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Demand for motorcycles in RP rising steadily

MANILA, Philippines--Yamaha Motor Co. Ltd announced early this month the start of the construction of a P960-million motorcycle factory at the Lima Industrial Park in Batangas.

The Batangas project is a follow up to Yamaha Motor Philippines Inc.'s (YMPH) P550-million interim factory at the Laguna Technopark in Biñan, which last September started assembly operations for bikes with engine displacements of 105cc and 135cc.

This is in line with the company's efforts to cash in on the continually growing demand for motorcycles in the Philippines.

In a statement, Yamaha Motor said the new Batangas plant, which is expected to start operations in January 2009, will have an initial production capacity of 150,000 bikes yearly.

The factory, which will have a starting complement of 270 workers, covers a floor area of 44,000 square meters.

Upon completion, the Batangas facility would take over the assembly of motorcycles currently being done in Laguna.

Yamaha Motor said investing in the Batangas facility was an initiative under its three-year medium-term management plan for 2008 to 2010, which cited "further growth in sales and profitability" in Southeast Asia as one of the goals of its business strategy.

Also, the company cited the yearly growth of demand for motorcycles in the Philippines, which was "backed by a stable domestic economy."

Yamaha Motor said domestic demand grew 13 percent year-on-year to 700,000 units in 2007.

"Considering the present motorcycle ownership rate of approximately one unit for every 40 people, it is expected that demand will continue to grow in the future and reach a level of approximately one million by 2010," it added.

Yamaha Motor established operations in the Philippines in 1962 through a distributorship contract with Norkis Trading Co. Inc., which meant that sales as well as assembly was done through the latter.

"However, the prospect of growing demand in the market led to the establishment (in May 2007) of YMPH as a 100-percent Yamaha Motor-owned subsidiary with the capability to respond to market needs in a speedy and effective manner," the company said.

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