SMC steers new vehicle for BMW distribution

San Miguel Corp. (SMC) and Asian Carmakers Corp. (ACC) are forming a new corporate vehicle for the distribution of BMW cars in the country, with the diversified conglomerate taking the driver’s seat with a 65 percent stake.

SMC told the local bourse yesterday it filed with the Securities and Exchange Commission documents for the incorporation of SMC Asia Car Distributors Corp.

The company said as the corporate vehicle, SMC Asia Car will engage in the importation, distribution and servicing of BMW vehicles in the Philippines.

SMC Asia Car will be 65 percent owned by SMC, while the remaining 35 percent will be taken by Palawan Governor and businessman Jose “Pepito” Alvarez.

SMC Asia Car will officially mark SMC’s entry into the car distribution business. SMC is one of the largest and most diversified conglomerates in the country with business interests in food, packaging, infrastructure, beer, liquor, fuel and oil, and power.

ACC, meanwhile, is a wholly owned

Filipino company under the Alvarez Group of Companies, with Alvarez as chairman emeritus.

The company boasts of the widest dealership network in the luxury vehicle segment with eight dealers, composed of Auto Allee BMW in Eton Centris, North EDSA, Autohaus BMW in Quezon City, Motor Ventures BMW in Alabang, Prestige Cars BMW in Makati, Premier Cars BMW in Pampanga, Autobahn BMW in Bacolod, Autowelt BMW in Cebu and Premium Motoren BMW in Cagayan de Oro.

Ramon Ang, SMC president and chief operating officer, in an earlier interview said the automotive business is a hard and very competitive industry to venture into, especially with a legislative proposal to impose higher excise tax on motor vehicles.

The proposed excise tax hike on automobiles under the government’s tax reform package will have the biggest impact on the luxury segment, in which BMW operates in.

BMW had an assembly operation in Bicutan in the 1990s but was closed a few years after. Officials earlier said the company is still not keen on reviving its assembly operations in the Philippines any time soon given the lack of economies of scale.

As of the first half this year, BMW Philippines sales declined two percent to 392 units from 400 units in the same period last year.

The company, however, is eyeing to register a double-digit increase in sales this year before take-up is seen slowing down in 2018 with the looming excise tax hike on automobiles.