Why the Philippines Automotive Manufacturing Sector Failed 

What should the Philippines do to promote its automotive manufacturing industry? Let us know down below!

Why? Short sighted politicians, ridiculous red tape, "Oh, we're losing too much money from corruption? Let's increase the taxes instead", e.t.c

Bunch of corrupt and stupid officials

Magaling lang tayo mag maritess, mag tiktok, instagram, mag facebook, manood ng k-drama, tumangkilik ng foreigners at hindi locals. We are a nation of consumers, not producers.

Out of stock Sir. No stock Sir. Brown out Sir. Can't work today Sir. Birthday party. Or tomorrow either. Hangover.

Philippines even failed to make sports shoes some years ago.

Corruption, corruption, no lagay ! No way !

Corruption is rampant

Setting aside the corruption allegations and poor short-sighted methods of taxation a bit, and yes they do play a factor... I can see three reasons which are interconnected: Lack of Infrastructure and Tooling, Lack of Technical Expertise, and Lack of Innovation. Lack of Infrastructure and Tooling means we haven't got the tools and machinery to manufacture major components of a vehicle. We also cannot manufacture them in a way where we can reduce the overall production cost and more dependent on manual labor on some aspects which manufacturers from other countries use machineries for. That means they can churn out multiple components in the span of time we need to make one of the same. Which leads me to the second... Lack of Technical Expertise where we're limited on the parts and components of the vehicle we can manufacture. I don't mean we don't know how an engine, transmission, axles, or ECU (engine control unit) works, rather we don't know how to manufacture them in mass. Technically speaking, since we've partnered with manufacturers for local production whether be it from the US, Japan, South Korea, Europe, or even China, you'd think by now, at least one of them have trusted us the ability to manufacture major components such as engines, drivetrains, electronics, etc., but no... we always source them outside the country and just "assemble" the components here. And sadly, since we lack this technical expertise especially in the manufacturing of such components, when we do try to manufacture them, they end up expensive and subpar in quality. Say what you want about Chinese products having poor build quality, our Filipino quality is no better and in instances, actually worse and more atrocious. Finally, lack of innovation. For all what Filipinos claim about creativity, realistically we're not a very creative bunch and what we call our "inventions" isn't actually coming from the Philippines, rather it has been developed or discovered in other countries, we just put a bit of "Filipino flare" in it then claim it our own. Sad reality. Anyway, the video mentions Francisco Motors and Sarao Motors. As a collective, jeepney manufacturers (or rather, Jeepney body builders, since that's all what they are) for whatever reason either struggled or refused to evolve for decades. The jeepney of 3 or 4 decades ago is basically the same as the jeepney of today, give or take just different aesthetics and gimmicks (some gimmicks being borderline retarded). The jeepney of today follows the same recipe as the jeepney or the 1970's or 1980's. We take a chassis, engine, axles, and transmission of scrapped vehicles from Japan, and built a jeepney body over it which has some blokes manually beating and hammering a piece of sheet metal and spot-welding them to place. Some claim "craftsmanship" while others call it inefficient manufacturing. Sad thing is these jeepney body builders still are unable (or on instances, refuse to go with the times and evolve). Long-story short, the jeepney has ZERO SIGNIFICANCE to other countries, while manufacturers from other countries make vehicles which are significant, with a demand, market, and at times tailored to other countries, being "homologated" therefore can be sold worldwide. What's kinda depressing is that the country is currently implementing a PUV (public transport) modernization program which basically has only two requirements to be accredited; minimum and maximum dimensions and a Euro 4 emissions compliant engine. These jeepney manufacturers still insist on using pre-Euro emission standard engines, and they cry "foul" that they are being "targeted" by the government ignoring the fact that they're still pushing a vehicle with manufacturing methods from the 1940's. Meanwhile, local bus manufacturers like Almazora Motors (as in the video), Centro Manufacturing, Sta. Rosa Motor Works, Del Monte Motor Works, and the lot have partnered with OEM manufacturers like Hyundai, Hino, Isuzu, Mitsubishi Fuso, Foton, FAW, etc. to produce quite a wide variety of vehicles. I will admit since they are OEM and using brand new components, they are quite more expensive but not exactly apples-to-apples comparison from someone using hand-me-down parts from scrapyards of Japan, is it? Also, if I may add, Elmer Francisco of Francisco motors is just out for Social media clout at this point. I remember how arrogant that guy was bragging about the "quality" of his jeepneys while slamming the "poor quality" of foreign brands especially that from China He proceeds to brag about a supposed "Filipino-made" van called the Francisco Harabas, and then it turned out it was a Chinese manufactured electric van Wanxiang Auto T01. So much for slamming China's quality build, only to find yourself going back to them. The sad thing is way back in the 90's, the Philippines was actually exporting vehicles to other countries, more prominently on the segment of buses. Columbian Motors (through Sta. Rosa Motor Works and the now defunct Nissan Diesel Philippines Corporation) and Pilipinas Hino have exported products as far as Guam, Hong Kong, Japan, and as far as I know, even Arab countries. Manufacturers here even sometimes tailor a model specific to a country's requirement like Hong Kong and Japan. Nissan Diesel actually had a model of Japanese Coach named "Space Arrow Euro Tour" which was manufactured by Nissan Diesel Philippines Corporation in Sta. Rosa Laguna using Japanese model specific components, engines, and dimensions. Japan for their strict quality control and their keen attention to detail have took in something from the Philippines. All of those considered, we have ended up having the highest manufacturing cost while we lack proper quality control on some cases. Just sad, to be honest. It's gotten to a point where a fully-built Chinese commercial vehicle is miles cheaper while offering similar (or even better quality) and even more features than what the local manufacturing has to offer. It's even gotten to the point where high end Vietnamese bus/coach with European spec engines and components from Sweden is market-competitive compared to a locally-manufactured bus/coach. It's that bad.

