Big change from distributor to subsidiary

The Philippine automotive market -like any other big industry- is one big rumor mill: what model is being launched, who is going to what brand, sometimes even who is dating whom.

In the last few months, however, it’s been about which brand is coming, who is heading it up, and when they will start.

But out of all the brands we have talked about recently are new incoming players to the market that have yet to establish credibility with Filipino buyers. That will not be the case this time, as this brand is already established here, but they will undergo a big change very soon.

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We can now tell you that Geely in the Philippines will not continue under a distributor partner. For almost 5 years Geely in the Philippines has been established and managed by Sojitz G Auto Philippines (SGAP). Actually it was SGAP that truly grew the brand in the country thanks to a series of popular models that showed Filipino buyers that there is something special about their models.

Soon SGAP will be handing over the keys to a new company that will be established by Geely Automobile International Corporation (GAIC); the news comes straight from a GAIC executive and an SGAP executive who visited our office earlier this week. That means the new company (that is yet to be named) will be part of the larger organization of Geely.

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SGAP President Naoyuki Takeda with incoming Geely PH chief Will Wan

Currently, Geely executives are in Metro Manila and are busy setting up their operations. The incoming head will be GAIC executive Will Wan who will be the new chief of Geely in the Philippines. The new headquarters here will be in BGC or Makati, and the target transition to the new company is July 1; that isn't much time to set up a big company that can manage all of this, but we think they can do it. 

So what does that mean for the stakeholders, dealers and customers? Quite simply: greater access. While all large automobile organizations differ, a subsidiary generally has a direct line to headquarters for many things like operations, after sales support, parts supplies and more.

As you know, those have been issues that a fast growing brand such as Geely has had challenges with in the local market. Such problems should vanish (hopefully) with a subsidiary coming in because it is in their best (and direct) interest to ensure everything is smooth. Their name is on the door, and they must make it work. 

The other benefit is going to be new models. The executive spoke of several models that will open for launch in the Philippines which would include the Monjaro (midsize 5-seater SUV), the Starray (the compact SUV/Azkarra replacement) as well as the new and improved Coolray. All this would be a matter of timing. 

There will also be the advantage of pricing. In the current set up, several insiders have informed us SGAP doesn't order the vehicles directly from China. Rather, it is Sojitz in Japan that does the ordering, then their subsidiary SGAP orders from Sojitz. It's a rather unusual set up, but as you can imagine it has an effect on prices.

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Either way, the fact that Geely is coming in officially literally means all viable models they have in China could be offered here and at better prices. expect that they will be looking at 1.5 Turbo and 1.5 Turbo Hybrid models given the advantage when it comes to import duty. We got to drive all those models very recently in China, and we’re going to be rolling out more video content soon.

As for Sojitz, they are working towards a smooth handover to the new company under Geely, as the last thing they want will be to have a rocky and intrigue-filled transition. Sojitz will be retaining the Fuso brand in the Philippines, but we wouldn’t be surprised if they start exploring other options for automotive brands to offer to Filipino customers. After all, Sojitz (Nissho Iwai) has been here since the 1987 with Mitsubishi Motors.