Ayala Corp. is close to finalizing the Kia distributorship deal in the Philippines, a deal that will enable the conglomerate to expand its automotive portfolio, a top executive said over the weekend.
AC Industrial Technology Holdings Inc., a wholly-owned unit of Ayala Corp., said it was now in the last stage of negotiations for the deal which was expected to be completed in the next quarter.
“We are now in the last stages of the negotiations. Within the next quarter, hopefully we will be able to finalize,” AC Industrial president Arthur Tan said in an interview at the sidelines of the annual stockholders’ meeting of Ayala Corp.
AC Industrials plans to take over the distribution of the Kia brand in the Philippines.
Tan said the plan would initially build the Kia brand. “Part of it is brand building first because the brand is a bit weak. So we have to work on that,” Tan said.
Tan said AC Industrial’s core automotive business would remain Honda and Isuzu.
“Kia approached us and we feel we have the capability of developing the brand to the market and size of the market that they can serve. That is the reason why we are partnering with them. But clearly our core businesses remains Honda and Isuzu,” Tan said.
Ayala Corp. said in February it received a notice from Kia Motors’ Asia regional headquarters that it was being considered as a “preferred bidder to start negotiations.”
Kia cars in the Philippines are currently assembled and distributed by Columbian Autocar Corp.
AC Industrials actively pursued investments over the past couple of years as a part of a strategy to assemble a portfolio of businesses that develop, enable, manufacture and commercialize automotive and other industrial technologies.
It acquired a 94.9-percent stake in German automotive supplier MT Misslbeck Technologies GmbH in June 2017.
MT, which traces its roots to a workshop established in 1869, has production plants in Ingolstadt, Germany. MT designs and creates models of entire cars or parts of a car, develops, designs and manufactures injection molds for metal and plastic car parts and produces automotive plastic parts for prototyping and serial production.
AC Industrials also signed a joint venture partnership with European’s leading motorcycle producer KTM AG in 2016 to manufacture motorcycles for the Philippines and for export to China and Southeast Asian countries.