FMC motorcycle project gets BOI incentives

Government is granting incentives to the P100.46-million motorcycle manufacturing project of Francisco Motor Corp. (FMC), following the successful conclusion of its negotiations with Qin Qi Motors of China.
A report from the Board of Investments (BOI) indicates that FMC’s project registration under the Motor Vehicle Development Plan (MVDP) was approved this week, entitling the company to various incentives.

Listed under category A of the MVDP covering two-wheeled vehicles, FMC will be able to import motorcycle parts and other raw materials under lower tariffs.

According to the BOI, FMC will be manufacturing motorcycles for Qin Qi under the Daye brand. The company will also be distributing the vehicles to the domestic market currently dominated by Japanese branded two-wheelers, Yamaha, Kawasaki and Honda.

After surrendering its Mazda market to Ford Motor Co., FMC decided to team up with the biggest motorcycle manufacturer in China for the assembly and distribution of motorcycles to take advantage of the rapid increase in the demand for such vehicles.

FMC’s move also marked the entry of Chinese motorcycle giants into the Philippine motorcycle market currently dominated by three leading manufacturers.

Government sources revealed that with FMC’s new partnership, Chinese motorcycles would soon dominate the market as top assemblers scamper for incentives under the MVDP to take advantage of the projected growth in the demand for motorcycles.

BOI said FMC is planning to assemble the motorcycles at its Las Piñas plant, branching out into the market niche that has so far defend all trends of slowing down.

FMC’s move came after it severed its partnership with Mazda Motors, a subsidiary of Ford Motor Co., following a disagreement over the assembly and marketing of Mazda pick-ups.

According to the BOI source, FMC’s entry into the motorcycles business with its Chinese partner has also sparked interest among other leading Chinese motorcycle assemblers.

The source said the BOI has received inquiries from another big motorcycle assembler in China, Chong Qing Motors of China.

Another company, Daelin of Korea has filed a separate application for incentives under the MVDP. Daelin, according to the source, will be undertaking the motorcycle assembly project with its Filipino partner, Remington Motors.

To qualify for incentives, the BOI source said the new motorcycle assemblers will be required to invest at least $2 million on parts manufacturing.

The source said Chinese-made motorcycles have begun penetrating the market in earnest. Imported as completely built-up (CBU) units, some brand new models are selling for as low as P16,000 compared to the average P75,000 for the Japanese models.

According to the source, government is projecting at least a 13-percent growth in motorcycle sales this year as consumers opt for the vehicle which is more affordable, fuel-efficient and cheaper to maintain.