Business Development Asia LLC
South East Asian Automotive News
ISSUE 3, OCTOBER 1997
THAILAND
Thai automakers are sharply cutting output, rethinking production plans and lowering sales targets by as much as 50% due to projected sluggish domestic demand in the coming two years. Sales of vehicles (excluding motorcycles) have fallen 20% in the first eight months of 1997 to 308,291 units. Manufacturers such as Honda, Nissan Motors, Volvo, Toyota, and Mercedes-Benz are all reconsidering their sales forecasts. Isuzu has delayed construction of its second truck plant, Nissan has cut output to clear stocks and Hino has suspended production from mid-August until the end of September. (August 13th 1997)
The value of exported auto vehicles and parts from January to July 1997 jumped 140% to Bht12.5bn (US$339m), according to the Federation of Thai Industries (FTI) Automotive Club. Vehicle exports last year were worth Bht16bn and are expected to reach Bht48bn this year. Exports of CBU cars and pickup trucks showed the biggest increase, from 2,800 from January-July 1996 to 18,900 units for first seven months of 1997. FTI anticipates a 25% drop to 460,000 units in domestic vehicle sales this year. (August 27th 1997)
Delphi Automotive Systems, the components subsidiary of General Motors, is positive about prospects in Thailand. President J.T. Battenberg described the situation in Thailand as "just a short term aberration" and that Delphi will not change its long-term goals there. Delphi intends to establish two wholly-owned operations and three JVs in Thailand. (September 1st 1997)
Ford Sales (Thailand) is building a strong marketing and distribution network in the country to better establish its products and brandname in Thailand. Ford has appointed 31 authorized dealers covering 29 provinces and expects the numbers to increase to 58 dealers in 50 provinces by the end of 1998. Ford has also established a parts depot and a leasing company. These efforts will pave the way for the operation of its Auto Alliance assembly plant early next year. Ford is hoping to gain a 10% market share by 2000. (September 15th 1997)
Honda Motor will set up a new R&D motorcycle subsidiary in Thailand. The new center will conduct product design research for the ASEAN region and focus on ensuring Honda's products conform to the tightening emissions regulations of the countries in the region. (September 22nd 1997)
Siam Cement still plans to expand its auto parts manufacturing operations despite rumors of heavy foreign debt exposure and the current decline in the industry. The Group will spend Bht7.37bn (US$205m) on a total of nine parts-making ventures, directly or through its subsidiaries including Nawaloha Thai Co. and Thai Engineering Products Co. All nine projects are scheduled to be in production in 2000. Siam Cement is also rumoured to be prepared to sell its non-core assets, presumably including some auto businesses. (July 31st 1997)
Srithai Superware, the plastic tableware manufacturer, is to form a JV with France-based Plastic Omnium, the sole supplier of automotive plastic parts to General Motors plants in Europe. The venture is to produce 120,000 bumpers a year along with 18 other automotive parts. The plant will begin production in 1999. Aside from GM, Srithai intends to manufacture and supply parts to Ford, Honda and Toyota. (September 8th 1997)
Suzuki Motor has committed to promote motorcycle production in Thailand by expanding exports from its production base in the Kingdom. Motorcycles exported from Thailand will increasingly replace the Japan as the export base. Currently, Thai Suzuki Motor exports motorcycles to the Philippines, Cambodia, Laos, Myanmar and Vietnam. Export volume is expected to increase from 26,000 units in 1996 to 40,000 in 1997. The production capacity of the Thai Suzuki Motor plant is between 350,000-400,000 units per year. (September 22nd 1997)
The Thai Auto-Parts Manufacturers Association (TAPMA) reports that domestic auto parts manufacturers have asked the government and car assemblers to draft a new import duty structure to relieve the current problem of excess output. TAPMA comprises of 140 medium- and small-sized parts producers. TAPMA has also held discussions with international manufacturers to encourage them to increase purchases from the Thai companies. (September 1st 1997)
Visteon, Ford's new components group, will oversee the entire production and marketing of auto components in Thailand. Mark Critz, MD of Visteon's Thai unit, announced plans to rapidly expand its customer base in Thailand. The company expects sales to other assemblers to account for 20% of total annual sales within two years. Auto Components Thailand (ACT), a wholly-owned subsidiary of Visteon, has completed the construction of its Bht1.26bn (US$35m) plant. It will be operational early next year. (September 11th 1997)
Recent News: Indonesia, Singapore, Malaysia, Philippines, Regional Focus: The impact of South East Asia's financial turmoil on the auto industry
Business Development Asia LLC, The Economist Building,
111 West 57th Street, Suite 405, New York, NY 10019
Tel (212) 265 5300 Fax (212) 265 4300 E-mail bdallc@aol.com
A limited liability company incorporated in the State of DelawareHome | Introduction | Services | Skills | Management | Contact | Newsletters