China's biggest carmakers – Chana and First Auto Works (FAW) – plan to invest in an assembly facility in the Philippines once their sales volume hit at least 100 units a month, which is expected to be attained in a year or two, and once the proliferation of chop-chop cars has lessened.
Stephen D. Sy, president of local Focus Ventures Inc., the local distributor of Chana and FAW automobiles in the country, told reporters at the launch of the 3rd Philippine International Motor Show that his Chinese principals have been prodding them to put up an assembly plant in the country.
Investments in an automotive assembly facility may cost $8 million and they will concentrate in the niche small cars, small and mid-sized vans, Sy said.
"But we have to have the volume first before we can go into assembly," Sy said.
Since it started local distribution of small cars, mini vans and mid-sized vans two years ago, Sy said the company is now selling an average of 30 units a month.
"The trigger point is to sell 100 units of vehicles a month to be feasible," Sy added. An assembly facility may cost $8 million with an assembly capacity of 200 to 300 units a month.
At the rate they are going, Sy said they may attain the 100 unit sales a month trigger volume in a year or two. According to Sy, its number one problem is the proliferation of chop-chop vehicles that are directly competing their small cars and vans.
He said that chop-chop cars, which are assembled through backyard assemblers, is selling at P150 per unit or almost half the price of its P280,000 brand new best selling model 1016 Multi Carry One.
Sy said that its markets are small business entrepreneurs and companies engaged in goods delivery business.
"This is a very niche market and if we will do local assembly it should be in this niche models," he said. The company has already 6 dealers nationwide and plans to increase this to 10 in the next two years.
