Manila Auto Show 2013 Part 2: Has the time come for Chinese manufacturers?

Can’t be clearer…

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This is Part 2 of 3 special reports on the Manila International Auto Show 2013. You can check Part 1 – an overview of the Filipino car market and its perspectives for the near future here. Next, let’s focus on the most striking aspect of the Auto Show to me: the space allocated to Chinese manufacturers and their dynamism in the place. Even though Chery first launched in the country in 2007, I have seen absolutely no Chinese cars in the streets of Manila during the 4 days I stayed there. So far, not so good for the Chinese in the Philippines, which makes their dominance at the Show even more interesting.

Good old me with Leon Herrera, CEO of Chery Motors Philippines

I had the privilege to interview Leon Herrera, CEO of Chery Motors Philippines, the brand’s new distributor in the country. For him, “the time has come” for Chery and Chinese manufacturers in the Philippines. Mr Herrera started his career turning the VW Beetle into a roaring success locally in the 70s and 80s, before launching both Hyundai and Kia here. Like in most export markets Chery has entered so far (with the exception of Europe with the Qoros brand), it competes on price. Mr Herrera says “similarly to the Korean when they first appeared locally, we are the cheapest in each category we compete in, but most importantly the technology is now on par”.

The Hummer is alive and kicking – as a DongFeng…

Chery resets its presence in the Philippines by launching no less than 4 all-new models this month: the X1 Mini SUV, E5 compact sedan, Fulwin 2 hatchback and QQ3 minicar, all very recent technologies. Mr Herrera sees the most sales potential for the all-new QQ3. At P419,000 or US$10,070 the QQ3 is the cheapest new car on sale in the Philippines (bar the classic QQ3 at P399,000) and “perfect as a first car, for young families, women or students”, says Mr Herrera. With car ownership set to increase sharply over the next few years (see my first report), Mr Herrera does have a point: I saw countless amounts of Hyundai Eon in the streets of Manila during my stay, and the QQ3 is sized similarly.

The Chery Q22 11-seater generated lots of interest from the local press

But it’s the Q22 11-seater LCV that generated by far the most interest from the local press at the Show. Selling for P565,000 or US$13,700 it has no competition price-wise for this size. Remember the smaller Toyota Avanza and Mitsubishi Adventure both ranked within the Top 5 models last year locally, so the potential is there. Mr Herrera confirms: “in the Philippines there is a tradition of extended families living together. When you get married you stay at your parents’ place and when you move out your sister moves in with you and so on. So this is perfect for this type of structure, and also of course for commercial use as a taxicab.”

Foton comes in the Philippines all guns blazing

Numbers now. Chery is “aiming at a spot in the Top 5 this year and between 10 and 15% of the market” by 2015, which would place Chery at #3 below only Toyota and Mitsubishi and on par with Hyundai… A very bold target indeed. Mr Guibing Zhang, vice-president of Chery International who I also had the privilege to interview, was a little more cautious. For him, “the priority is to establish a solid foundation in the country and earn the trust of the Filipino consumer as a reliable brand. It’s a step-by-step process”.

Good old me with Raymond Tumao, CEO of DongFeng Philippines

I came back a couple days later to check out the public reaction at the Show and the Chery stand was literally flooded by (future?) consumers intrigued by this whole new range of very cheap cars. But Chery was only one of 10 Chinese manufacturers present at the Show. Foton had an impressive display of manliness with leather-clad male and female models posing next to 3 souped-up Thunder pick-ups, making all the other exhibitors at the Show look like teenage girls with ponytails.

See the Full article including Jinbei and JMC studies by clicking on ‘Read more’ below.

JMC logo (bet you didn’t recognise that one!)