Conglomerate Ayala Corp. seeks to expand its car dealership business with a bid to acquire local distributorship rights for Korean automotive brand Kia.
In a disclosure to the Philippine Stock Exchange yesterday, Ayala said a unit of wholly owned subsidiary AC Industrial Technology Holdings Inc. had received a notice from Kia Motors’ Asia regional headquarters saying that it deemed the Ayala group “the preferred bidder” for the Kia distributorship in the Philippines. Negotiations are expected to start soon.
“No definitive terms have been reached and we will make the appropriate disclosure of any agreement reached,” the conglomerate said.
For the Philippine market, Kia sells sedan cars such as Picanto, Rio 5-door and sports utility vehicles and mini vans such as Soul, Sportage and Sorento and Grand Carnival.
In 2016, Ayala consolidated its car dealership and industrial operations into AC Industrials, a wholly owned subsidiary that seeks to play a bigger role in manufacturing and contribute to the country’s rise into a Southeast Asian industrial hub.
To date, AC Industrials’ car dealership businesses include Honda, Isuzu and Volkswagen brands. AC Industrials also holds the existing and future assets of global electronics manufacturing service provider Integrated Micro-Electronics Inc.
AC Industrials holds distributorship interests such as the 13-percent stake in Honda Cars Philippines Inc., the 15-percent stake in Isuzu Philippines Corp. and a 100-percent interest in Automobile Central Enterprise Inc., the official Philippine importer and distributor of Volkswagen, and in Adventure Cycle Philippines Inc., the official motorcycle distributor of KTM in the Philippines.
Manufacturing operations of KTM AG, the group’s new motorcycle partnership under KTM Asia Motorcycle Manufacturing Inc., are also under AC Industrials.
The Ayala group has also been in discussions with some potential foreign partners for the setting up of car manufacturing operations in the country in the years ahead.