Tuesday, May 27, 2008

Ford Plans To Take Back Philippines Market Share

US carmaker Ford has outlined plans aimed at making up lost ground in the Philippines, where the company has recently been overtaken in volume sales terms by South Korea's Hyundai. The plan focuses on two main areas - raising Asia exports by adding new markets and boosting domestic sales with the launch of new models. According to Ford Philippines president Richard Baker, exports should rise by 40% in value terms to US$75mn, based on improved regional economic conditions and the addition of Singapore and Brunei as export destinations. Ford Philippines currently exports its locally-produced Ford Focus and Escape and their sister models, the Mazda 3 and Tribute, to Indonesia, Thailand, Malaysia and Vietnam.

On the domestic front, Baker commented that the company is aiming to raise sales by around 10% in 2008, which would mean selling around 8,000 more vehicles than last year. In particular, Ford will look to its best-selling model, the Everest SUV, which has already achieved growth of 50% year-on-year (y-o-y) in Q108. Another factor will be the choice of powertrain for new models. Baker added that Hyundai's success is partly due to its range of diesel models, which have proven popular at a time of high fuel prices.

In its attempt to boost its domestic sales and fight back against Hyundai, which has taken Ford's fourth place in the market, the US manufacturer plans to roll out its own range of diesel models. Two new models are slated for launch later in the year and will be new versions of existing models.

Engines already play an important part in Ford's strategy for the Philippines and as such, the company invested PHP1.1bn in a flex-fuel engine facility, which opened in 2007. Over the next five years, the facility will produce around 100,000 engines, capable of running on a 90:10 gasoline to ethanol combination. The engines will initially be fitted into the Ford Focus, and later in the Escape SUV and Mazda models, including the Mazda3 and Tribute SUV. Output is also exported to other markets in the ASEAN bloc and South Africa.

The recent performance of the Philippines auto market suggests that the conditions are suited to growth plans for manufacturers. After topping the 100,000 unit mark for the first time in 2007, sales in the first four months of 2008 reached 39,981 units. In April alone, sales were up by 4.3% from March, and up by 28.4% from April 2007, at 11,078 units. This puts the market on track to achieve CAMPI's forecast of 125,000 units in 2008, which is in line with BMI's projection of 127,335 units. However, Ford was not even in the top five for sales in the year to April.

[Source : AutosInsight (Subscription Required)]


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