Hyundai Asia Resources Inc. (HARI), the distribution arm of Korea’s Hyundai Motor Company (HMC) in the Philippines, will now offer trucks and buses in the country, seeing demand coming from a bustling infrastructure and construction sector.
HARI and its Korean parent company signed a commercial vehicle distributorship agreement on Monday, which granted HARI exclusive rights to distribute Hyundai trucks and buses.
HMC said the new business would solidify Hyundai’s presence in the Asia Pacific, adding that it believed the Philippines was a “bright spot” in the world economy.
Fe Perez-Agudo, HARI president and chief executive officer, said the Hyundai Group saw the Philippines as a “vibrant market that attracts players” because of a stable economy as well as the increased performance of the local automotive industry.
She said the company might distribute 800 trucks and buses this year in the light and heavy categories.
The country’s third most popular automobile brand sees demand for such vehicles to rise this year as the government aims to make infrastructure spending contribute $7 billion to $12 billion to the Philippine economy.
“Light trucks, heavy trucks, and buses first,” Agudo said.
“Our focus right now is the categories 3 and 4. The light duty trucks will be the models HD 65, HD 74, and HD 78. Then for the heavy truck, we’ll have the dump truck. We’ll bring in first the first six models before we’ll go to categories 5 and 6.”
Agudo said was Hyundai targeting a 10-percent share of the total commercial vehicle market by 2020, in line with the firm’s five-year plan dubbed “Ascent 2020.”
“With our Ascent 2020 vision, we’re going to start with five dealerships, and we’ll double it every five years. [For commercial vehicles,] we’ll start with 800 units this year. On the fifth year or by 2020, we are looking at a 10-percent market share,” Agudo said.
She estimated that Hyundai could distribute around 2,000 trucks and buses by 2020 if the auto industry continued to grow by an average of 16 percent yearly.
With the Asean-Korean Free Trade Agreement in place since October last year, Hyundai said it has been enjoying a five-percent tariff, down from its previous 20-percent duty.
Agudo said this gave Hyundai P50,000 to P200,000 savings per unit, depending on the size and price.
She said Hyundai trucks and buses were “competitive” vis-à-vis the two auto giants in the country—Toyota and Mitsubishi—as Hyundai vehicles are five percent cheaper but still with the same specifications.
As for passenger cars, Hyundai sold 2,387 units in January, a “record,” according to the company.
Agudo added Hyundai was also planning to launch “a small SUV before the end of this year.”
Agudo, who is also the president of the Association of Vehicle Importers and Distributors (AVID), said the industry group expected “double-digit growth this year” given the continuing demand.
AVID data indicated that imported vehicles sold in 2015 increased by 65 percent to 58,712 units versus 35,593 units sold in 2014.