Finally, we get some sorely needed good news in the industry.
Last Friday, Autoitalia Philippines Enterprises, Inc. and Piaggio India held a ceremonial signing of a technical licensing agreement to assemble complete knocked-down (CKD) kits of the gas-powered Apé City and diesel-sipping Piaggio Apé Auto DX.
Held at the Manila Golf and Country Club, the ironing of the agreement means that Autoitalia “has been allowed to assemble CKD units in the Philippines for local distribution,” said Autohub Group general manager Miguelito Jose in an interview with Wheels. Two Apé models will be produced, the Ape City (gas) and Piaggio Auto DX (diesel), beginning in as early as this year or by the start of 2021. Aside from these, Autoitalia will continue to sell the Apé DAC, Apé LDX, and the four-wheel Piaggio Porter.
The aforementioned contract “paves the way for Piaggio three-wheeled vehicles be registered to the Board of Investments (BOI) under Executive Order (EO 156) or the Motor Vehicle Development Program (MVDP) to assemble, manufacture and distribute the same to the Philippine territory,” according to an Autoitalia release. These units will be in a (CKD) state of importation from Piaggio Vehicle Private Limited, Inc. in India.
According to Jose, the yearly production target for the facility located in Cabuyao, Laguna is 10,000 units. This is in keeping with the MVDP’s requirements, while lowering tariff for the India-sourced kits from 30 percent to only one percent. Autoitalia would be too happy to sell its yearly output to the domestic market which, shares the executive, moves around 20,000 units a year – 20 percent of which is cornered by Autoitalia. Among the MVDP requirements, too, is to source at least 40 percent of components locally – not necessarily from the Philippines but from the ASEAN region.
“The ultimate plan, other than local distribution, is to eventually cater to ASEAN markets, which can now can take advantage of tariff-free Piaggio Apé units within the AFTA (ASEAN Free Trade Area),” added Jose. “The Philippines will be the central hub for ASEAN. These member companies can now take advantage of zero tariff because, if you get from India, means 30 percent duty.”
Will there be pass-on savings to customers? “Yes, there will be a price advantage for consumers and dealers/retailers,” he promised, although the company is still in the process of mapping it out.
The most important thing to consider at the moment, he said, is that this represents a huge opportunity. “Piaggio could have chosen other countries like Laos and Vietnam, but it chose the Philippines,” Jose underscored. “We’ve been in the business since 2013, and we started planning for this direction two years ago. Of course, we had to gain their confidence that we can do local production while maintaining quality.” Piaggio, he continued, also sees the potential of the local market because our last-mile mode of transport has predominantly been the tricycle. The positive outlook for Piaggio also ties in with the state drive to modernize the country’s aging public transportation fleet. The advantages in the Piaggio Apé, stressed Jose, are undeniable. The vehicle is greener, safer, and more economical in the long run compared to traditional tricycles.
Present during the ceremonial signing were top executives from Piaggio India, Autoitalia, and BOI in the Philippines: Autohub president and CEO Willy Tee Ten, senior vice president and group general manager Jose, PVPL vice president for export Sudhanshu Agrawal, Piaggio Group country manager for export sales Sunil Singh, DTI Undersecretary and Chief of Staff Rowel Barba. BOI Governor Angelica Cayas, executive director of Industry Development Services Ma. Corazon Dischosa, director for Manufacturing Industries Service Evarise Cagatan, industry development group of Manufacturing Industries Service Lourdes Chan, and chief investments specialist of Manufacturing Industries Service Melania Dingayan.
The Cabuyao facility will be comprised of a 2,400-sqm assembly plant, 2,400-sqm parts manufacturing line, and a staging area 4,500 sqm large. While there is no figure yet on how many will be employed at the factory, Jose said Autoitalia will not be installing robotic equipment, meaning they will be “definitely be creating jobs.” He stressed, “That’s an intention of the program: to create jobs and support the economy.”