Business Development Asia LLC
South East Asian Automotive News
Issue 5, FEBRUARY 1998
THAILAND
The Federation of Thai Industries Automotive Club has announced a 118% increase in the value of exports to Bht28bn (US$583m) for vehicles and components for 1997. Concomitant with this export growth was a large decrease in domestic sales. 360,303 vehicles were assembled in 1997, a decrease of 36% or 199,125 units. Both shifts in sales were fueled by the devaluation of the baht, which made exports attractive and domestic purchases expensive. (January 27th 1998)
General Motors Thailand is looking for local parts suppliers. The devaluation of the baht has made imported auto components more expensive and in an effort to reduce costs, GM has been turning to local parts manufacturers. GM has awarded supply contracts for 900 components to 50 local companies. It is expected that GM will award another 300 component contracts to local companies. (January 23rd 1998)
General Seating, a JV between NHK Spring and a US partner, was recently awarded a contract to supply seats for 80,000 cars a year when General Motors' operations come online in 1999. General Seating was established primarily to serve the Ford/Mazda investment in Thailand. However, the contract with GM significantly expands General Seating's business base. (January 22nd 1998)
Honda Motor Co. has reduced output in its Thai factory to 60 units a day on one shift. The company anticipates that by 1999 the factory will be producing 30,000 units annually, half of the factory's capacity. Honda intends to boost exports from Thailand to improve overall sales. Last year the company exported 600 passenger cars but expects that number to rise to 10,000 by 1999. (January 21st 1998)
Mazda Motor will postpone the beginning of dual shift operations at its new Thai facility. The factory will continue to operate with one shift and most of the production will be targeted for export. The factory, operated by Ford Motors Auto Alliance Thailand, has an annual capacity of 135,000 light trucks running on two shifts. (January 26th 1998)
Nissan Motor Co. is set to increase its investment in Siam Nissan Automobile Co., its JV with Siam Motors Co. Nissan will increase its stake from 25% to over 40%. This equity injection is an attempt to support Nissan's automotive interests in Thailand. The company also announced that it would restart production of large trucks in March 1998. (January 20th 1998)
Thai Summit Auto Parts Industry Co. workers clashed with police during a rally of support for the company's striking workers. Management of Thai Summit had earlier announced a wage increase freeze and cuts in bonuses and food allowances. The violence prompted US car manufacturers to warn that further labor unrest could stall foreign investment. (January 24th 1998)
Toyota Motor Thailand has announced a wider range for the Toyota Corolla in 1998. The car is now available in three engine sizes: 1500cc, 1600cc and 1800cc. This is the first time that the Corolla has been offered with a 1800cc engine. The company expects to sell 12,000 units of the 1800cc model this year. (January 29th 1998)
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