Photo caption: AC Industrials’ IMI is shifting to higher-revenue systems and infrastructure such as electric vehicles and IOT

Performance Highlights

Outlook and Strategy

Many of AC Industrials’ key markets began to recover in 2021, but challenges such as material shortages and supply chain issues lingered, while the emergence of new COVID-19 variants added a new layer of uncertainty.

After a sharp rebound in the latter half of 2020 and early 2021, the global automotive industry experienced several supply-related headwinds. Car manufacturers grappled with the global semiconductor shortage, which limited output and forced rebalancing of production towards higher-end models and electric vehicles. 67 million automobiles were sold worldwide in 2021 — a 4.5% increase over the previous year, though still below pre-pandemic volumes.

Despite the imposition of Safeguard Duties for a significant part of the year, and restrictions on mobility which followed spikes in COVID-19 cases in March and August, the Philippine automotive market grew significantly in 2021. A total of 293,369 vehicles were sold — 18% more than in 2020. The industry is anticipated to grow up to 10% annually over the next few years and return to pre-pandemic levels by 2024.

While COVID-19 is expected to continue impacting AC Industrials’ operations throughout 2022, governments have become less willing to impose strict lockdowns and mobility restrictions, while increased vaccination rates have allowed for a gradual return to normalcy. Supported by these improved circumstances, the global EMS sector is expected to grow at a CAGR of 3.9% until 2027, while the global automotive industry is projected to grow by 4.5% annually over the same period, driven in part by increased proliferation of electric vehicles. Nevertheless, the challenges faced by the group over the past year, such as material and supply chain issues, will remain in the medium term, alongside the risk of the emergence of more disruptive strains of the virus.

Larger scale operations

Strengthen and optimize Ayala’s at-scale operations in electronics manufacturing and automotive distribution and retail

New growth operations

Scale up recently-acquired businesses that boost and complement the larger-scale operating units

High-tech investments

Provide financial and strategic support to unlock the potential of our investments in high potential technologies


Social and Relationship

Operations that adhere to Ayala’s standards of sustainability and good governance and good, lasting relationships with partners and customers


Over 16,000 employees and executives who deliver operational excellence, customer satisfaction, and value-adding technical expertise


38 manufacturing and engineering sites around the world with over 130 surface-mount technology production lines and 432,000 square meters of manufacturing space

Majority stake in the KTM production plant in Laguna and management of 124 dealerships nationwide across five automotive and two motorcycle brands


Emerging suite of proprietary technologies and intellectual property for the benefit of our customers and partners


Cash flow and credit lines to support business operations and capture of growth opportunities

How We Create Value

Portfolio Management

Actively-managed portfolio to drive high impact synergy opportunities across the group.

Management that can provide a broad range of corporate functions such as strategic planning, governance, resource allocation, and financial management.

Global Manufacturing Services

Delivery of full manufacturing solutions to customers, partners, and own portfolio of companies.

Emerging Technologies Development

Acquisition and commercialization of key technologies to enhance and protect competitive position.

Vehicle Distribution and Retail

Partnerships with multiple OEM brands to competitively source and distribute a broad, complementary, and integrated selection of vehicles for a wide range of Philippine automotive customers.

The Maxus Alabang dealership was inaugurated in February 2021.

The Value We Create


2021 Achievements

2021 Financial Performance

2022 Priorities

Larger Scale Operations

IMI was the 19th-largest EMS provider globally in terms of revenue, uptwo places from its 2020 ranking.

AC Motors’ Honda and Isuzu dealerships remained leaders within their brands’ networks.

Volkswagen successfully launched the T-Cross subcompact SUV and the Multivan Kombi.

AC Industrials grew its topline significantly in 2021, but lingering supply chain challenges and COVID-related restrictions continued to weigh on profitability, with the group incurring a combined net loss of ₱1.3 billion.

IMI’s total revenues grew 15% due to recoveries in most market segments, with core business revenues increasing 16% to US$1 billion. Rising material costs due to global supply chain issues drove IMI to incur a net loss of US$10.6 million in 2021, wider than its US$3.5 million loss in the previous year.

AC Motors recorded a net loss of P397 million –61% better than the previous year.

Volkswagen sold 441 units in 2021, a 149% increase over 2020.

IMI will shift its focus to higher-revenue box build systems and infrastructure such as electric vehicle, power module, IOT and camera components, reducing its dependence on low margin programs.

AC Motors will continue to optimize its facilities and physical assets, converting sales and service outlets into multi-brand facilities where possible to improve profitability and resource utilization.

Volkswagen will expand and revitalize its dealer network, while growing sales of its current lineup.

New growth operations

STI continues to improve business wins and increase its exposure in the medical industry.

Kia introduced the new Sorento at the launch of the brand’s new global corporate identity in November.

Models from Husqvarna are now manufactured at KTM Asia Motorcycle Manufacturing, Inc. (KAMMI)’s Laguna plant; KTM AG increased its stake in KAMMI to 40% from 34%.