Reality... The Philippines = a Great Importer Nation 🎉🎉🎉

labor union , hi price Electricity, corrupt Lgu , BIR , poor infra etc.

Filipino workers that are left in the country are sub standard because the quality workers we have are exported.

The philippines had the resources to make steel to make cars but instead of making it we too lazy to make it. Its profitable to import steel and sell it locally.

with a fragile energy grid system and high corruption, manufacturing in the Philippines is not advisable.

the philippines doesn't even have a toothpick factory, what more with automobiles.

Philippines should build their own transport that suit their geographic area ( sea and land combine ).

The Philippine Managers and Lawmakers mismanaged and short plans its future outlook on the economy. Everything in Philippines are importation. FDI are leaving because high cost of electricity, too many red tapes and policy.

Philipines have to iron out cumbersome abstruse red tape to entice foreign car makers to build factories in their own nation. What a missed opportunity!

The BRI would have been finished in 12 months... there would have been proper roads for Cars. China certainly isn't going to Invest where it is not wanted. Why should it? Japan is screwed, Toyota is getting out and going to China.

I'm disappointed you failed to mention 2 of the biggest hurdles to manufacturing in the Philippines: high cost of electricity (highest in Asia actually, even more than Japan) and lack of skilled labor. Throw in uneven implementation of local tax policies, militant labor unions, and basically no protection against smuggled goods, and you have the perfect toxic brew that'd kill any manufacturers naive enough to believe in the Philippines government promises

Unstable Political climate in my country is the reason why Investor is afraid to take the risk ,When DU30 take office HONDA PHIL.quickly get out of Philppine and INTEL when Marcos take office. It is only during the Late PRES PNOY that the INVESTOR came .

There's actually more to it than the blatant issue which is corruption. Because the Philippines has been taken over by three countries In it's history and it has developed a thinking that Local produce sucks and imported products are ten times better. This mindset has proven to be ineffective when it comes to Filipinos trying new things like Automotive or manufacturing stuff, their first bashers will be fellow Filipinos patronizing imported products. Also, local brands tend to be more expensive than imported products because of tax that's why a normal Filipino would just prefer imported products because it's cheaper and less taxed. that's why it's so hard to innovate here for this reason, Local products are hated on until it becomes an international hit where them haters become "Proud Filipinos". that's why we're so vulnerable to scams because we're that easy to predict and manipulate

if philippines would seriously wants to stand up against the bully, you have to better yourself, stand on your own feet and develop, help own blood manufacturing sectors and startups inventors, otherwise you will always be dependent to stronger nations around you, politicians, local oligarchs, please wake up. we now live in a global village of the internet, communications and transportations, if you cannot evolve sooner or later, you and your local businesses will collapse....love from 12 million overseas filipino workers.

tropical island and manufacturing simply don't mix well together. unless they go to baguio city, that place is simply a different place from the rest of the country.

