MANILA, Philippines - Hyundai Asia Resources Inc. (HARI) is taking advantage of the implementation of the ASEAN-Korea Free Trade Agreement (AKFTA) by aggressively expanding its presence in the country in the next five years.
The executive order for the implementation of the AKFTA was published yesterday and would be implemented after 30 days. Upon implementation, tariffs imposed on cars imported from Korea would be reduced to 20 percent from 30 percent and would be further reduced to five percent, even zero by 2016.
In line with this development, HARI, which distributes completely-built up (CBUs) units from Korea, is opening four more dealership hubs this year in Marilao, Bulacan; Baguio City; Tacloban and along EDSA.
By the end of the year, HARI will have 45 active dealerships.
It also intends to double its market share–presently at 13 percent – by 2016.
“We have a minimum of 20 applicants now for new dealerships. But we have to rationalize and optimize our dealer network so we have to do a regional review of our presence in the country and see where we can improve our market share,” said HARI president and CEO Fe Perez-Agudo in an interview during the ceremonial turnover of Hyundai vans to the Asia Development Bank (ADB) yesterday.
“We have been waiting for this for years and we would like to thank the government for finally releasing the implementation of the AKFTA. I think this will make our cars more competitive and we will witness again another change in the landscape of liberalization,” she added.
HARI is one of the official mobility sponsors for the 45th annual meeting of the ADB Board of Governors which would be held at the Philippine International Convention Center (PICC) in Pasay City from May 2 to 5.
HARI has revised its sales growth target expectation to 20 percent this year from a flat growth rate in January as the supply chain recovers.
HARI’s sales grew only one percent last year with only 20,297 units sold against 20,172 units in 2010. Its 2011 performance was largely bogged down by a 10 percent decline in commercial vehicle sales to 9,597 units from 10, 722 units in 2010.
It closed the first quarter of 2012 with a 44 percent growth in car sales because of a strong turnover of its passenger cars. Sold during the period were 6,767 units from 4,712 units in the same period last year.
Agudo said this year, HARI is banking on its design and technology car models such as the Accent, Tucson, and Elantra, and Sonata to drive up its sales.
In the first quarter of the year, HARI has launched the 0.8 liter compact car EON, the three-door sports car Veloster. It will launch its newest variant of the Santa Fe in the third quarter of the year.
Aside from the new models, Agudo said sales would be driven by strong macro-economic conditions such as the steady inflow of OFW remittances and favorable exchange rate.
The reduction of tariff on vehicles imported from Korea would not result to the lowering of prices of Hyundai vehicles, but would instead be reinvested to add value to the products.
“With this development, Hyundai would be more proactive. We would be using whatever savings we would be generating in this and returning it back to our customers through better service and better facilities that they would enjoy,” Agudo added.
“Our prices right now are really competitive already. We have already programmed it in such a way that when the AKFTA happens, there won’t be price distortion,” she added.
She said that the implementation of the AKFTA would ease its three month backlog for its Elantra, Accent, and Starex models.
She said the waiting period for car orders would also be shortened to a month instead of three.
Agudo said that as of the moment, there are still no plans of putting up a manufacturing facility in the Philippines.