The paperwork has finally been signed, settling the fate -or rather the future- of the Kia brand in the Philippines
In a company disclosure released today to the Philippine Stock Exchange, Ayala Corporation (through their AC Industrials subsidiary) has signed a distributorship agreement with Kia Motors Corporation (KMC) to become the official distributor of Kia's automobiles in the country. The distributorship agreement means that AC Industrials will take over from the brand's custodians: Columbian Autocar Corporation (CAC).
But the current distributors will not be entirely out of the picture, as AC Industrials stated that the new distributorship will be a joint venture with Columbian with Ayala as the majority shareholder. AC Industrials did not clarify the percentage yet.
In 2017, Kia's annual sales in the Philippines dropped significantly to 5,186 units; a 29% decline from 2016. The drop in sales is a stark contrast to the industry's strong growth in 2017.
In the statement, AC Industrials says they seek to re-establish the brand in the country via the new joint venture. They also stated that they are in a “comprehensive transition” period and that they will relaunch the brand in January 2019.
The acquisition of the Philippine distributorship Kia by Ayala Corporation under AC Industrials expands their portfolio in the automotive industry, with shares in automakers such as Isuzu Philippines Corporation (15%) and Honda Cars Philippines (13%), as well as 20 dealerships (11 Honda, 9 Isuzu) nationwide. Ayala is also the official distributor for the Volkswgen brand in the Philippines under ACEI as well as motorcycle brand KTM. Through IMI, Ayala also assembles some KTM models in the Philippines.