Japanese damaged-car dealer Tau opens service garage in Philippines

03, Sep. 2019

MANILA, NNA - Tau Corp., a Japanese company dealing in accident-damaged cars, has opened a service garage center in the Philippines where demand for auto repairs and maintenance is expected to grow, with drivers looking to prolong ownership of their motor vehicles.

A ceremony was held on Friday to inaugurate the facility in Calamba, Laguna Province, as purportedly the first one-stop Japanese repair shop for damaged cars in the Philippines. Equipped with Japanese-style auto repair technologies, the plant is capable of repairing 70 motor vehicles a month.

“The custom of repairing cars and using them for a long period of time has yet to be established in the Philippines,” Tau Senior Executive Officer Masanori Okumoto told the ceremony. “We can anticipate high demand for that.” The new business is targeted at a broad customer base including the middle class among local residents, for whom new cars are not quite affordable, as well as foreigners.

In January, Tau set up a subsidiary in the Philippines to provide sheet metal making and maintenance services. The unit, Tau Body Works Philippines Corp., is capitalized at $200,000, 99 percent paid by Tau. The new plant started operation in June.

The new plant repairs only partially damaged cars by using Japanese body repair and paint technologies. It has a staff of 11, including four Japanese technical advisers, and aims to establish a system for cultivating technical talent and help create jobs.

According to Tau’s research, completely damaged cars account for about 7 percent of accident-damaged cars in the Philippines. Tau says it sees a business opportunity in repairing partially damaged cars, which would not be taken care of by insurance companies. The car repair subsidiary aims for revenue of 100 million yen ($942,000) in the year to September 2020, and 250 million yen in the following year.

The subsidiary is seeking to expand its repair business to 35 directly owned and franchised shops in the next five years, and 100 shops in 10 years.

There are no standardized prices for auto repairs in the Philippines and it is not unusual if repair prices differ by twice as much. By putting the new plant on the right track, Tau hopes to help standardize auto repair prices in the Philippines.

“If auto repair prices become more transparent and the time required for auto repairs is reduced by Japanese technologies, it will boost the value of used cars,” said an official at Tokio Marine Malayan Insurance Co., which provides Tau with accident-damaged cars. “It is also quite advantageous to non-life insurance companies.”

Tau has long been doing business in the Philippines, setting up a branch there in 1995 to buy and re-sell accident-damaged cars after repairs. It procures damaged cars from 23 nonlife insurance companies and resells them in the country after repairing them. It procures about 150 cars every month.