Homegrown automotive brand Motech Automotive plans to enter the Asean market in two years to expand its regional footprint following a recently inked partnership with the largest Japanese car service and retailer Autobacs Seven Co. Ltd.
In a news conference on Wednesday, Philippine auto-service shop chain Motech Automotive revealed the strategic business alliance with Japan-based auto-parts retailer and total-car life service business Autobacs Seven, saying it can grow its presence in the Philippines and enter other auto-manufacturing countries in Asean through the partnership.
According to a previously released statement, the Japanese firm had acquired 9.33 percent of the Magnificent 7 Automotive and Franchising company, the franchising firm that owns the Motech Automotive brand.
The ownership may increase in two years, which will entail another investment, said Eugene Naguiat, CEO and president of Magnificent 7 Automotive and Franchising Co. Inc.
With the partnership, Magnificent 7 can grow its company-owned Motech Autmotive stores to 11 by 2016, from the current six.
Investment per store will cost P7 million.
For the franchises in the Philippines, it plans to grow its current store count from 37 to 100 by 2020.
The projection is more ambitious for the Asean region, as it plans to put up some 400 stores in key Asean automotive markets in two years’ time.
“The combination of the two brands is geared to meet the various demands of consumers across the different segments of automotive after-warranty market of the different Asean countries. Our vision and goal is to open 500 Motech centers in the Asean, and become the leading automotive service center in the region,” Naguiat said in a statement.
“Autobacs is already in Asean but their stores are too big, and costs are too high. The Motech business model and operating procedure will be much more efficient, and that’s what we’re offering to the Asean market,” Naguiat said.
In expanding outside the Philippines, Magnificent 7 said it will do a thorough study of potential partners or master franchisors.
Naguiat said part of the partnership entails training of Motech employees on Japanese standards of car-service practices, as well as merchandise supply.
With the partnership, Autobacs Seven is expected to share its business knowledge and skills required for multiple store development and to supply its merchandise to Magnificent 7, according to a media statement by the Japanese firm.
Autobacs Seven is the worldwide master franchiser of Autobacs chain, the largest specialty automotive franchise chain in Asia.
Headquartered in Tokyo, the Autobacs Group operates a franchise chain of 611 retail stores, including 30 stores overseas, which offer a one-stop shopping experience for automotive parts and accessories, as well as installation services.
In the Asean region, the Autobacs Group operates three stores in Singapore, six in Thailand, four in Malaysia and one in Indonesia, since its opening in Singapore in 1995.
The alliance is timely, as Naguiat estimates the Asean automotive after-service market to be valued at $37.7 billion by 2025.