AC Industrial Technology Holdings Inc., or AC Industrials, is finalizing 12 supplier agreements to boost the company’s motorcycle manufacturing venture, and may bring in a foreign engine manufacturer in preparation for its operations in the first quarter of 2017.
AC Industrials president and chief executive officer Arthur Tan said in a briefing the company was seriously considering building the engine component of the motorcycle it would manufacture and distribute to the Chinese market.
“The suppliers have to be world-class. That’s why we are working with them to improve their technology to build parts that are not only quality but will last for as much as 50 years. For the engine part, we see us acquiring or buying out a foreign manufacturer and bring it here,” he said.
AC Industrials is formerly Ayala Automotive Holdings Inc., the motor vehicle investment unit of conglomerate Ayala Corp.
Tan said discussions with KTM AG to provide the engine were ongoing, while KTM Asia Motorcycle Manufacturing, the joint venture company, will source engine from India or Europe.
Tan said motorcycle manufacturing was one of the many projects the company firm had lined. The Ayala Group consolidated its industrial assets into one portfolio capable of manufacturing world-class products, increasing local employment and setting a new bar for the Philippine manufacturing industry.
It recently teamed up with Austrian motorcycle manufacturer KTM AG to build 200cc to 400cc motorcycle units in the Philippines.
The company is set to manufacture 20,000 units in 2017 with about 70 percent of the output to be exported to China and 30 percent for domestic consumption.
“We want to prove that the Philippines can be a hub not only for the Asean but also for the world. That we can provide competitively a complete product designed, built and manufactured here in the Philippines and be competitive on a global basis. That’s the ultimate goal,” said Tan.
He said motorcycle manufacturing was a preparation for its goal of producing four-wheeled vehicles in the immediate future.
The company plans to bring in a foreign brand to speed up the process and is looking at an incentives scheme that promotes research and development.
“That’s why CARS (Comprehensive Automotive Resurgence Strategy) is not for us,” Tan said.
AC Industrials includes Ayala automotive group with stakes in Honda Philippines Inc., Isuzu Philippines Corp., Volkwagen Philippines and the partnership with KTM, and semiconductor manufacturer Integrated Micro-Electronics Inc.
Ayala, one of the largest conglomerates in the Philippines, has spent over half a trillion pesos for capital expenditures in the last five years with some P1.7 billion taxes paid to the government from 2011 to 2015.