Since I posted photos of the PhUV, several people have left comments on the vehicle. Quite a number have posed some questions. I hope the following literature will address most of the questions asked.

On that note, I might as well put in my two cents worth. The PhUV, you see, is a prototype - I’ve described at as a proof of concept. It proves that we can produce a vehicle locally, and proves that we can produce it for under half a million pesos.

Yes, some of the parts looked cheap. No, the vehicle was not completely or cleanly finished. Yes, it could have benefited from quite a deal of detailing. Keep in mind thought that the vehicle presented was, like I mentioned, a prototype. It was proof that we can do this.

As the vehicle moves closer to mass production, more improvements will start coming. We can start mass-producing curved panels, fine-tune the design, and clean up those little flaws that everybody picks on.

Having said all that, I’ll shut up and leave you to read the literature on the PhUV.

1. The PhUV Program is not a corporate single-product project. Meaning, any car assembler who wants to participate can have his own version, in much the same way that in the defunct People’s Car, Kia had the Pride, Daihatsu the Charade, Fiat the Uno, Suzuki the Fronte and Honda the entry-level Civic Hatchback.
2. We have not called our project “people’s car” but instead we called it the PhUV because we realized that an AUV, not a car, may be the best vehicle to cater to the needs of the target market.
3. We realize that calling it a “people’s car” is wrong because the PhUV will definitely not be affordable for ordinary Filipino household if they do not have any business to pay for it.
4. The PhUV target market is not the ordinary Filipino household, particularly the masses. It is the entrepreneur and OFWs who can afford an imported used vehicle.
5. The PhUV, first and foremost, is a Filipino vehicle, assembled in the Philippines with a high level of value-added local parts and labor and meant for business and family use.
6. 6. We have conceived of the PhUV as an inspiration, a rallying point for local auto parts manufacturers not to lose heart in the face of what seems to be insurmountable difficulties ahead.

Why the need for the PhUV:
Through the years, we have witnessed the steady decline of local auto parts manufacturers and currently, most of what is left of our membership are operating at only 40% of their rated plant capacities. There are about 45,000 workers dependent on the local parts industry and its support industries and thus, MVPMAP saw the need to look for a vehicle that will hopefully revive the industry, a move similar to what our Asean neighbors have done - look for a niche and serve it!! We are expecting the Philippine Utility Vehicle (PhUV) Program to do this as we believe it can be the much-needed catalyst to revive our ailing local auto parts industry.

Government support needed:
Having said this, we are one with Senate President Manny Villar when he said “let’s encourage the automotive companies to develop cars that will use more locally made parts than their imported models”. That exactly is what we have been telling (no, begging) the car assemblers for the last few years but to no avail. This is where we feel the government could be of help by providing the necessary incentives to the car assemblers, parts makers and even buyers in the PhUV Program. We really need government’s help on this respect and we would greatly appreciate its support, now that we stand on common ground.

The PhUV’s target market:
However, we think that the 45,000 workers dependent on the local parts manufacturing industry could no longer wait for the economy “to grow by 8% in terms of GDP…… before we can consider producing a people’s car”. The PhUV, which is not even envisioned to be a “people’s car”, is currently the local auto parts manufacturers’ last hope for survival.

We feel that we do not necessarily have to target the ordinary Filipino households, particularly the masses who earn P10,000 a month. The target market are the entrepreneurs and OFWs who have businesses that can afford for them a used imported vehicle from Subic. They have the capacity to pay yet can afford only one vehicle - a vehicle they can use for business on weekdays and for family on weekends.

The PhUV’s sales target:
The sales target we have set for the PhUV is modest - just 30,000 units, about half of the vacuum to be left by the recent Supreme Court decision completely banning used car importation, especially those via Subic or the so-called SUVic, which honestly speaking, may have been imported and subsequently sold under questionable circumstances.

The PhUV’s modest sales target of 30,000 units a year almost matches the sales of our top car manufacturer Toyota Motors Phils. which sold 34,188 units as of November 2006 year-to-date. Even if the PhUV achieves only half of its target, this is still comparable to the sales of second placer Honda Cars Phils. which is 12,564 units for the same period.

The PhUV’s target price:
Even our PhUV target price of about P350,000 is within the price range for that market. The market is there, they have the capacity to pay and if successful, the PhUV could even help the local auto industry break its 100,000-unit annual sales target, an indication that the local auto industry is starting to grow. Having found the niche, all we need to do is serve it.

Malaysia’s Proton:
Despite its recent business setbacks, we think Malaysia’s National Car Program was a success as it paved the way for Malaysia to break into the world automotive market. With Proton and Perodua as its national cars, it was producing about 546,000 units annually. But more importantly, in the process, it developed a competitive and world-class parts manufacturing industry that is one of the best in the Asean region.

The “China effect”:
The slow but steady entry of Chinese-made motorcycles into the country opened wide the local market for motorcycles, widened its client base and somehow, brought down the prices of motorcycles to competitive levels, thus making them more affordable to the masses. Retail financing was readily available, thus the industry continues to grow consistently at 30-40% annually, achieving a critical mass base. This resulted in the much-needed economies of scale for both the assemblers and local parts manufacturers, enabling them to expand their operations, provide stable employment to their workers and even invite foreign investors. MVPMAP is optimistic that this so-called “China effect” will do to the auto industry what it did to the motorcycle industry.

Tags: Philippine Utility Vehicle, Motor Vehicle Manufacturers Association of the Philippines, PhUV, MVPMAP