Quo vadis?

Electric high: Shell officials excitedly pose at the launch of the first Shell Recharge facility in the Philippines in Shell Mamplasan along the South Luzon Expressway. — PHOTO BY KAP MACEDA AGUILA

The virus is still out there, but we need to get out there, too

NOT A FEW people are saying that we’re now in post-pandemic times. That’s an incredibly brazen idea to foist upon the public because, well, it just isn’t true.

Cases have been steadily on the rise recently, and the local rollout of the COVID-19 vaccine leaves much to be desired. Consider that ordinary citizens falling outside the “with co-morbidities” and “senior” categories still can’t get the second booster even if they wanted to. Couple this with waning protection of vaccines after the sixth month — yes, you get the picture.

But the world will continue to turn. And like that famous Jurassic Park nugget goes: “Life finds a way.” Bills have to get paid, dinner needs to be made and served, and we have to meet our KRAs amid hybrid work setups and whatever our bosses ask of us.

And basically, we’ve been craving for non-Zoom contact as well. The kids miss being with their friends, our four walls are getting mighty cramped and, for us in the automotive media, the online unveilings are fast losing their novelty. We’d prefer staring at paintwork rather than pixels, thank you very much.

So we go out to cover car launches and activities. We talk to executives again. Sometimes, we get tested for the virus beforehand; sometimes not. On a couple of occasions, we’ve been horrified to learn of participants reporting they felt feverish — subsequently testing positive for the virus. So we test ourselves again, crossing our fingers that there’s just one line on the test strip. This is the life we’ve started to embrace and, for the most part, I believe it’s still a roll of the dice.

But what can we do?

As we man the automotive beat, verily, we’re also among its biggest fans. Many people rely on this industry to make ends meet and to build their dreams, and mobility itself is something we need more of to realize heightened progress. This will get us from here to there much more quickly — and there are so many dimensions to that statement.

Looking back at the darkest of the pandemic’s days, there’s much to be grateful for. The showrooms aren’t shuttered anymore, people are going out, and, yes, more of us are buying vehicles again. Still, we’re in no way out of woods just yet.

And while we are hoping for even better numbers this year in terms of automotive sales, there have been many flies in the ointment: Russia’s invasion of Ukraine, skyrocketing fuel prices, and the continued shortage of parts such as semiconductors. Demand outpacing supply is a good problem to have, but it’s a problem nonetheless.

I asked Willy Tee Ten, the president of the Autohub Group, which counts more than 20 automotive brands under its aegis, about his projections for the remainder of 2022. “The best-case scenario is 20% growth, while the worst would be no growth at all,” he replied succinctly. The executive, who also heads Philippine Automotive Dealers Association (an aggrupation representing more than 100 dealerships), insisted that aside from the aforementioned challenges, the situation is exacerbated by a shortage of vehicles, and spiking interest rates.

So, what must happen to get the sector back firmly in the black?

“So many things,” he rued. “Interest rates need to improve. Then we must get more inventory — although not too many. We also need banks to be more aggressive in handing out car loans.”

The executive also predicted that the auto sector will recover in tandem with the country’s economy in general. “COVID has to finally go away as well,” he added. “The government also needs to turn things around.”

Nonetheless, there’s good news if you look for it. According to the latest joint report of the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA), member-companies sold a total of 28,601 units in June. This represents a 26.8% uptick versus the same month last year, when 22,550 vehicles were sold.

In an accompanying release, CAMPI President Atty. Rommel Gutierrez said, “The automotive industry recovery is progressing as new motor vehicles sales reached an upward growth trajectory in June driven by the pent-up demand from consumers amid the less-than-ideal economic conditions recorded in the same period.”

As for Filipinos’ readiness for the seeming darling-of-the-moment electric vehicle, Autospeedygo Group Vice-Chairman and COO Vincent Licup expressed in an exclusive interview with this writer: “Essentially, we Filipinos are ready, and we need (EVs).” He added, “There was never an era when inflation stopped. Name all the presidents we had; all of them battled with and lost to inflation.”

The lack of charging infrastructure isn’t a dealbreaker either, said Mr. Licup. “It doesn’t matter if there are only a few charging stations, because when you charge the cars overnight in the comfort of your homes, you can still travel as far 170, maybe 240 kilometers. That’s more than twice the average of our daily travel. And when we have more EVs on the roads, more charging stations will follow.”

But hang on to your horses. There’s a reality check as well. “The real question is, are we ready financially? The sad answer is no,” he maintained. The ideal formula, basing from countries ahead in the journey to electrified mobility, is that incentives must be given to both dealers and buyers. “On the contrary,” lamented Mr. Licup, “Here in our beloved nation, it’s the other way around. On top of the usual taxes embedded in a vehicle, an EV is being taxed by 30% more! Our government should balance the economy toward a green future. People need to do their math: 30% of zero sales is zero. If government gives incentives like in other nations, collections via vehicle taxes will be exponential.”

What’s giving us hope that the dream of pre-pandemic performance might come sooner than later are the recent sales numbers from CAMPI-TMA. Overall year-to-date of vehicle sales is at 154,874 units as of June. “The industry is optimistic of sustaining motor vehicle sales in its current pre-pandemic trendline in the coming months, albeit challenging amid the ongoing headwinds to the economic recovery, which continue to affect consumer confidence and overall employment,” Atty. Gutierrez declared. This is a modest 16.7% growth versus the first half of last year, but for people yearning for something — anything — positive, this is plenty good news to tide us over.