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.
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.
The restructuring of the Motor Vehicle Development Program provides for the following:
The Comprehensive MVDP provides for the following:
Industry and Investments Building,
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