The company is engaged in the manufacturing of parts and accessories for motor vehicle engines.
SEC documents show that of the new capitalization, P678 million has been subscribed and paid.
Bullish on the prospects of the local motor bikes sector, the Motorcycle Development Program Participants Association (MDPPA) estimates that industry sales will grow by 18 percent to 250,000 units this year. It also expects to sell one million units within the next five years.
The MDPPA said the government’s help would be essential to the growth of the Philippine motorcycle industry, which has lagged behind markets in China, Thailand, Indonesia and Malaysia in terms of unit sales.
Thailand sells an average of 1.5 million units a year, Indonesia (1.9 million units) and Malaysia (475,000 units).
The MDPPA has complained about the influx of Chinese motorcycle brands being dumped in the country and sold at prices substantially lower than the domestic price. China is seen as the biggest threat to the local motorcycle industry with the mainland’s market of 10 million units a year.
To protect them from undue competition, local assemblers have asked the government to maintain tariffs on imported bikes at 30 percent through 2010.
Maintaining the tariff protection levels would give assemblers more time to improve their operations before they face imports.
The MDPPA has also sought the reduction in the industry’s completely knocked down (CKD) imports to one percent from three percent in order to lower the cost of importing their assembly kits.
Apart from this, local assemblers have asked government to limit the entry of new market players, pointing out that the increase in number of competitors fighting for a small market would discourage investments in assembly and parts manufacturing in the country.
Existing players are already facing stiff competition from motorcycle imports, including the smuggled units whose share of the market has risen to 30 percent.
Local assemblers have blamed the Department of Trade and Industry for allowing Chinese motorcycle brands and second-hand units to penetrate the Philippine market because of slack registration requirements.
The industry is currently served by seven players led by Honda, Kawasaki, Yamaha and Suzuki.
Sales of motorcycles grew by 20 percent in the first quarter this year as consumers took advantage of the cheaper rates and affordable loans offered by local motorcycle assemblers.
A total of 58,000 units were sold in the first three months compared with only 48,000 units the previous level. Solo bikes accounted for 15 percent of the total units sold.
Last year, motorcycle sales declined by eight percent to 211,000 units from 230,000 in 2001.