Setting up a car brand from scratch can be a daunting task. Aside from satisfying government and regulatory requirements, anyone planning to bring in a foreign brand will be faced with a number of difficult challenges along the way.

That is why most automotive brands prefer to partner with a local distributor. Filipinos who run the distributorship are presumed to know the ins and outs of setting up the company, dealing with government agencies, hiring the right people, establishing systems and processes, and networking with dealer principals, bank partners, and suppliers. All of these need to happen even before they launch the brand and start sales. 

But Omoda and Jaecoo Philippines is bucking the trend by going all-in as a direct subsidiary of Omoda Global. 

Also Read: Omoda to bring sister brand Jaecoo with it, to launch late 2023

Go big, or go home

Announcing its intended brand launch in the fourth quarter early this year, Omoda and Jaecoo Philippines has set itself up for the more difficult route as it plans to go the long haul with its presence in the Philippines. 

At the Philippine media press conference held at Omoda’s headquarters in Wuhu, China,  Xu Qingsong, CEO of Omoda and Jaecoo International, claimed that one of the criteria it considers when deciding how it enters a market is that the annual sales figure must hit 500,000. 

According to data from the Chamber of Automotive Manufacturers of the Philippines, the total number of cars and trucks the group’s members sold in the Philippines in 2022 was past 352,000. And the industry is showing a rising sales trend that suggests 2023 will be an even better year in terms of sales.

Makes more sense

Meanwhile, Omoda and Jaecoo Philippines Country Director Marco Chen revealed that more than half of Omoda’s current 15 international markets are direct subsidiaries of the parent company. 

The Philippine operation is being prepared as a subsidiary, complete with technical and budget support from Chery Holdings in China.

Another reason Chen cited why Omoda and Jaecoo prefer to enter the Philippine market as a subsidiary is the ease of sourcing and ordering spare parts. “As a subsidiary, ordering parts from the mother company is easier, " Chen added.

This reassurance is what the Omoda and Jaecoo Philippines setup is attempting to instill in Filipino car buyers’ consciousness. 

An ace up its sleeve

As a member of the Chery umbrella, Omoda and Jaecoo also benefit from the group’s extensive manufacturing and testing facilities and supply chain. It has an 86,000-square-meter facility that can churn out  700 to 800 units a day at up to 60 cars per minute. Moreover,  the group has exported more than 394,000 vehicles in the first half of 2023

From the pre-production design to production and aftersales, both new brands rely on established work processes and systems to create products that their target customers will appreciate. 

But, not all companies are this courageous when setting up their business. In the cutthroat automotive industry that the Philippines is developing into, brands need to learn from other’s shortcomings and innovate with fresh approaches to catch the attention of a fleeting crowd with many choices at their fingertips.