Kudos!!!

Last week, I wrote about the Philippine Ice Hockey Team’s participation in the Sapporo Winter Games and the warm send-off they got from the Federation of Ice Hockey Leagues of the Philippines together with the Philippine Olympic Committee. Hopes were high the national team would do well as they have been practicing on ice (at the SM Ice Skating Rink) four to five days a week since July of last year. Well, they did !! The team got bronze. And it was the first ever for a team that comes from a tropical country to reach the semi-finals in this division, the feat made even more amazing when one considers that this is a very young team.

Federation of Ice Hockey Leagues in the Philippines’ president Chris Sy (the godfather of ice hockey in the country) broke the good news to me, but shared some other stories on the side lines as well. Like many international sports competitions, the Sapporo Winter Games was not lacking in controversies, and while the Philippine team was happy with their bronze win, they lodged a formal complaint with the organizers based on what they perceived as unfair competition from some sectors. Under the present rules, foreigners may play for another country for as long as they are residents of that country. It seems that some countries (which I will not prematurely name here) fielded foreign players who are not nationals or residents and the officials of the Philippine team were reportedly able to secure documents to prove their claim. If the allegations will be proven by the Philippine team, we may end up not only with the silver, but even the gold medal in the division that the team played in. Let’s all watch out for the developments here while the official investigation is ongoing.  Our national pride is at stake.

New field in the automotive industry

I had the pleasure of meeting the new president of Volkswagen Philippines, Arthur Tan who took over from JP Orbeta who has since resumed his multiple corporate duties at Ayala Corporation after successfully re-introducing the Volkswagen brand here. In the ’70s, their brand was easily the most popular in the Philippines, with the VW Beetle dominating Philippine roads.  It was indeed the people’s car, but with its departure from the Philippine scene, the brand slowly got eclipsed by other foreign brands, most notably the Japanese vehicles.

 Art has been with Ayala Corporation for 15 years now, involved with the manufacturing side of the business, more specifically at Ayala’s Integrated Microelectronics Inc. (IMI).  He is an electrical engineer from Mapua and worked in the Mid West for several years.  In fact, he is credited with designing the chips that now run the digital speedometer for General Motors cars.

Unknown to many of us, IMI has been a very profitable venture of Ayala Corporation and half of its revenues amounting to around $400 million is attributed to manufacturing parts for automobiles. This explains why Tan is the mother company’s logical choice to head its VW business in the Philippines. IMI manufactures in several different countries, and the company has a total of 14 factories across the globe.

Speaking from an Ayala Corporation perspective, the management decided to consolidate their interests in the automotive business, both in the manufacturing side and on the dealer distribution side. The company has decided to put more focus on developing the Volkswagen brand in the Philippines, bringing in more models to the market. But more than that, from the manufacturing side, they see great value in producing the electronic components for the current and next generation vehicles.

Integrated Microelectronics Incorporated is only one of the few companies in the world that manufactures front end camera systems that are currently used in advance driver assistance systems (ADAS) or self-driving cars.  Some of those self-driving cars that we see on the road are actually equipped by products built by IMI here in the Philippines.

“We see the trend where the car itself is going through significant amount of disruption—the mechanical car transforming itself into an electrical one or a hybrid one. As of 2014, 35 percent of the value of a car is already attributed to the electric component, and we anticipate this to go up to 70 percent in 2025…when we actually go to full electric or self-driven cars,” declared Art.

According to Tan, Ayala Corporation sees an opportunity where the landscape of producing cars in the infrastructure that we have, which is now imbedded in Thailand and Indonesia for producing mechanical cars, is now disrupted.  With this disruption, the mother company sees this as an opportunity in the Philippines for next generation vehicles which will be more towards electricity-driven vehicles. Because of their extensive background in IMI where they produced critical parts for safety systems and chassis control, the company has the chance to become a major player in this new and exciting market. 

That is the vision the company has for the Philippines — to make it as a gateway for the ASEAN market.

I remarked to Art that the VW brand does not resonate with the present millennial generation of vehicle buyers.  According to Art, it is because of the current market situation where the Philippines has been unable to establish a free trade agreement with European brands, resulting in an uneven playing field brought about by high tariffs and duties for European vehicles.  Other car manufacturers are able to bring in their vehicles into the country at much lower tariffs. VW Philippines is now holding talks on a possible free trade agreement with the European Union, and Art expressed hopes that the benefits of this FTA, should the talks be fruitful, would trickle down to the Filipino consumers.

But because the brand is an old and reliable German brand, Art said, it continues to be strong even in the Philippine market. They are able to do this because of the common platform known as MBQ, a manufacturing process that they share with other prestigious European brands like Audi and Porsche. The next generation models VW will bring to the Philippines will be attuned to the consumer market, Art said.

Mabuhay!!!  Be proud to be a Filipino.

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