact&!e!6 face$ man# o4tion" in choo"ing
8he!e to get "ome machine!# an$ 4a!t" in '&il$ing a ca!.• The th!eat of fo!8a!$ integ!ation i" lo8 'eca&"e it i" "&'ecte$ 8ith the 4olicie" ma$e '#
fi!m" cont!ol.
Rial!# Among E=i"ting Com4etito!"
• The n&m'e! of 4la#e!" i" one of the th!eat" 'et8een com4etito!" "ince the# a!e fighting
fo! the ma!,et "ha!e on the "ame g!o&n$. Al"o- it c!eate" in"ta'ilit# "ince the a&tomo'ile
'!an$ lea$e!" can ea"il# 4enet!ate$ the !emaining ma!,et "ha!e 'eca&"e of it" g!o8ing
innoation ee!# #ea!.
;7
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• The!e i" a high in$&"t!# g!o8th in thi" in$&"t!# "ince the $eman$ of the a&tomo'ile i"
high. Th&"- the# can ea"il# get the $eman$ of 4eo4le th!o&gh the hel4 of financial" loan"
an$ all.• The fi=e$ co"t- the!e i" a high fi=e$ co"t o! "to!age co"t in the In$&"t!# "ince it 8ill co"t
them a lan$ an$ '&il$ing to !ent fo! it.• The '!an$ lo#alt# i" high $&e to the e"ta'li"he$ name that "#m'oli/e$ (&alit# to the
con"&me!".• The in$&"t!# life c#cle he!e i" lo8 "ince the 4!ice" of the ca!" a!e !elatiel# high- it 8ill
'ecome ha!$ fo! them to "ell all thei! 4!o$&ct" at a la!ge "cale.• The 4!ice of "8itching co"t i" lo8 "ince the 4!ice of ca! ha" al8a#" a matche$ to the
othe! ca! '!an$".
Chapter &II: Conclusion
The a&tomo'ile !etail in$&"t!# i" incl&$e$ in the %SIC co$e &n$e! Section G- 8hich i"
8hole"ale an$ !etail "ale of an# t#4e of goo$". Un$e! "ection G the in$&"t!# 'elong" to $ii"ion
;
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moto!c#cle"- an$ othe! a&tomo'ile" '!an$ ne8 o! "econ$han$ '&t $oe" not incl&$e the !ent an$
man&fact&!ing of the"e ehicle". The in$&"t!# al"o fall" &n$e! the cla"" ;**.;) in
)2** to )-;7. o! *.3 inc!ea"e in "ale". Fo!$" "ale" a!e 4!e$icte$ to g!o8 f!om
>-;)-;22 in )2** to o! ). inc!ea"e.
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Recommen$ation
The !ecommen$ation fo! the a&tomotie !etail in$&"t!# i" to maintain it" $eg!ee of
in$&"t!# att!actiene"" '# ,ee4ing ne8 4la#e!" o&t- haing a la!ge n&m'e! of "&44lie!"- along
8ith the 4o"itie in$&"t!# g!o8th 4!oection a" 8ell a" le""en the $eg!ee of in$&"t!#
com4etitiene"" an$ th!eat of "&'"tit&te". Een tho&gh the!e a!e "&'"tit&te" an$ high
com4etitiene"" among the c&!!ent 4la#e!"- fi!m" "ho&l$ ine"t in !e"ea!ch an$ $eelo4ment of
ne8 technolog# to le""en the th!eat of "&'"tit&te" an$ in$&"t!# com4etition.
One 8a# to le""en in$&"t!# com4etitiene"" i" to c!eate mo!e $iffe!entiation among the
c&!!ent 4la#e!". The c&!!ent 4la#e!" "ho&l$ ma!,et thei! $iffe!entiation an$ &ni(&e "elling
4!o4o"ition" to con"&me!" to c!eate 'ette! '!an$ lo#alt# an$ inc!ea"e com4etitie a$antage.
Foc&"ing- im4!oing on- an$ loo,ing mo!e into the c!itical "&cce"" facto!" can $o thi". A"
mentione$ in cha4te! 3 the c!itical "&cce"" facto!" a!e a$e!ti"ing- 4!omotion- an$ efficient
o4e!ation". The a$e!ti"ing 8ill allo8 the c&!!ent 4la#e!" to "ho8 off ne8 technolog# an$
mo$el" ee!# #ea! a" 8ell a" it" 4!omotion". The a&tomo'ile in$&"t!# "ho&l$ inc!ea"e it"
n&m'e! of ca! "ho8" ee!# #ea! an$ inc!ea"e it" n&m'e! of "tall" the# hae in the %hili44ine" to
!each mo!e c&"tome!".
