Iconic VW Beetle returns to test PHL waters... Maybe this time for good

The folks behind German brand Volkswagen think the time is ripe to make a comeback to the Philippines, and probably for good this time around.
 
Literally "The People's Car," Volkswagen is bringing back the iconic Beetle, along with other models like the Touareg, Polo, Tiguan, Touran, Golf, CC and Phaeton back to the islands. At this point though, no Filipino is yet singing: Oh, bring back… bring back… bring back my Beetle to me…
 
“The ASEAN market, including the merging market in the Philippines is the next frontier for Volkswagen in the Asia Pacific Region," Weiming Soh, Volkswagen AG executive vice president and president for commercial Operations of Greater China and ASEAN, said during a launch of the brand in Makati City on Friday.
 
“We are very excited to reconnect with the Filipino market, knowing how well loved Volkswagen is in the Philippines. ‘Volks,’ being a status icon here, as it is around the world, is like no other car before or after,” Soh added.
 
Volkswagen left the Philippines in the past. Its care were distributed by the Guevara family in the late 1960s and 1970s. The Auto Prominence Corporation then succeeded the distributorship until early 2000.
 
On September 11, Reuters reported that Volkswagen is moving forward with plans to set up production in fast-growing Southeast Asian markets as the German carmaker expands its overseas footprint to boost its global ambitions.
 
The carmaker, which still lacks a vehicle-assembly plant in the Association of Southeast Asian Nations (ASEAN) group of countries, has a goal of overtaking Toyota and General Motors to become the world's largest automaker no later than 2018.
 
ASEAN member countries are Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Myanmar, Cambodia, Laos and Vietnam.
 
Even in China, Volkswagen is ramping up efforts to grab more market share in a region dominated by Japanese rivals as it opened on Sept. 25 a plant-with a 300,000 vehicle capacity a year-in Foshan City in Southern Guangdong province, according to Reuters, Reuters reported.
 
The Foshan plant, a joint venture of Volkswagen and state-owned automotive enterprise FAW Group Corp., is expected to double its capacity to 600,000 vehicles a year with an investment of 15.3 billion yuan ($2.50 billion) after the two companies inked an agreement for expansion.
 
No.1 carmaker by 2018
 
Since 2008, Volkswagen saw a 46 percent growth in the ASEAN market which groups
 
Soh noted the ASEAN car industry has a 4-million untapped market for Volkswagen, and that is why "they have to build a factory somewhere" in the region as part of the vision to become the world’s No. 1 car manufacturer by 2018.
 
"We have to come to ASEAN. It has improved to three-, four-fold in two to three years. We have to be given a chance to be here. We need to give people a chance to choose Volkswagen," he said.
 
"With that, we are looking at expansions in strategic markets such as Malaysia, Indonesia, Thailand, Taiwan and now the Philippines," Soh added.

In October 2012, Ayala Automotive Holdings Corporation, a wholly-owned subsidiary of Ayala Corporation, bagged the distributorship of Volkswagen cars in the Philippines. 

Before Volkswagen decided to come back to the Philippines, the German carmaker first looked at indicators and opportunities in the country, and "just in time," said Soh.
 
"We looked into the market, and just about time. We scanned the market economy. We had to do our homework," he added.
 
He noted there were no specific indicators but they looked at the gross domestic product (GDP), investment opportunities and how the market developed and would develop.
 
The Philippine economy has been growing above 7 percent in last four straight quarters, expanding by 7.5 percent in the second quarter of this year as the fastest in Asia and on a par with China.
 
Soh also noted the significant growth in the Philippine's car industry is also a factor in the company's decision for a comeback.
 
"The Philippine car market grew by nearly 12 percent last year. This year, the industry is targeting to sell over 200,000 cars and over 300,000 cars by 2022," he said.
 
According to the Chamber of Automotive Manufacturers of the Philippines CAMPI, total sales in 2012 rose 11 percent year-on-year to 156,649 units.
 
Meanwhile, sales of imported cars rose 14 percent year-on-year in 2012 to 28,400 units, the Association of Vehicle Importers and Distributors (AVID) reported
 
CAMPI and AVID attributed the double-digit growths to consumer confidence on the back of remarkable expansion in the industry and service sectors, in the buildup of overseas Filipino remittances, and in the strong GDP numbers.
 
"The time is now for Volkswagen to enter the Philippine market, now that Philippine customers are demanding for mobility," Soh said.
 
On the chances of establishing a Volkswagen factory in the Philippines, Soh said: "I think it's too early to tell."
 
The near term prospects will revolve on testing the waters by trying to sell most if not all of the 2,000 cars the company earmarked for its first year in the Philippines.
 
"We are here to start learning who our customers are… The Volkwagen brand is a German engineering company but it has to be a Philippines' Volkswagen," said Soh.
 
"I would not pursue a market share in three years. We are going to do whatever we can sell. Once we get the learning curve, we'll increase the target," he added.
 
6 PHL dealerships
 
Volkswagen thinks this is possible with the long-term partnership with Ayala Automotive.
 
“A strong partner is critical to our success; hence I am personally delighted that we have forged an alliance with the Ayala Group,” Soh said at the launch.
 
Ayala Corp. president and COO Fernando Zobel de Ayala said the company's automotive unit will open six dealerships by 2014, on top of the first store it opened last Saturday in Taguig City.
 
"Our first dealership is in Bonifacio Global City. We are looking at Metro Manila and the Visayas for six dealerships by next year," he said, noting a 15-bay service center will emerge in Greenhills, Mandaluyong City and another store in Cebu by the first semester of 2014.
 
Though dubbed as "The People's Car," Volkswagen prices are not so folksy at a little over P1 million.
 
Diesel variants of various brands are available, such as the P 1.295 million Jetta 2.0-liter turbo, the P1.775 million Touran 2.0-liter turbo, the P2.109 million Tiguan 2.0-liter turbo and the P4.290 million Touareg 3.0-liter V6. The Beetle will be available by 2014, with a price pegged around P1.5 million.
 
Ayala Automotive chairman and president John Phillip Orbeta said they are targeting "consumers that would aspire for a German car.
 
"Most German cars here are on the high-end side. Volkswagen will offer an aspirational point... at affordable prices for a German car,” he said.
 
"The market is growing. And as the market grows, we need to offer more choices. So here's just another choice," he added.
 
The Volkswagen Group is the largest European automotive manufacturer, featuring 12 brands that include Volkswagen Passenger Cars, Audi, SEAT, ŠKODA, Bentley, Bugatti, Lamborghini, Porsche, Ducati, Volkswagen Commercial Vehicles, Scania and MAN.
 
The group operates in 104 production plants around the world, with more than 550,000 employees producing more than 37,700 vehicles per working day.
 
A number of foreign carmakers have set their sights on the Philippines.  Last June, luxury brand Rolls-Royce entered the Philippines and, in 2012, Ferrari and Maserati opened showrooms in Metro Manila. - VS, GMA News