BOI okays Ayala’s KTM Asia’s motorcycle production hub project

KTM Asia Motorcycle Manufacturing, Inc., a joint venture between the Ayala Group and Austrias’ KTM, has been approved by the Board of Investments (BOI) as the latest local manufacturer of high-end motorcycles that will cater to the domestic market and export to China and other Association of Southeast Asian Nations (ASEAN).

In a statement, the BOI said that KTM was now a participant under Classification III (Motorcycle) of the Motor Vehicle Development Program.

To transform the Philippines as its production hub for southeast Asia, KTM Asia is investing a total of R290.6 million of which R114.17 million will be used for assembly operations and R176.46 million for parts manufacturing.

KTM Asia will start commercial operations this month (January 2017) with initial personnel of 19 at its assembly plant inside Integrated Micro-Electronics, Inc., another Ayala subsidiary, located at Building I, North Science Avenue in Binan, Laguna.

The company has committed to produce four motorcycle models with an initial yearly capacity of 10,000 units, expandable up to 20,000 units annually when fully operational. KTM plans to sell around 3,000 to 5,000 units yearly to the domestic market and the rest for export to China, Thailand, Vietnam and Cambodia.

“With the Philippines positioned as the Southeast Asian hub for KTM, it is poised to boost its export capacity to address the rising demand among motorcycle enthusiasts in the region and nearby countries like China,” said Trade Undersecretary and BOI Managing Head Ceferino Rodolfo.

“KTM is a global brand. Its decision to venture and target the domestic market will further intensify healthy competition with the already established brands from Japan and China, thus providing more brand options for local consumers.”

Rodolfo said that the local motorcycle segment is one of the fastest growing sub-sectors of the automotive industry in the region, beating the downward trend experienced in other countries.

“And the good news is, there’s still room for growth in the coming years,” he said. KTM AG is the biggest European motorcycle manufacturer with a 9.6 percent market share across Europe. In 2015, it sold over 180,000 units with revenues exceeding 1 billion euros. It is an Austrian motorcycle manufacturer owned by CROSS Industries AG and India-based Bajaj Auto Limited.