It is interesting to see how giant car manufacturers take different approaches regarding entering or staying out of the taxicab market in the Philippines. For this post, I’ll just consider the metered taxi cabs, and not the shuttles and vans registered under UV Express Services or GT Express (and the colorum ones).
We all know that a lot of taxis use the Toyota brand, and from time to time some Nissan, Hyundai and Kia. But in my experience, I have yet to see taxis using the Honda or Mitsubishi or Mazda brand in the Philippines. Do you also wonder why?
Toyota taxis are probably the most common to see plying our highways. From the old timer Corolla, Corona, to Vios, they even have Avanza. No Altis though or Camry or Innova as I think Toyota still sells these for private consumption. Hyundai Accent and Kia Pride or Rio taxis are also seen from time to time. We also have the classic Nissan Sentras.
On the other side, I haven’t ridden or seen any taxi cab that is a Honda City, Civic, Jazz or a Mitsubishi Lancer or Adventure. No Mazda 3s either (though I’d love to). So I take it to mean that these car manufacturers choose not to enter the taxi business lines.
As far as I know, the way it works is that taxi companies and operators enter into deals with the car dealers to buy bulk of their cars, to be transformed into their taxi fleets. So the presence of the car brand as taxi cabs (or the lack of it) is surely indicative of the car brands’ management decision. And likely included as a deliberate company strategy.
So why do other brands dominate the taxi cab business while others seemingly choose to stay out of it? I ask because to a mere observer like me, it is a big market that generates bulk sales, and as a company, I definitely want to have more sales. Based from 2009 revenues in the Top 25k Corporations in the Philippines (from CIBI), Toyota Motors Philippines is ranked top 20th in terms of revenue. Honda Motors is at 57th, Mitsubishi 44th, Nissan 603rd, Hyundai dealers 1000th++.
So given that brands who do not engage in the taxi business still generate healthy sales revenues, they surely have other sources where they get the sales from, to compensate their lack of presence in the taxi cab businesses. What are the other possible considerations anyway?
Again, as a consumer and observer who rides taxis every now and then, the first hand experience in riding the car gives me the impression of whether the car brand and design is durable, for heavy duty, affordable, spacious, sleek, beautiful inside, etc (though of course in my assessment I remove the add-ons done by the taxi company already). These things I get to see and experience, and I even get the opinions of the cab drivers, and in turn these will eventually help me decide what car brand to choose when I buy my own car. So this is a clear advantage for car brands with presence in the taxi business.
From my opinion, branding is also a crucial factor. Maybe, note just maybe, some car companies do not like their products to be branded as taxi-type cars. There is nothing wrong with it especially if taxis stand for durability, affordability, etc but this should be nonetheless be tied to the car manufacturer’s target market and overall branding strategy. If their target market is the middle class then perhaps there’s nothing wrong in allowing some products or so to be used as taxi fleets as well. But if the intention is to keep the image that their cars are for private use only (there are of course consumers who don’t want to buy car designs that are commonly used as cabs), then staying out of the taxi business line will prove to be a good move.
How about a hybrid of both, as Toyota, Hyundai, Nissan and Kia do it? Allot just a select line of car designs for both public and private use (likely the lower end ones) then keep the more high-end designs solely for private purchase.
As in life and applicable to business, to each his own. Whatever works. After all, not all competing companies are joining the bandwagon, unlike what we’ve seen in other industries where what others do will soon be imitated by the competition. Here in this post, it is clear that that is not always the case.
PS. I’m all for the durability and affordability, and if there’s flexibility that the car I want is not used for taxi cabs, I’ll definitely take it. But if none, same design but different color, plus some add-ons, will be fine as well.
PSS. I think in other countries there are Honda Taxi cabs. So I guess country / locations also matters.