Business Development Asia LLC
South East Asian Automotive News
Issue 5, FEBRUARY 1998
REGIONAL
Asahi Glass Co. Ltd., the Japanese auto-glass manufacturer, has cut production of glass at both its Indonesian and Thai factories by 50%. Construction of a new plant in Indonesia has been postponed, as production by car makers in both Indonesia and Thailand has decreased. (February 11th 1998)
Bridgestone Corp., Japan's leading tire manufacturer, has reduced production in Thailand by 60% and has cut production in Indonesia by more than 20%. The company expects to increase exports from both plants in order to take advantage of the weakened currencies. (February 11th 1998)
Daihatsu Motor Co. Ltd. will increase the output of components at its plants in Indonesia and Malaysia. This increase will boost the local content of cars assembled in both countries to 60%, reducing the need for costly imports from Japan. Engine parts and die-casting manufactured in Indonesia will also be exported to China and Vietnam. Daihatsu will also cut automobile assembly in Malaysia by 50%, to 43,000 units this year. (January 27th 1998)
Daewoo Motors acquired Ssangyong Motor for Won1,800bn (US$3bn). Ssangyong's annual capacity of 200,000 vehicles will significantly increase Daewoo's annual capacity of 160,000 units. (January 12th 1998)
Daewoo Motors and General Motors have signed an agreement to discuss a possible alliance. This would provide the US carmaker with access to Daewoo's distribution and service network as well as its manufacturing facilities. Under the agreement, debt ridden Daewoo would receive some help with the Won4,500bn (US$18bn) debt it has incurred, most notably by its acquisition of Ssangyong. (February 3rd 1998)
Mercedes-Benz India Ltd, a JV between Daimler Benz AG and Tata Engineering and Locomotive Company (TELCO) will launch the new Mercedes E-class series in India by the end of February 1998. The car will be offered in three different models with a base price equivalent to US$51,000. (January 16th 1998)
Shanghai Automotive Air Conditioner (SAAC) and Delphi Harrison Thermal Systems have agreed to terms on a JV to be called Shanghai Delphi Automotive Air Conditioning Systems Co. Ltd. The JV will produce both heat modules and air conditioners in the Pudong New Area for the growing automotive market in China. (February 11th 1998)
Tata Engineering and Locomotive Company (TELCO) of India has invested Rs17bn (US$423m) in the first all-Indian mini-car. TELCO expects production capacity of the vehicle to be between 150,000 and 200,000 units a year. This is one of TELCO's first forays into the small vehicle market and will challenge market leader Maruti Suzuki. Previously, most of TELCO's revenues had come from commercial vehicles. (January 16th 1998)
Volkswagen experienced an overall increase in sales of 11.5% in the Asia-Pacific region in 1997. While sales in both China and Japan remain strong, revenues elsewhere in the region declined from 36,381 units in 1996 to 33,281 units in 1997. The decline was most severe in Thailand and South Korea. Volkswagen believes the region will recover and intends to continue to build a more significant presence. (February 3rd 1998)
AV Volvo is planning a US$371m JV with China National Heavy Truck Corporation (CNHTC), the country's largest truck producer. The JV will produce up to 20,000 trucks a year in Shangdong province. The trucks will initially be for the domestic market but may be directed towards export if they prove to be competitive. Volvo already has a bus manufacturing JV in Xian, and is looking to establish a significant presence in the Chinese passenger car market. (January 10th 1998)
AV Volvo has become the first company to have an ASEAN Industrial Corporation (AICO) scheme approved since AICO was announced in 1996. Under the arrangement, Volvo will receive preferential tariffs on chassis frames, power steering equipment and other components shipped between Malaysia and Thailand. (February 9th 1998)
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