Ayala Corporation Pivots from Honda Dealerships to Expand Electric Vehicle Presence

ACMobility Concludes Honda Dealership Operations, Shifts Focus to Electric Vehicles

ACMobility, the mobility solutions unit of Ayala Corporation, is set to conclude its three-decade partnership with Honda Cars Philippines, Inc. (HCPI) by the end of 2025. This strategic decision signals a significant pivot towards the rapidly expanding electric vehicle (EV) market, as the company seeks to optimize its portfolio for future growth.

The Strategic Restructuring in Detail

ACMobility, through its dealership arm Iconic Dealership, Inc. (IDI), will transfer its nine Honda dealerships across key Philippine locations—including Makati, Pasig, Shaw, Bacoor, Cebu, Mandaue, Iloilo, Negros, and Cagayan de Oro—to new principals by January 1, 2026. This move follows ACMobility's earlier exits from distribution partnerships with Volkswagen and Maxus, indicating a broader strategy of portfolio optimization.

The rationale for this divestment is underscored by the contrasting performance of traditional internal combustion engine (ICE) vehicles versus EVs within ACMobility's portfolio. While ACMobility's Honda dealerships have collectively sold over 220,000 vehicles since 1990, recent trends highlight a shift. In the first half of 2025, BYD, a major EV partner for ACMobility, delivered 6,700 vehicles in the Philippines, a substantial increase from just 200 units in the same period last year. In contrast, Honda's sales in the region grew under 4% to 8,220 units during the same timeframe.

Market Response and Financial Performance

The market sentiment surrounding this strategic realignment is largely bullish for Ayala Corporation's long-term growth prospects in the EV sector and for BYD's increasing penetration into the Philippine market. Conversely, the development presents a neutral to slightly negative outlook for Honda's traditional ICE business in the region, potentially necessitating a re-evaluation of its local distribution strategy.

Financially, ACMobility has already demonstrated robust performance, with its net income surging by 400% to P122 million in the first half of 2025, up from P24 million in the prior year. This growth was attributed to higher dividends from Isuzu, equity earnings from Honda, and a continued positive contribution from BYD. Concurrently, Ayala Corporation's overall attributable net income for the first half rose by 5% to P23.36 billion from P22.29 billion year-on-year. Following the announcement, shares of Ayala Corp. (AC) advanced by 0.91%, or P4.40, to close at P486 apiece.

Broader Context and Industry Implications

ACMobility's strategic pivot is aligned with burgeoning growth in its EV and new energy vehicle (NEV) segments. In 2024, the unit's total car sales volume jumped by 46%, primarily driven by a 50% surge in sales of BYD and Kia vehicles, which effectively offset softer demand for Honda and Volkswagen models. BYD sales alone escalated from 61 units in 2023 to 5,106 units in 2024, now constituting 22% of ACMobility's total sales. Kia also saw significant growth, with sales increasing by almost 50% to 7,078 units, accounting for 30% of total sales.

This aggressive growth has positioned ACMobility's volume expansion at five times the industry average, leading to a 120-basis-point increase in its total market share to 4.9%. More significantly, its NEV market share soared to 82% from 18% previously, with ACMobility now holding an 85% market share in the local NEV segment, largely propelled by BYD. NEV sales now represent 23% of ACMobility's total sales, with popular models including the BYD Sealion 6, BYD Atto 3, and Kia Sonet.

To support this expansion, Ayala Corporation injected P3.7 billion into ACMobility's EV business unit in 2025, with P2 billion allocated for BYD Distribution and P1.7 billion for charging stations and EV distribution. The company is also aggressively expanding its charging infrastructure, having installed 111 charging points in 2024, bringing its total to 215 across 86 locations. ACMobility aims to reach 700 charging points by the end of 2025 and over 2,500 in the future, reinforced by a partnership with Shell to deploy over 100 new DC fast charging points.

Navigating the Transition and Future Outlook

While the strategic rationale is clear, the practicalities of the transition present operational considerations. As one commentary observed:

"I really like this move if we zoom out: the Zobel Family is detaching itself from legacy brands, and refocusing its efforts on a new brand with proven growth prospects in BYD. That sounds great as a headline, but I'm curious about how the transition will work under the hood, at the ground level. The nine dealerships under ACMobility will be turned over to new management very quickly, but how quickly will they be able to spin up the new BYD dealerships? Are they going to put the BYD dealerships in the same locations as the old Honda dealerships? It doesn't sound like it. Will the new locations be good? How long will it take to get those up and running?"

Looking ahead, Ayala Corporation's ambitious strategy aims to establish ACMobility as the leading EV platform in the Philippines by 2030, targeting battery EVs to constitute 20% of all new car sales. Analysts maintain an optimistic outlook for Ayala's future, projecting an all-time high core net income of P45 billion in 2024 and an ambitious target of P65 billion by 2026. The average 12-month price target for Ayala (AC) stands at 773 PHP, indicating a potential upside of +61.85% from its current market price. An intrinsic valuation model further suggests the company is undervalued by 67%.

Ayala Corporation is expected to sustain its semi-annual dividend policy, with an annual dividend of 9.21 PHP per share, resulting in a 1.88% yield. This policy is anticipated to be supported by the company's strong financial performance and its strategic investments in high-growth sectors such as EVs.