KTM Asia Gets BOI Greenlight to Export Locally-Made KTM AG Motorcycles

The Board of Investments (BOI) recently approved the KTM Asia Motorcycle Manufacturing Incorporated’s application into the Motor Vehicle Development Program (MVDP) of the government. With the approval, KTM Asia gains the ability to invest P290.6 million in the country for the production of KTM motorcycles for local and export consumption.

KTM Asia, a partnership between Ayala Corp. and Austria-based recreational motorcycle manufacturer KTM AG, chose the Philippines as its Southeast Asian hub. Operations are scheduled to start this month at KTM Asia’s newly built assembly plant inside the Integrated Micro-Electronics, Inc.’s (IMI) facility in Biñan, Laguna. Of the amount, P114.17 million will be spent on assembly while P176.46 million will be for parts manufacturing. The assembly plant kicks off its operations with a 19-person workforce.

KTM Asia expects to produce 10,000 units of four motorcycle models per year during the project’s early phase. Around 3,000 to 5,000 of the total output is meant for the local market, while the rest is for export to neighboring Asian countries such as Cambodia, China, Thailand and Vietnam. When fully operational, output will be increased up to 20,000 annually.

A global brand

“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,” Trade Undersecretary and BOI managing head Ceferino Rodolfo said.

“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,” he added.

KTM AG is the biggest motorcycle manufacturer in Europe, with a 9.6 percent market share across the continent. The company sold over 180,000 units in 2015, with revenues exceeding €1 billion that year.

The growing automotive sub-sector

According to Rodolfo, the local motorcycle segment is one of the fastest growing sub-sectors of the automotive industry in the region, eclipsing the downward trend in other countries. Currently, Japanese brands such as Honda, Kawasaki, Suzuki and Yamaha dominate the market with some Chinese brands starting to trickle in. With the introduction of KTM Asia, the Philippines is poised to make a big splash in the region’s motorcycle market.

“And the good news is, there’s still room for growth in the coming years,” Rodolfo said, noting that easy credit access renders the sales potential for motorcycles very promising.

The Austria-based motorcycle manufacturer is a subsidiary of CROSS Industries AG and India-based Bajaj Auto Limited.