Ayala revives bid to enter car mfg

By Richmond Mercurio

MANILA, Philippines - Conglomerate Ayala Corp. sees its long-delayed venture into car manufacturing finally pushing through as the group aims to make its planned production facility in the Philippines a manufacturing hub for the region.

“I am hoping that this current administration would be much more forward and long- term thinking in partnering with companies like us who are willing to take that step. I’m still very positive that we will be able to do it (within this administration). I feel that it is going to happen,” AC Industrial Technology Holdings Inc. president and chief executive officer Arthur Tan said.

“The previous administration, we tried to work very strongly to bring at that time Volkswagen. And yet we were not successful. So we are hoping that this administration would have a very much better and long term perspective,” Tan added.

Since Ayala secured the exclusive distributorship of Volkswagen in the Philippines in 2012, construction of a manufacturing facility in the country by the German automotive brand has been on the table.

“We’re pursuing that. It’s still open for discussion. They just have to deal with their own internal issues,” Tan said.

Tan noted, however, Volkswagen is not the sole brand which the Ayala Group is trying to partner with as it pursues its local vehicle manufacturing venture.

“We’re talking to everybody and not necessarily (European companies). We have so many brands now and everybody is actually paying attention to the Philippines,” he said.

“But our requirement is you cannot look at the Philippines and just try to see if we can supply the Philippine market. We want to be a gateway for ASEAN (Association of Southeast Asian Nations). We have people that are supplying cars in the country but are only looking at the country, and yet they decided to put their full scale production somewhere else for the rest of the world and rest of ASEAN. What we want is for the Philippines to be the ASEAN hub for whatever car we’re going to build,” Tan added.

Tan said such strategy of thinking outside domestic demand is what the Ayala Group has applied with its motorcycle manufacturing venture in partnership with Austria-based KTM AG, wherein 70 percent of the total production in its Laguna factory will be exported.

For Tan, finding the right partner and identifying the suitable supply chain will be the key challenges in the group’s planned car manufacturing venture.

But while Ayala remains a car importer rather than a manufacturer through Volkswagen Philippines, Tan said the company has its full support for the ongoing negotiations on the European Union and Philippines free trade agreement (EU-PH FTA).

“We’re very bullish on the idea that the Philippines will be able to sign this FTA with the EU which would be the second FTA the Philippines will sign,” he said, citing the Philippines-Japan Economic Partnership Agreement as the first.

“The incentive that would be attractive to me is a level playing field that the FTA that they’ve accepted from one country, they would accept on the EU country. I’m not asking for more, just one and the same,” Tan said.

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