Philippines thrive because of OFW. Without the OFW Philippines is in bad shape.

Business will only go to a country if there is profit. Many factors are against Philippines for manufacturers, high electricity costs, corrupt government, underdeveloped infrastructure and red tape among others.

As the comments said so below, one reason is corruption. No one will invest in a Philippine-made car manufacturing plant here as politicians will bleed them dry. There's no vehicle protectionism for local manufacturers here like they do in some countries like Malaysia. Philippines doesn't have an engine manufacturing plant, just assembly of car bodies but the engine is the heart of a car. Even as Philippines have vehicle assembly plants by big foreign brands, some have moved away as its more profitable to build a plant in other countries than to make vehicles here and export them. Even when there is a demand for new cars here, their availability will be limited as car manufacturers would rather export them out than sell them locally and so the wait time was longer and eventually customers gave up and decided to buy another brand. Car manufacturing must be vertically integrated in such that most materials, raw or finished, should be locally available to produce a whole car and not source many parts from abroad thereby making it more expensive. In general major car brands here will not survive if their sales are low and low sales will mean poorer income, high operating capital and so they will just close shop and resort to imports. Lastly the business climate in the Philippines may not be conducive such as expensive electricity, cost of labor or maybe unfavorable taxes, which is a turn off for investors.

It is a delusion that when one country gets democracy + be friend with the US/West, it is automatically successful. This is the assumption that the West often preaches about. They often refer to Japan/Taiwan/SK as example, but conveniently ignore cases like Philipines. I argue: the success comes from nationalism + unity + collectivism, which are embraced by Chinese mentality for thousand of years. Countries like Japan/SK inherited Chinese culture, thus, leading to their success.

The Philippines is a "Service Oriented" economy in the world. Thats not where our money comes from.

A Toyota car plant exists in the Philippines. Honda is also there if I remember correctly. May I ask where you got the info that there isn't a major car brand operating in the country?

1. No powerful vision. 2. Lact of Skil labour. 3. Corruption.

Philippines can never compete to low cost manufacturing Industry because of the following reasons: 1. Electricity cost is high 2. Being an archipelago logistic cost is high 3. High Labor Cost But Philippines has significant advantage in Service Industry such as BPO.

Too many holidays, paternity leave, maternity leave, labor union, too many permits to do business. High tax and electricity cost..

The sound effect at is way too loud! 1:28

Just to paint a picture, the president, VP, and their whole party has a very long list of plunder controversies. And if that's not bad enough, the president is literally a drop out that failed ECON101 and has never been employed his whole life so one can imagine how out of touch he is with reality. So he addresses most food shortages with increasing importation and price freezes. A tactic that has been a no no to even novice economists.

People wanna blame politicians. Honestly the biggest problem with anything in the Philippines are the Filipinos themselves. It's a cultural problem. Producing anything noteworthy is just not in our culture.

Simply put…average workers cannot afford to buy cars so demand is low

Militant Unions anak bayan, KMU, Gabriela, Anak Pawis etc. If you invest in the Philippines they will form union then ask for ridiculous demands such as paid birthday leave, high wages, idiot employees that ask for so much and give little

The Philippines government need to open Foreign Direct Investment/FDI, support through incentives/subsidizing the auto industry, acquire technology transfers to locally design and build cars, create and develop foundation for supporting industries and gain mass public support for local brands over foreign brands. VinFast from Vietnam, my mother land country just started selling electric cars like VFe34, VF5, VF7, VF9 in the Philippines. Thaco Auto from Vietnam also exports locally made buses to the Philippines too. If the Philippines, Indonesia and Thailand can't have a national car brand they can at least support other South East Asian brands like VinFast which is the only country from SEA to sell electric vehicles around the world.

