Ayala Corp., the Philippines’ oldest conglomerate, plans to invest $150 million in automobile manufacturing, taking advantage of a global move toward green cars as it expands outside its core businesses of property and banking.
“We see a shift taking place in the automobile sector—the coming to an end of the combustion engine and the move to electronics as the main driver of cars,” Ayala Corp. chairman and chief executive officer Jaime Augusto Zobel de Ayala told Haslinda Amin in a Bloomberg Television interview on Friday.
Several car dealerships and an electronic-manufacturing subsidiary that supplies half of its output to automotive manufacturers provide Ayala an avenue to “overweight the sector that’s going through massive disruption,” he said.
The Manila-based group is among the latest in Asia seeking to tap the burgeoning market for zero-emission vehicles as countries including China, UK and France plan banning sales of fossil-fuel powered cars in a few years to battle pollution. Ayala acquired German autoparts supplier MT Misslbeck Technologies this year, while a venture with European motorcycle-maker KTM AG has started manufacturing for China and Southeast Asia, Zobel said.
Earlier this year, the company consolidated its assets in electronic manufacturing and vehicle dealership under unit AC Industrial Technology Holdings Inc.
Ayala, which this month sold $400 million in bonds with a fixed-for-life annual coupon of 5.125 percent to help fund investment, plans to participate in China’s Belt and Road initiative and partner with Chinese counterparts in vying for infrastructure projects, Zobel said.