South East Asian Automotive News

Auto Alliance Thailand, a JV between Ford and Mazda, will start operations at its Rayong pick-up truck plant as originally planned in the middle of 1998. The plant will initially produce only 50% of total capacity, or 135,000 units per year. Production output will adjust accordingly with future changes in the economy. (March 31^st 1998)

Cagiva Motor Spa, the Italian motorcycle manufacturer, is increasing its investment in its International Vehicle Company (IVC) JV with the KPN Group. Cagiva currently has a 30% stake in the venture. The size of its new investment is undisclosed, but Cagiva’s stake may now rise to as much as 50%. (March 23^rd 1998)

Chrysler has bought out its JV partner Swedish Motors’ 30% stake in Thai Chrysler Automotive (TCA). Chrysler will now establish its own wholly-owned distributor, Chrysler Sales and Services (Thailand), to manage the sales, service and marketing of Chrysler and Jeep vehicles in the country. Chrysler is also planning to begin assembly of Jeep Wranglers in Thailand as local content regulations are phased out. (April 1^st 1998)

Daihatsu Motor Company has stopped production in Thailand and has closed its sales outlets in the country as of March 31^st. Daihatsu-Phranakorn Motor Company (PNA), its sales affiliate, will also terminate operations. Daihatsu sold only 160 vehicles in 1997 in Thailand in contrast to the 5,000 sold in 1995. (March 25^th 1998)

Delphi Automotive Systems, General Motors’ auto parts subsidiary, is in negotiation with three Thai-based firms for the acquisition of their businesses. Delphi is aiming to triple its Asian sales by the year 2000 from the US$1.4bn the company recorded in 1996. (April 2^nd 1998)

Ford Sales (Thailand) is confident of seeing sales growth this year despite the economic downturn. The company expects national sales of pickup trucks, which generate 90% of the company’s sales, to improve on last year’s total of 21,000 units. In February 1998, Ford captured 7.5% of the pick-up market, compared to only 0.6% in the same period in 1997. (March 9^th 1998)

General Motors will further delay the commission of its Laem Chabang assembly plant for a few months from the previously scheduled opening in July 1999. GM previously announced that it was reducing the investment cost of the plant from US$750m to US$500m and cutting the production volume from 100,000 to 40,000 units per year. GM is also considering using its plant to manufacture multi-purpose cars instead of sedans as originally planned. (March 31^st 1998)

Hino Motors Ltd (Thailand) will restart truck production in June. By the fiscal year ending March 1999, the company plans to have sold about 1,000 trucks to local customers. The company is also aiming to use its Thai unit as an export base to Africa, Australia and the US. (March 23^rd 1998)

Honda Motors Co. will inject US$15m into its Thai parts supply operations in order to boost its capital base. Honda also aims to increase automotive parts exports from Thailand in 1998 to Bt17bn (US$425m). (March 25^th 1998)

AP Honda Company’s Thai motorcycle market share in 1996 of 51% grew to 58% in 1997 despite the economic crisis. The figure increased further in the first two months of 1998 to 60%. The motorcycle market has fallen year-on-year by 47.5% and recorded sales of only 48,962 units in February. This is however a small gain of 4.8% on January’s figures. (March 23^rd 1998)

Keihin Seiki Thailand will issue new shares to its Japanese shareholder, Keihin Corp., an auto parts affiliate of Honda. The capital will be used to pay off the local venture’s loans and increase its financial base. Through this move, Keihin Corp. will become the controlling shareholder in the JV, increasing its stake to 57%. (March 25^th 1998)

Mitsubishi Motors Corp. of Japan said that it would close a Thai factory as a part of a three-year streamlining plan after it incurred worse than expected net losses in the year to March 31^st. The group announced its first net loss in its history of US$866m. (March 10^th 1998)

Siam Motors Group, the assembler and distributor of Nissan cars and pick-up trucks in Thailand, has concluded an agreement with GE Capital (Thailand) to operate a leasing service for Nissan dealerships. The service is to be known as Nissan Vehicle Leasing. (April 10^th 1998)

Thailand recorded 109% growth in the export of vehicles and auto components in 1997, the total rising to Bht32.6bn (US$870m). Europe and the United States were the principal export markets, receiving 70% of the total. (March 31^st 1998)

Volvo has stated that it does not plan to take over its local JV, Swedish Motors. Other big automotive companies including BMW and Mercedes-Benz are rumored to have attempted to take over their Thai operations from local partners. (March 31^st 1998)

Suzuki Motor Corp. of Japan will increase its stake in the motorcycle production firm, Thai Suzuki Motor Co. to become the majority stakeholder. With an investment of Bht10m (US$252,000), the Japanese automaker will raise its stake from 48.9% to 50.8%. Production in 1997 declined to 80,000 motorcycles from a peak of 390,000 units. The company plans to restructure sales to focus on international markets. (March 12^th 1998)

Toyota Motor Thailand will increase prices of its entire range for the second time this year. Prices of locally assembled cars will increase 5-7%, while prices of imported models will rise 10%. The company explained that this move is an attempt to combat rising production costs, currency depreciation and tax increases. Toyota currently manufactures its Soluna, Corolla, Corona, Hilux 1-tonne pickup and Dyna light truck in the country. (March 11^th 1998)

Visteon Ltd., the Ford-owned automotive component manufacturer, has put its plant expansion plans in Thailand on hold. However, it also stated that it is continuing to look at new business opportunities with Japanese and other western car manufacturers in Thailand and South East Asia. The company's Thai plant, which manufactures interior trim and air-conditioning components, will be running at 40%-50% by year-end. (March 31^st 1998)