The number of vehicles produced by backyard operators using chop-chop and second-hand parts is huge. In 1999, the Land Transportation Office registered 153,000 vehicles nationwide. In that same year, members of the Chamber of Automotive Manufacturers of the Phils. Inc. assembled about half or 74,288 of the LTO total.
Most of the vehicles registered with the LTO but not assembled by CAMPI members are Asian utility vehicles or AUVs, which are a take off from the surplus jeeps of World War II. In turn, most of these backyard-assembled AUVs are patterned after the Tamaraw FX, the only one among the original five AUVs launched in the early 1970s which has not been phased out.
TMPC produces between 100 and 150 units of Tamaraw FX a month. "We will continue to produce the FX to keep our market happy," said senior vice-president for manufacturing Serafin Pantaleon. "When demand stops, we will simply retire the old production system that makes the FX."
"We came up with the Tamaraw Revo to get away from the image of the FX, which has become a generic term for air-conditioned taxis that can carry up to ten passengers at a time," Pantaleon said.
The Revo currently comes in five major variants to meet the shifting needs of the middle income group that increasingly sees the AUV as a combination pick-up, station wagon, mega-taxi, shuttle service, family van and off-road 4 x 4 vehicle.
"At the low end, we cater to those who want an improved version of the FX; at the high end, we cater to those who aspire for a sports utility vehicle or an SUV," Pantaleon said.
Based on CAMPI data, TMPC is the market leader in the AUV segment, which accounts for 32% of total vehicles sold in the first eight months of 2001. Despite such a huge market share, there are only three competitors in the AUV segment.
TMPC markets its AUVs the same way it does its passenger cars.
"On the one hand, Filipinos see the AUV as a personal extension of themselves. On the other hand, the decision to buy the AUV is a family decision. Kids plays an important role in clinching the deal," Pantaleon said.
"A buyer who cannot afford a higher-end model will settle for one with less amenities such as power windows. The first chance he gets extra money, however, he will go and buy something to spruce up his AUV," he added. "That’s where the availability of local parts comes in."
Industry data place total investments of suppliers to AUV assemblers at P27.3 billion as of January 2001. These 256 direct and indirect suppliers employ 40,400.
For its AUV assembly, TMPC lists 31 parts that are locally sourced, either by subsidiaries or suppliers. These range from the important parts such as the transmission assembly to the not so important parts such as mudguards.
To pay for imported parts such as engines, TMPI is required by the BoI to generate at least 25% of its total dollar requirements.
In the early 1990s, that meant exporting everything from wiring harness to frozen pineapple and wooden chairs. In more recent years, TMPI has easily met the BoI requirement by selling purely vehicle-related products. Last year, TMPI accounted for 23.4% of the industry’s total exports of $1.011 billion. Export shipments of car audio generated $83.6 million for TMPI; followed by wire harness, $77 million; and transmission, $55.2 million. TMPI’s total investment in AUV assembly is placed at P5.8 billion as of January 2001. With its 1,430 workers, it takes 60 man-hours to put together a Revo. "We only make what we can sell. We don’t hoard because that costs money," Pantaleon said.In the coming months, TMPI expects to make more FX and Revo units. "I’d like to think that the AUV is the Philippines’ first step towards motorization, which is that stage in a country’s economic development when people prefer to ride rather than walk," Pantaleon said."Traditionally, the motorcycle is the first step in motorization. But Southeast Asian countries have not followed that pattern. In Thailand, their launching vehicle was the pick-up; in Malaysia, it was a national car called the Proton; in Indonesia, it looks like they will follow the Malaysian model." The AUV has come a long way.