Piaggio to Start Assembly in the Philippines

Autoitalia Philippines Enterprises, Inc., the exclusive distributor of Piaggio in the Philippines has taken the next step, and has entered into a technical licensing agreement with Piaggio to manufacture and assemble its vehicles not just for the Philippine market, but for export to other ASEAN countries as well.

The deal was formalized between Autoitalia Philippines Enterprises, Inc. (APE) and Piaggio with the ceremonial signing of the technical licensing agreement of CKD (Complete-Knock-Down) Kit Assembly.

Autoitalia will import CKD kits from Piaggio Vehicle Private Limited (PVPL), Inc. in India, and will assemble them at their assembly plant in Cabuyao, Laguna. The finished three-wheeled vehicles will then be sold not just locally, but to ASEAN countries such as Laos and Cambodia.

With that, plans are in place to enroll the Piaggio APE three-wheeler as part of the Board of Investments (BOI)’s Motor Vehicle Development Program (MVDP) or Executive Order 156.

Autoitalia and Piaggio is targeting to localize at least 40 percent of the CKD components, or at least source it from other ASEAN countries. With that in place, it will allow the joint-venture to export its three-wheeled vehicles from the Philippines to other ASEAN countries without duties as part of the ASEAN Free Trade Agreement or AFTA.

Moreover, the signing of the technical licensing agreement gives Autoitalia the privilege to do both domestic and export sales. It also opens the door for Piaggio to infuse capital into the joint-venture which may give them partial ownership in the future.

But as a part of the Autohub Group of Companies, Autoitalia says its operations will remain geared to satisfy Philippine requirements first.

Currently, Autoitalia has dealers located in Tagaytay, Cavite, Pampanga, Dumaguete, Cebu, Bohol, Davao, Cagayan de Oro, and Zamboanga. They will also open in more locations nationwide.