FX no more?

For the past several years, the Asian Utility Vehicle has been the rising star of the automobile industry. What began as a basic mode of group transportation catering mostly to the entrepreneurial Filipino has evolved into a pseudo-Sport Utility Vehicle, a family wagon, and a viable alternative to the passenger car. For 2001, Mitsubishi Motors Company (MMC) and Toyota Motors Philippines (TMP) released freshened versions of their Adventure and Revo vehicles, respectively. In June, Isuzu Philippines Corporation (IPC) released an all-new Hi-Lander Crosswind.

All employed evolutionary features. The high-end variant of the Toyota Revo, for example, features a host of comfort and convenience features more commonly found in a passenger car or wagon such as a power antenna, a lift-up tailgate, and leather upholstery. Meanwhile, the Adventure was rejuvenated with styling changes here and there (including a lift-up tailgate) to capture the SUV-aspiring crowd. For its part, the Hi-Lander Crosswind debuted featuring sleeker lines and the availability of a turbo diesel mated with a 4-speed automatic transmission for its top-of-the-line XTO variant.

According to figures released by the Chamber of Automobile Manufacturers of the Philippines, Incorporated (CAMPI), year-to-date statistics for the AUV segment show the Toyota Revo in the lead with a total of 9,856 units. The Mitsubishi Adventure follows with 7,036, and the Isuzu Hi-Lander a close third with 5,999. By comparison, Toyota has only managed to sell 4,779 units of its all-new Corolla Altis, while Mitsubishi has only sold 2,434 units of its ageing Lancer passenger car.

Owing to these developments, interest in the AUV segment has remained relatively satisfactory considering the economic circumstances and the September 11 tragedy. In fact, manufacturers even expect growth to occur in this market while the passenger segment continues its sluggish performance. And most aren’t being used as mere "FX" taxis anymore.

According to Rey Sevilla of Mitsubishi Motors (Market Planning), "The AUV segment has performed relatively well... In comparison to the Passenger Car segment, industry sales performance indicate that vehicle consumers these days are shifting their preferences from Passenger Cars to Asian Utility Vehicles because of the latter’s amenities and versatility. AUV assemblers also offer many variants to suit buyers’ preferences.

"Sales figures even indicate that compared to year 2000 sales the AUV segment was still able to register a positive increase by more than 2% despite the economic problems. On the other hand, Passenger Car sales have declined relative to last year, with sales declining by 20%. One probable explanation for this is that two of the major Passenger Car players, namely Nissan and Toyota suffered labor problems that affected their operations. This further hastened the decline that the Passenger Car market was already facing. But for the AUV segment, sales performance was strengthened with the introduction of new models among the three major players Toyota, Mitsubishi and Isuzu. Presently, the automotive industry is still confident with vehicle sales trend to go from Passenger Cars to AUVs."

James Mamaril, Assistant Section Manager for Corporate Communications of IPC concurred with this assessment: "As of November (2001), figures released by the Truck Manufacturers Association (TMA) indicate that of year-to-date total industry sales of 70,266 units, the Commercial Vehicle (CV) segment owns 69% versus Passenger Cars’ (PC) 31%. Within the CV segment, AUVs own 48% of YTD sales; this translates to 33% of total industry sales. [It also] indicates that the AUV continues to be the single most powerful segment in the industry as it continues to outsell all PC sub-segments combined."

Ariel de Jesus, Public Affairs Officer of TMP adds: "Despite a series of new model introductions this year that include the new Honda Civic, the Nissan Sentra and the Toyota Corolla Altis, the market responded lackadaisically resulting to a decrease of almost 20 percent from last year."

All three also hold the position that the AUV segment will continue to grow over the next few years, crediting the AUV’s strong value-for-money, rugged capabilities, and aesthetic development as its strongest selling points. In developed markets, manufacturers often talk of "crossover" vehicles that combine the capabilities of several vehicle types into a single platform. For a developing country like the Philippines, the AUV is the one type that performs closest to that concept.

"It used to be that the first AUVs were primarily focused with the entrepreneurial concept in mind (like taxis, etc.). But now, consumers shift to this segment because it has evolved into a versatile vehicle. A vehicle practical for the family, for business, for the youth, and for individuals looking for that unique AUV look," says Rey Sevilla.

James Mamaril adds that "Definitely, the continued popularity of AUVs will be due to the following factors: (1) bigger size compared to the average PC; (2) more versatility as it can be used to carry both people and cargo; (3) it’s the next best option to an SUV - current designs have improved aesthetics, at maybe half the price of an SUV; and (3) it’s a ‘mobile’ representation of the Filipino culture’s concept of group or family."

What’s the typical AUV buyer? Speaking for Toyota, Ariel de Jesus says "The Revo customer profile is comprised of around 70% male and 30% female, with most of them in their mid to late thirties of age.  Usually they are people who have their own businesses and/or hold a managerial or professional position.  The AUV market has expanded since its introduction in the early ‘90’s.  With the advent of more stylish and high performing AUVs, the market base has stretched from the middle class to the upper class.  We believe that this market base will continually expand in the coming years."

Finally, if looks and features were the main evolutionary highlights of the once-lowly AUV, what could possibly be the NEXT BIG THING for the segment? Other than mentioning unspecified "new features", manufacturers queried were understandably rather mum about the subject in the interests of product secrecy. Given that they see the AUV segment to be the one that will generate the most business for them in the next few years, it’s not hard to assume that product planners and market planners are busiest with their respective AUV offerings.

In fact, the progress of the AUV is rather similar to how the SUV evolved. What began as a "civilized farm implement" by the likes of the Land Rover and Jeep Wrangler has evolved into a popular, rugged, all-terrain wagon with levels of refinement, performance, and luxury comparable to a good passenger car. That’s exactly what’s happening to the AUV now, albeit on a less-capable, more affordable scale... for now, at least.