Motorcycle manufacturing revs up Philippines’ economy

Asia’s motorcycle manufacturing sector has seen significant growth over the past 12 months. This is especially true for the Philippines, where the rapid development of the industry has seen the nation emerge as Asia’s epicentre for motorcycle manufacturing.

The Southeast Asia region has been the main beneficiary as Many motorcycle manufacturers have moved more production to developing countries to minimize costs. Today, you’ll be hard-pressed to find a major manufacturer that hasn’t set up a factory here.

The region is not only an ideal location for production, but also provides the perfect retail environment for manufacturers to conduct market tests of their new models.

Philippines motorcycle manufacturing

In the Philippines, numerous large motorcycle manufacturers such as Honda, Yamaha and KTM have recently established new production facilities or expanded existing ones.

This has had a major impact on the country’s economy, especially in the form of high-tax revenues as well as the thousands of jobs that these facilities provide.

Honda Motor Company (TYO: 7267), for example, produces the majority of its small-engine motorcycles in the Philippines. Some of these motorcycles are eventually sold in the domestic market, while a large number is also exported and sold on the global market. 

Honda’s competitor, Yamaha Corporation (TYO: 7951) is pursuing a similar strategy. Earlier this year, Yamaha opened a new manufacturing facility in Batangas, a town in the southern part of Luzon in the Philippines. This new factory is where the company produces its innovative new model, the Yamaha 155.

KTM’s aggressive expansion into the Asian market also plays a huge role in the meteoric rise in the country’s motorcycle manufacturing industry. The Austrian manufacturer has been producing a large number of its models, including the KTM 200, 250 and 390, in its production plant in Santa Rosa, Laguna, since 2017. 

Recently, KTM further expanded and enhanced its manufacturing facilities in the Philippines and started producing its KTM 790 models, including the KTM 790 Duke, 790 Duke Adventure and the 790 Adventure R, making them one of the first to produce large-engine motorcycles in the Philippines. 

This expansion by KTM played a major role in the 22% growth of the Philippines’ manufacturing sector this year despite the ongoing pandemic.

Given the increasing demand for small engine motorcycles both in the Philippines and in neighbouring Southeast Asian countries, it is very likely that further production facilities will be built here in the future.