If the Philippines exploited it's propensity for geothermal power to be able to offer green power in huge amounts AND managed to be able to issue RECs for that power, they would have a unique selling point. Most countries will need green produced parts by 2030/35. This would be very welcome by energy dense industries like steel, semicon and so on. In addition, surplus RECs (from domestic and retail power usage) could be sold on the open market to bring valuable dollars into the coffers. However, this has little traction. In addition, there is also a massive union problem in the country, hence global players avoid. It's sad, because there are skilled professional workers, despite what people may think. Returning overseas Pinoys, they have been taught and given experience all over the world. They can also be used to train the young guys. So much potential, so badly strategised.

Its because of that country's stupid politicians

Given the levels of pollution, they don't need to. Plus the cost of electricity and logistics may not make this attractive as well.

One thing not mentioned here is the absence of Steel Mill. PH have one before, but been closed.

Theres public transport in the PH and cars are expensive relative to the salary. Cars are luxury.

1:29 audio problem

The same people who answer "Corruption" in the comments are the same people who would vote for Marcos and Duterte

1:28 loudest woosh i've ever heard. I mean jeez it threw me outta my seat!!

So few people in the Philippines can afford a car, that's why scooters/motorcycles are more popular - they are cheaper. If more cars are purchased, there will be a need for more suitable roads to handle the increased volume. Spend an afternoon driving through Manila or Cebu City and will see roads and traffic management are a total afterthought in the Philippines. It takes hours to go a modest distance. The large and more populous islands (Luzon, Cebu, and Mindanao) should each build their own railroad to move people/goods from one end of the island to the other. Initial investment will be costly (similar to roads) but trains are more efficient when it comes to moving goods and passengers.

High cost of power is prohibitive! One of the highest in ASEAN!

the Philippines has the best export in the world. it's people. it's a bottomless supply of people because even with so many people exported all around the world, we are still over populated

Two things for me, one electricity which is the major component of all large manufacturing. Electricity in the Philippines other than being expensive it is also limited. How many times did the energy providers had announce that the grid is in danger of shutting down due to inability to cope with high demand and this is even without the large manufacturing plants like what other countries has. Second is low demand locally, if you notice the 2 large remaining manufacturing car brands are also the top brands in the country. If Toyota and Mitsubishi started having less sales here I'm guessing they will also close shop just like Mazda and Ford. The only way I can see that happening is when Filipinos will start liking Chinese cars. Knowing Filipinos love for more cheaper products over quality that is a big possibility in the future regardless of the current problems of the country with China.

what manufacturing are we talking about . maybe importer of whole units with tires and batteries . they classified these as semi knockdown

0:44 what about Francisco motors and aurelio

Lagay , lagay , lagay sa mga corrupt na politico ... ano pa ... thats the answer my freind

We used to see a lot of products made from Philippines. We don't see much anymore. Why?

1:28 dude wtf?

In Mindanao we have also donsals..

Correction: the purported FMC Harabas is actually derived from a Chinese EV, not a local model

simple. the car market in the Philippines is smaller than wealthier countries. Toyota also has greater marketshare in the country where it made the other brands leave. However, there is a lot of untapped potential in the Philippines since the salaries in neighboring countries (thailand, malaysia, indo, etc) are higher. If the Philippines, manages improve manufacturing costs like energy, supplies, etc.....the country might make an automotive comeback and export cars to wealthier countries.

Phinos go own ways, different military direction from ASEAN mainland -6 members (Railways) + Pancasila Indonesian。 Vietnam (Russia) 100mil pax; Thai-Msia (BRICS framework) 104mil pax; Indonesian-OCED 280 mil pax neutral. Welcome to invest at Malaysia has supply chain EVs / Micro-chips , Msian are speaking Melayu, Mandarin, English.

Philippines will never be an export oriented goods manufacturing country because its government could care less. For them, labor export, BPO and Chinese offshore gaming businesses revenues are adequat enough to make it appear the economy is thriving on the surface by having local retailers build malls on every place they could and promoting more and more imports of foreign goods.

