MANILA, Philippines – The Board of Investments (BOI) has approved the application of KTM Asia Motorcycle Manufacturing Inc., a partnership between Ayala Corp. and Austria-based KTM AG, as a new participant in the country’s motor vehicle development program.
KTM Asia is set to invest P290.6 million for local assembly operations and parts manufacturing.
Commercial operations start this month with an initial 19 employees. The facility will be located inside Integrated Micro-Electronics Inc.’s assembly plant in Biñan, Laguna.
The project is expected to produce four motorcycle models with an initial yearly capacity of 10,000 units and expandable up to 20,000 units annually when fully operational.
KTM targets to sell around 3,000 to 5,000 units yearly for the domestic market while the rest will be exported 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,” Trade Undersecretary and BOI managing head Ceferino Rodolfo said.
“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,” he added.
KTM AG is the biggest motorcycle manufacturer in Europe with a 9.6 percent market share. It sold over 180,000 units with revenues exceeding one billion euros in 2015.
Rodolfo said the local motorcycle segment is one of the fastest growing sub-sectors of the automotive industry in the region, beating the downward trend in other countries.
“And the good news is, there’s still room for growth in the coming years,” he said, noting that with easy access to credit, sales potential for motorcycles continues to be promising.