Fo! the a&tomotie !etail in$&"t!# to !e$&ce the th!eat of "&'"tit&te"- it can al"o loo, to
one of it" c!itical !i", facto!" that i" efficient o4e!ation". C&!!ent fi!m" "ho&l$ !e"ea!ch 'ette!
metho$" an$ technolog# to im4!oe thei! o4e!ation" in o!$e! to !e$&ce 4!ice". Since one of the
a$antage" of the "&'"tit&te" of the a&tomotie !etail in$&"t!# i" lo81co"t "&ch a" 'ic#cle" an$
!ail t!an"4o!tation- haing affo!$a'le ca! mo$el" 8ill hel4 !e$&ce the th!eat of the"e "&'"tit&te".
The in$&"t!# 4la#e!" "ho&l$ al"o loo, fo! f&el alte!natie" to thei! 4!o$&ct". One of the la!ge
com4laint" a'o&t a&tomo'ile" i" the eni!onmental ha/a!$ that come" 8ith the &"e of fo""il
f&el". If the c&!!ent 4la#e!" loo, fo! alte!natie" to fo""il f&el" to 4o8e! thei! ca!" "&ch a"elect!icit# an$ 'iof&el then the com4etitie a$antage in the a!ea of eni!onmental "&"taina'ilit#
i" !e$&ce$. A h#'!i$ ca! "&ch a" the To#ota %!i&" i" al!ea$# a common ehicle in co&nt!ie" li,e
the Unite$ State" ho8ee! it ha" #et to !each the %hili44ine ma!,et. The "ale of ehicle" "&ch
a" the %!i&" 8ill hel4 the %hili44ine a&tomotie !etail in$&"t!# to 4!otect it"elf f!om the th!eat of
"&'"tit&te" '# 'eing mo!e economical an$ eni!onmentall# f!ien$l#.
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REFERENCES
)2*< ASEAN Integ!ation an$ %H a&to in$&"t!# $i"c&""e$ in )2*; A@ID Fo!&m. 5)2*;6. Ret!iee$
Fe'!&a!# *;- )2*3- f!om htt4+888.a&toin$&"t!i#a.coma&to1in$&"t!#1ne8")2*
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< thing" #o& m&"t con"i$e! 'efo!e 'ing that SU@. 5n.$.6. Ret!iee$ Decem'e! *
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Fe!nan$e/- R. 5)2*;6. =or!d’s !argest bicyc!e brand> Trek> fina!!y opens first store in the Phi!ippines/
Ret!iee$ f!om htt4+888."4in.4ha44a!el1an$1ga$get"actie1life"t#let!e,1'i,e"1ga!#1fi"he!1to'#1cla&$io1
'ic#le1"to!e1'gc
Fo!$. 5n.$6. 'opany Tie!ine/ Ret!iee$ f!om htt4"+co!4o!ate.fo!$.comcom4an#hi"to!#.html
Fo!$. 5n.$6 Mebers of the board/ Ret!iee$ f!om
htt4"+me$ia.fo!$.comcontentfo!$me$iafna&"en4eo4le.mem'e!"1of1the1'oa!$.html
Fo!$ %hili44ine". 5)2*6. Ford Motor 'opany Appoints ?ay Hart as Managing -irector> Ford Phi!ippines/
Ret!iee$ f!om htt4+888.fo!$.com.4ha'o&tne8"!oomWa!ticle*);72)*;
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I"&/& Moto!" 5)2*;6 F)2*; Financial Re"<" Ret!iee$ Jan&a!# *- )2*3 f!om
htt4+888.i"&/&.co.48o!l$ine"to!financial4$f,e""an)32e.4$f
Jamie"on 5)2*;6 Fili4ino mi$$le cla"" to g!o8 a&to in$&"t!# in t8o #ea!" P Niel"en "&!e# 1 See mo!e at+
htt4+888.gmanet8o!,.comne8""to!#
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N.A. 5)2*2>)3
%alaa- @ 5)2*
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Ro$!ig&e/- F. 5)2*;6. *i!! prootes the use of bicyc!es aong Fi!ipinos/ Ret!iee$ f!om
htt4+888.!a44le!.commoe14hi""&e"eni!onment