Industry Analysis: Automotive Retailing and Trade in the Philippines

Topics: Automobile, Retailing, Revenue Pages: 12 (4162 words) Published: March 7, 2013
Industry Analysis: Automotive Retailing and Trade in the Philippines ______________________________________________________________________________ I. INTRODUCTION
Several years ago, the Philippine automotive industry was quite small in terms of share in value added in manufactuing, the number of players and its production if compared to countries like Thailand, Malaysia and Indonesia. But this did not end there, from then on the automotive industry started to continuing growing as it promoted expansion and developed its competitiveness.

There are two sectors under the automotive industry, which is the manufacturing sector and the retail, service and repair sector. In this study were about to present, our main focus will be on retailing as a whole. The selling of goods or services for personal or non-business use, even if it’s a manufacturing, wholesale or retail, and it will not be significant whether how they sell and where they are located, all these will be all part of retailing.

This study aims on analyzing the automotive retailing industry based on: First, the number of sales they make, how many cars are registered in the Philippines and CBU imports. Second, the comparison of the top 8 automotive branches based on its market strategies and competiveness. Lastly, we present the analysis of these branches with the financial statements we have gathered.

A. Industry Definition
Retailing includes all activities involved in selling goods or services directly to final consumers for personal use. Any organization selling to final consumers is doing retailing. The wholesale and retail trade of automotive industry involves businesses engaged in wholesaling and retailing of automotive vehicles, generally without transformation and rendering services incidental to the sale of vehicles. They are organized to sell or arrange the purchase or sale of (1) completely assembled vehicles for resale, (2) spare parts and (3) car accessories. Furthermore, they cater and sell their products mostly to private consumers, businesses and to government for public use and normally operate from a warehouse or office.

B. Products and Services
In this industry, they sell completely built units or completely knocked down vehicles, from compact cars to heavy commercial vehicles, to provide and to satisfy the needs of the consumers. Aside from vehicles, they also have accessories and spare parts for the cars they put up for sale. For services, they offer financial assistance particularly car loans through banking to make buying cars easier and more affordable for the consumers. Also, they work with insurance companies to provide insurance to the buyers for the safety of their vehicles. Moreover, all dealerships in the country have after-sale services to strengthen their relationships with their customers. They typically offer 3-year warranty, which includes repair and replacement of parts. In addition, they offer maintenance check-ups to maintain the safety and performance of the vehicles. III. BASIC DEMAND AND SUPPLY CONDITIONS

A. Demand Conditions
1. Demand Determinants
The Demand Determinants for the automotive retailing industry in the Philippines are: * Strength of Business Demand for Vehicles
Vehicles are not only for private use, they could also be used for Pub Utility, like Buses, taxis, etc., and for Business, delivery trucks, cargo transporting, catering trucks, etc. The demand for certain vehicles varies from the nature of business and it becomes a determinant for Cars in the Philippines. * Consumer Income relative to Vehicles Prices

The consumer’s income becomes a big determinant of demand for cars because the prices of cars vary and consumers look for a vehicle that is worth the money they are paying for it. The higher the real income of a single individual, the higher the demand for cars...

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Total registered vehicles (2009-2010)
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