The Philippine government has recently announced that by May 16, NCR, Laguna, and Cebu will transition to towards modified enhanced community quarantine (MECQ). Now, what does MECQ mean for the Philippine automotive industry?
Unlike enhanced community quarantine (ECQ), MECQ finally allows most (not all) industries to operate at up to 50 percent capacity, and this includes car dealers. This means that only half of the dealer’s workforce can report to work while the other half should work from home or off-site.
Additionally, motor vehicle manufacturing in areas under MECQ can also finally restart. However, just like car dealers, only 50 percent of its workforce can work on site while the remaining half must work from home or off-site.
Of course, as with every other industry right now, car dealers in MECQ areas will likewise need to implement strict health measures to prevent the spread of COVID-19 inside the dealership premises. The same goes for automotive manufacturing plants, wherein strict health measures before entering the factory must be enforced.
For now, we are still unaware if automakers such as Toyota will restart vehicle production at its Sta. Rosa, Laguna manufacturing plant, or which automakers are planning to reopen in MECQ areas. We still have to wait for a statement from the automakers themselves for final confirmation.
With MECQ in place, the Philippine automotive industry can finally start its slow recovery. For the past two months, car dealers, car manufacturing plants–not to mention its local suppliers–were unable to operate in compliance with the government’s regulations under ECQ. As expected, the quarantine measures have dented not just the Philippine automotive industry, but the entire Philippine economy at large.
For Q1 2020, the Association of Vehicle Importers and Distributors (AVID)–an automotive alliance comprising of 20 member companies representing 26 automotive brands, recorded automotive sales of only 14,404 units equivalent to a 34.4% drop in the first quarter of the year.
AVID also says that based on government data, the Philippine automotive industry, directly and indirectly, employs about 408,000 people.