Motorcycle

Initially based upon the investments of Japanese manufacturing corporations, the Philippine motorcycle assembly and production industry has developed rapidly with the participation of more local companies carrying technical licensing agreements with foreign brands. This development of the motorcycle industry has come from the great demand for motorcycles in the local market and the government’s policy of promoting and attracting foreign investment.

From the four pioneer members, participation has increased to twenty eight companies, including Chinese, Taiwanese, Thai, Malaysian and Indian brands. Nevertheless, Japanese brands, which have vastly invested in the country, continue to hold the dominant market position with 80% of market share.

01

About Motorcycle

The motorcycle sector has potential to expand manufacturing and sales operations in the Philippines due to the affinity of the Filipinos with motorcycle usage. From leisure and personal use to business needs, the motorcycle is a viable means of transport in urban and rural areas.

Compared to other Southeast Asian markets, the Philippine market is not yet saturated, providing many investment opportunities. The growing Filipino middle class sees motorcycles as efficient and cost-effective for both personal and business needs. With easy access to credit, sales potential in the country is promising.

Consumers are able to buy motorcycles at reasonable prices, with many investors specializing in semi-knocked down units. Local companies have also established technical licensing agreements with foreign brands to facilitate localization of inputs and technology transfer. At present, Japanese brands such as Honda, Kawasaki, Suzuki, Yamaha and Taiwanese brand Kymco conduct their operations in the country. Chinese brands are also gaining prominence among motorcycle users.

Development programs such as the Comprehensive Motor Vehicle Development Program have been established to promote investments, technology transfer, and industrial upgrading. Twenty eight local and foreign companies have availed of the incentives in this program through the assistance of BOI. At the same time, the Philippine Economic Zone Authority (PEZA) also provides fiscal and non-fiscal incentives, including income tax holidays from 4 to 8 years, tax and duty exemptions.

02

Facts and Figures

  • Major players: Honda, Kawasaki, Suzuki, Yamaha, Kymco
  • Products: Scooters, underbone, mopeds
  • 5000+ direct employees, 30,000+ indirect employees
  • PHP 2.2 Billion in revenue for 2012
  • PHP 3.4 Billion in Paid-Up Capital by major companies in 2011
  • 95% of sales are Complete Knock Down (CKD) parts and components
  • From 756,228 registered motorcycles in 2009 to 1,140,019 registered motorcycles in 2013.

03

Programs

Restructured Motor Vehicle Development Program (EO 156)

The restructuring of the Motor Vehicle Development Program provides for the following:

  • Ban the importation of all types of used motor vehicles and parts and components, except those that may be allowed under certain conditions
  • Restructure the Most Favored Nation (MFN) tariff rates for motor vehicles and their raw materials and parts and components at such rates that will encourage the development of the industry
  • Restructure the current excise tax system for motor vehicles with the end view of creating a simple, fair and stable tax structure
  • Continue the application of AICO scheme as may be adopted by ASEAN consisted with the implementation of the ASEAN-CEPT
  • Grant incentives to assemblers and parts and components makers for the export of CBUs and parts and components

Comprehensive Motor Vehicle Development Program (EO 877-A)

The Comprehensive MVDP provides for the following:

  • Creates a Motor Vehicle Industry Development Council to oversee, coordinate and align all government policies and programs, rules and regulations, related to the motor vehicle industry.
  • Increases the level of progress achieved by EO 156 through the enhancement of the existing motor vehicle industry policy framework
  • Strengthens the used vehicle importation prohibition under EO 156
  • Provides for the restructuring of (1) tariff rates to be comparable to neighboring countries with similar motor vehicle development programs; and (2) excise taxation system for motor vehicles to be fair, transparent, and stable
  • Provides for granting of export incentives and support measures to encourage greater participation, diversification of exports, and capacity utilization of parts manufacturing and auto-support industries

04

Champions

Motorcycle Development Program Participants Association, Inc. (MDPPA)

Mr. Rodel I. Pablo
President

Unit 302, Jollibee Center,

San Miguel Avenue, Ortigas Center, Pasig City

Tel. No.: (632) 401-9136

Telefax: (632) 470-6187

Email Address: sec.gen@mdppa-inc.org

Website: http://www.mdppa-inc.org/

Board of Investments (BOI)

Dir. Corazon Halili-Dichosa
Sectoral Champion

Industry and Investments Building,

385 Senator Gil Puyat Ave,

Makati City Philippines

Tel. No.: (632) 896-9239

Email: MCHDichosa@boi.gov.ph