To open 123 PH stores by 2020
Magnificent7 Automotive & Franchising Co. Inc. (MAFCI) has tied up with a Japanese firm to acquire strategic know-how in expanding its stores in the Association of Southeast Asian Nations (Asean).
The automotive service firm operates under the brand Motech Automotive.
The homegrown Motech Group on Wednesday struck an alliance contract with Autobacs Seven, a leading automotive servicing firm in the Asean region. Autobacs Seven is headquartered in Tokyo, Japan.
Under the deal, MAFCI President and Chief Executive Officer Eugene Sergio Naguiat said in a briefing the partnership goal is for the company to expand its Motech stores to 500 by 2025 from 43 branches as of end-September 2015.
The stores will run under the Motech brand, of which 123 will be established in the Philippines by 2020 while 377 stores will be located across the Asean region.
The 123 stores in the Philippines will include five company-owned stores. The rest will be franchised branches.
“We’re still a long way to 500. In the Philippines, we look at 100 stores by 2020 – 123 to be exact. This is all in the Philippines,” Naguiat said.
“Company owned stores will reach 11 by 2020. These will be in Davao, Iloilo, Batangas, Pangasinan, among others. These will become the satellite points in the provinces,” he added.
A Motech store costs around P6 million to P7 million to build, Naguiat said, which means a P35-million investment for the five company-owned stores. At present, MAFCI operates 43 Motech stores – 11 company owned and 37 franchised branches.
To expand regionally, Naguiat said the group will likely tap a “major franchiser” which can be a company in each Asean country to grow the Motech’s footprint across the region.
He said the agreement also entails the training of Motech mechanics and workers in Japan by Autobacs Seven for a year or two. After the technology transfer, Motech intends to jumpstart the expansion in Asean.
“We’ll first start in taking the technologies from Japan. It will take one or two years before the mechanics graduate. By then, we can move forward to Malaysia and Indonesia, and finally the rest of the Asean,” Naguiat said.
He said Thailand is also a sizeable market, citing the output of 1 million cars a year in both Thailand and Malaysia.
“They are the biggest, having 1 million cars a year. The market there is much larger, it’s easier to look at. So those are the initial project areas,” Naguiat noted.
The Magnificent7 president said the Motech expansion is in line with the view that the Asean region will be an economic powerhouse by 2050, and the Asean automotive after-sales market is poised to hit $37.7 billion by 2025.
“The combination of the two brands is geared to meet the various demands of consumers across the different segments of the automotive after-warranty market in 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.
“This alliance allows us to have the synergy of Japanese branding and high quality service and parts, fused with our localized and personalized business model. This will be further developed to cater not only to the Philippines but also to other Asean countries. With our personalized services and Autobacs’ technological expertise, we will create a revolutionary change in the industry, especially in the quick service automotive segment,” he added.
Naguiat said with the deal came on the heels of Autobacs Seven’s acquisition of a minority stake in Magnificent7, the details of which he declined to disclose. It may reach up to 20 percent, depending on the progress of the partnership, he added.