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    Philippines’ Ayala to spend up to $100m to launch self-driving cars by 2019

    Tan discusses his company’s plans in an interview with the Nikkei Asian Review on Aug. 23 in Manila.

    MANILA — Ayala Corp. is prepared to invest up to $100 million to kick-start its effort to make the Philippines a Southeast Asian hub for the manufacture of self-driving cars.

    That amount represents its 50% initial share in a joint venture planned with a foreign carmaker. The Philippine conglomerate is in talks with “more than three” companies, said Ayala unit AC Industrial Technology Holdings chief executive Arthur Tan in an interview with Nikkei Asian Review at the conglomerate’s headquarters Tuesday.

    AC Industrials manages Ayala’s interests in Isuzu, Honda, and Volkswagen car dealerships in the Philippines, a joint venture with Austrian motorcycle company KTM, and future projects in auto manufacturing.

    Tan declined to name the companies his company is negotiating with, saying it is bound by nondisclosure agreements. However, he said talks with Volkswagen that began in 2013 “have not stopped.”

    Tan said he hopes to wrap-up negotiations soon, and begin the project “in three years.” The venture is envisioned making autonomous cars.

    Ayala’s core businesses are in real estate, banking, telecommunications, water distribution and electronics manufacturing. In recent years, it has moved into new areas such as power generation, infrastructure, education and health care, as it looks to double its net profit versus 2015 levels to 50 billion pesos ($1.08 billion) by 2020.

    Ayala’s aim to build cars dovetails with the Philippine government’s plans to bolster the country’s manufacturing sector to create more jobs. Last year the government announced $600 million worth of perks for three auto manufacturers that turn out 200,000 cars of a particular model over a six-year period. Japanese carmakers Toyota and Mitsubishi has been qualified for the incentives.

    Tan, however, said he is not interested in making conventional cars, which are already being built in Thailand, Indonesia, and Malaysia.

    “We saw an opportunity where the automotive industry itself is being disrupted. The established manufacturing facilities are not set to produce these next-generation vehicles,” Tan said.

    Tan is also chief executive of Ayala unit Integrated Micro-Electronics, a global electronics manufacturer that gets half its revenue from automotive electronics, including cameras for autonomous cars.

    He said IMI’s technological expertise and Ayala car dealerships make the conglomerate a viable partner for an auto manufacturer looking to expand in Southeast Asia.

    Last week, IMI acquired 76% of German optical bonding and display solutions company, VIA optronics for 47.4 million euros ($53.7 million). Tan said display screens made by VIA could be used in cars, and added that the company is looking for more acquisitions to prepare the group for full-scale auto manufacturing.

    “Ayala, with an ASEAN footprint, has an opportunity to now leapfrog the current established players in the region and set us apart in being the partner of choice for (car) companies,” Tan said.