Maxus launched two models in 2021 – the D60 compact SUV and D90 midsize SUV.

Kia retail sales grew 76%, with 3,748 units sold.

KAMMI manufactured over 12,000 units, a 69%increase over 2020.

Maxus recorded 91% sales growth, with 235 units sold.

Adventure Cycle Philippines, Inc. (ACPI), the distributor of KTM and Husqvarna motorcycles, recorded a 52% increase in unit sales vs. 2020.

STI will continue to rationalize its headcount and operations and build up its sales pipeline to expedite profitability.

Kia will expand and strengthen its dealer network throughout 2022 and launch new models in key and emerging segments as it continues its pursuit of its goal of becoming one of the top brands in the Philippines.

With the factory expansion completed, KAMMI will start local production of new KTM models (new generation RC 200 and RC 390, 890 Duke R, KTM Enduro) and assembly of the KTM engine.

ACPI will continue strengthening its dealernetwork and improve aftersales efficiency.

Maxus will continue its brand building efforts while maximizing the potential of its current vehicle line-up.

High-tech investments

MT-C-CON continued to improve synergies with VIA; its sales pipeline has improved significantly, with a large portion of its revenues for 2022 already secured.

Merlin Solar’s rationalization of facilities continued, and investments in its next-generation grids were initiated.

VIA Optronics is expanding its capacity to serve a major player in the electric vehicle space, and has made strategic investments to augment its suite of integrated solutions.

IMI’s subsidiaries posted combined revenues of US$296 million, a 10% improvement over 2020.

Merlin and MT-C-CON reduced their combined net loss by 29%.

A recovering German automotive industry allowed MT-C-CON to grow revenues by 49%, with all business units posting strong performance.

Merlin Solar almost doubled its 2020 revenue to US$10.5 million, driven by its transport and mobile business units.

MT-C-CON will focus on its core businesses and modernize its facilities. It will continue optimization of its manpower and production sites to speed up its return to profitability.

Merlin Solar is focused on further driving sales growth and maintaining a healthy revenue pipeline. Transitioning to the new grid technology to further improve cost and increase profitability is a priority.

VIA Optronics will make further investments as it scales up production for a major automotive customer.

Volkswagen’s new T-Cross, with its performance, safety, and comfort features, is a compelling entry in the subcompact SUV segment

AC Motors

The automobile group increased sales across its Honda, Isuzu, Volkswagen, Kia, and Maxus brands by 30 percent, outpacing industry growth of 18 percent. This was supported by new model launches, as well as an expanded dealer network for AC Motors’ distributor brands.

The motorcycle business also bounced back in 2021 with a 42 percent increase in units sold locally, boosted by the introduction of models from KTM’s sister brand, Husqvarna.

KTM Asia Motorcycle Manufacturing, AC Industrials’ manufacturing joint venture with KTM AG, recorded a major milestone in 2021, producing over 12,000 units – its highest-ever output since its inauguration in 2017. KAMMI also expanded its Laguna factory, adding production and assembly lines which will help establish the plant as a key regional hub for KTM in Southeast Asia.

Strides were also made in rationalizing AC Motors’ cost structure in 2021 through efforts such as repurposing dealerships into multi-brand facilities, automating and digitizing processes, and optimizing the organization. These efforts have set the group on the path towards returning to profitability in 2022.

Integrated Micro-Electronics Inc.

IMI’s revenues increased significantly on the back of recoveries in its core automotive market segments, notably in its core automotive and industrial sectors. However, disruptions in the global supply chain for semiconductors continued to persist throughout 2021, leading to an increase in material costs. These challenges were exacerbated by the rising cost of international freight and logistics and resulting delays in fulfillment. AC Industrials’ wholly-owned subsidiaries improved their performance in 2021, reducing their combined net loss by nearly 5 percent.

The power module assembly, a key component for electric vehicles, is one of the products manufactured by IMI as it moves towards more complex box build solutions


A recovering German automotive industry allowed MT-C-CON to grow revenues by 49 percent, with all business units posting strong performance. It plans to achieve profitability within the next two years through modernizing its tool shop business to increase its inhouse capacity, and optimizing its current headcount and sites.

Merlin Solar

Merlin Solar continued its rapid growth, with its 2021 revenues 82 percent higher than the previous year, supported by its transportation and mobile business units. Merlin's blended contribution margin also turned positive despite facing higher raw material and freight costs throughout the year.

VIA Optronics

VIA Optronics continued to ramp up its automotive pipeline, booking a large order from a major electric vehicle manufacturer for its dashboard display assemblies. It also made strategic investments in Germaneers and Sigmasense as it continues to expand its suite of integrated solutions.


STI’s core aerospace and defense markets continued to be affected by the pandemic, though increased participation in the medical segment through ventilators and COVID testers have allowed the company to weather the challenging year.

MT-C-CON’s unique solutions enable simpler and more efficient manufacturing processes

The medical sector is rapidly becoming a major segment in STI’s portfolio