External Factors (Kawasaki Heavy Industries)

Political Factors

Restructured Motor Vehicle Development Program (EO 156)

The restructuring of the Motor Vehicle Development Program provides for the following:

 Ban the importation of all types of used motor vehicles and parts and

components, except those that may be allowed under certain conditions

 Restructure the Most Favored Nation (MFN) tariff rates for motor vehicles and

their raw materials and parts and components at such rates that will encourage

the development of the industry

 Restructure the current excise tax system for motor vehicles with the end view of

creating a simple, fair and stable tax structure

 Continue the application of AICO scheme as may be adopted by ASEAN

consisted with the implementation of the ASEAN-CEPT

 Grant incentives to assemblers and parts and components makers for the export

of CBUs and parts and components

Comprehensive Motor Vehicle Development Program (EO 877-A)

The Comprehensive MVDP provides for the following:

 Creates a Motor Vehicle Industry Development Council to oversee, coordinate

and align all government policies and programs, rules and regulations, related to

the motor vehicle industry.

 Increases the level of progress achieved by EO 156 through the enhancement of

the existing motor vehicle industry policy framework

 Strengthens the used vehicle importation prohibition under EO 156

 Provides for the restructuring of (1) tariff rates to be comparable to neighboring

countries with similar motor vehicle development programs; and (2) excise

taxation system for motor vehicles to be fair, transparent, and stable

 Provides for granting of export incentives and support measures to encourage

greater participation, diversification of exports, and capacity utilization of parts

manufacturing and auto-support industries.

Economic Factors

The Filipinos nowadays are finding ways for a better but affordable form of

transportation. The majority of the Filipinos are not able to afford new cars not even

second hand ones. This is when motorcycles enter the scene.

Motorcycles have been a success due to the affinity of the Filipinos to using it. Not only

is it for personal use, but is also seen as a business opportunity and have a potential on

manufacturing and sales in the country.

Compared to other South East Asian countries, the Philippine market is not yet

saturated, though it is evident that Filipino families and individuals see motorcycles as

an efficient and easy-maintained mode of transportation, making sales in the country

promising.

Consumers find motorcycles affordable at a reasonable price, making Bike Enthusiasts

and and those engaged in livelihood businesses as their target market. Local

companies have also established technical licensing agreements with foreign brands to

facilitate localization of inputs and technology transfer.

Most of the competitors in the Motorcycle industry are the Japanese companies like

Honda, Yamaha, and Suzuki. Taiwanese like Kymco and other Chinese brands entered

the market as well. Western motorcycle companies like Ducati, Harley-Davidson, Indian

Motors, Moto Guzzi, and BMW are more engaged on the high class populace.
Social Factors

The Motorcycle culture in the Philippines entered the scene during the late 40’s and

50’s. Most of them are remnants of the motorcycles left behind by the Americans after

end of World War II.

Nowadays, motorcycles are bought mostly for one reason: Affordability. Most of the

Filipinos are already technologically inclined due to the popularization of social media

and online stores. The Filipinos (mostly, millennials) are into the trend of “online

shopping” and “Cash-on-Delivery” business. But of course, the delivery cost would be

affected. This is where the reliability of motorcycles come in. Motorcycles can go

through traffic with ease and a better form of delivery service for couriers on a budget.

Because of this, the motorcycle sales in the Philippines grew to 18 per cent as of 2017.

The younger generation also have an affinity for personalizing their motorcycles used

for both leisure and transportation. Other people even tried to recreate and once again,

popularize the Café Racer and Biker culture which is prominent during the 50’s

Motorcycles are on high demand in the rural areas of the Philippines. Due to its

reliability and cost efficient maintenance.

Technological Factors

Motorcycle manufacturers follow the trend of applying new technological features on

their products like “Anti-locking Break System” or ABS. Companies also use LED lights

for better vision during night rides. Electric starters are also a staple.

These technological features are needed to keep up with the competitors and to appeal

to consumers as well.

Environmental Factors

Chapter 2, Article 1, of the Clean Air Act states that:

“Section 13. Emission Charge System.- The Department, in case of industrial

dischargers, and the Department of Transportation and Communication (DOTC), in

case of motor vehicle dischargers, shall, based on environmental techniques, design,

impose on and collect regular emission fees from said dischargers as part of the

emission permitting system or vehicle registration renewal system, as the case may be.

The system shall encourage the industries and motor vehicles to abate, reduce, or

prevent pollution. The basis of the fees include, but is not limited to, the volume and

toxicity of any emitted pollutant. Industries, which shall install pollution control devices

or retrofit their existing facilities with mechanisms that reduce pollution shall be entitled

to tax incentives such as but not limited total credits and/or accelerated depreciation

deductions.”
“Section. 16. Permits.- Consistent with the provisions of this Act, the Department shall

have the authority to issue permits as it may determine necessary for the prevention

and abatement of air pollution.

Said permits shall cover emission limitations for the regulated air pollutants to help

attain and maintain the ambient air quality standards. These permits shall serve as

management tools for the LGUs in the development of their action plan.

Section. 17. Emission Quotas.- The Department may allow each regional industrial

center that is designated as special airshed to allocate emission quotas to pollution

sources within its jurisdiction that qualify under an environmental impact assessment

system programmatic compliance program pursuant to the implementing rules and

regulations of Presidential Decree No. 1586.”

Legal Factors