0:51 it's because Filipino's don't like/support local products. We like imported not local😅

Because of corruption. Sweet and simple

The sad part was that young Filipino, tend to think or assume that if it was "local" it was not a good quality product😢

Corrupt Government Employees plus undisciplined citizens is equals to Bahala na kayo jan

Mabuhay ang pilipinas,,,!!!@@

During the time of pfem, Toyota had a manufacturing plant. I think it was in sukat. And he started to build a cocodiesel engine. Wch his govt would used it. Example 50 coco diesel to deped ,50 to military so on and so forth. That idea died when new govt was established in 86

Rampant corruption in the Philippines, is reason why down the deficit

1:27 Jumpscare Warning for Earphone Users

The rot always start from the head. The Filipino government has rotted under bongbong marcos Jr. Everything else rots from thereon.

Corrupt officials (mostly) not 1percent are good

High energy cost, slow and inefficient rules and regulations designed to be their cash cow and corrupt officials.

Not properly trained technicians or maybe techs failed to learn for whatever reason.

Taxes. Energy costs. Talong talo talaga tayo

High Cost and Unstable supply of Electricity & Water.

Their leaders are busy printing money for themselves 😅

What about Francisco Motors? They manufacture modern jeepneys and cars

Laws pertaining to oil importation, energy regulation, and rice importation, among others, that prohibit government control over prices create an environment conducive to corruption.

One factor should be the lawmakers who didn't even study law

Phillipine đang có tốc độ tăng trưởng kinh tế cao nhất Asean. Tương lai đầy hứa hẹn với Phillipine

Disruptions in Chinese supply chains, such as those caused by the COVID-19 pandemic, price volatility, and geopolitical tensions, have negatively impacted the Philippine automotive manufacturing industry by causing delays, increased costs, and uncertainty. It is noteworthy that the geopolitical tensions come from China because the Philippines stands up for its sovereign rights without Rodrigo Duterte in office.

Filipino dont care about this , they care about Beauty Peagent 😅

Nang hihinayang Ako sa mga classmate ko sa highschool na nakapag trabaho sa Toyota Motor Philippines after Ng aming graduation, pero nawala Sila Kasi na impluwensyahan Sila Ng Union. Sayang Ang mga magagandang benefits na natatamasa nila sa kompanya pero nawala dahil sa union na sinalihan nila.

not only in the Philippines. Also in Thailand.. Suzuki in Rayong Thailand will close next year. also Honda Assembly plant in Ayutthaya Thailand.

The real culprit is the 60/40 restriction embedded in our constitution. If we only let foreign direct investment flow and had foreign entities own 100 percent of their company here in the Philippines, these auto manufacturing plants' closures would have been prevented.

How did it failed?? Tell me.

1:31 i had headphones on full volume my ears hurt

1:28 loud jumpscare Why is it so loud???

Poor country ..😢 because of the corrupt government officials😢

My comment has been deleted.

Sarao is a junk shop, not a car manufacturer.

I don't think these manufactures are shutting down their plants due to production rate. Demographic is the key here. It likely these are for Asia and or Europe so location and transportation cost would make more sense to move their plants. The govt of Phillipines is part of the role as well. Any investors would first look at is the stablization of a govt.

that is the saddest reality for ph coz corrupt and crocodiles are everywhere and greedy for power only rich people become more rich and poor people become poorest and our govt not cared about its people ph is behind so many decade to upgrade its society and infrastracture and economy business

It's not the corruption of the Philippines it's the constitution per se, we limited foreign direct investment hence hindering investors putting up business in our country so our constitution is a down side

No love and care for our country. That's the reason.

Politicians prefer imports in many basic needs because they get a portion of tariffs.

the Philippine manufacturing failures are only applied to U.S., Japanese and Korean cars but not with Chinese cars

our main industry??? labor exports!!! no f.d.i.??? simple, we have one of the highest power rates!!!!

High cost of electricity, No metal industry, no chemical industry.

Government should subsidize and infuse money to the local automotive industry. it should help industrialize the production of automobiles. Help create the research and development and stimulate production engines and parts. The government should partner with the local manufacturers and hire people with knowledge in production plant. It should create an environment where local manufacturers would partner with big car manufacturers so they may learn the indurstry. Product engineers for the research department