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Thailand's War With The Uk


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The cat returns

A British classic is revived

Jaguar’s new F-Type is the successor to the 1961 E-Type—the “most beautiful car ever made”, in the judgment of the late Enzo Ferrari, a rival.

It is also a tribute to Indian ownership.

http://www.economist.com/node/21563775

20120929_BRP003_0.jpg

Head of design is half Thai, half English. Where does the thread go now. biggrin.png

I am sure the car was designed with the English part of his brain.biggrin.png So all of the late night posters can rest easy.

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Not trying to turn this into a "Brit bash"...but, man you guys made some really really crappy awful cars.

British Leyland

The XJS and XJ6 of 1970's and 80's.

MG's, Jensen's, ...the Range Rover's of the 80's and 90's.

Austin princess, Austin Allegro

Morris Marina

lest not forget Lucas electrical systems.

AKA The Prince of Darkness.

The inventor of the first intermittent wiper.

The inventor of the first intermittent headlight.

Q: Why do Brits drink warm beer? A:Lucas refrigerators.

The Top Ten Worst British Cars as Chosen by the British themselves:

http://digitaljourna.../article/258458

http://top10.com/top...st-british-cars

I say quality not quantity.....has Thailand ever designed a car let alone one to compete with the Aston Martin...the TVR...the Lotus......?

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Not trying to turn this into a "Brit bash"...but, man you guys made some really really crappy awful cars.

British Leyland

The XJS and XJ6 of 1970's and 80's.

MG's, Jensen's, ...the Range Rover's of the 80's and 90's.

Austin princess, Austin Allegro

Morris Marina

lest not forget Lucas electrical systems.

AKA The Prince of Darkness.

The inventor of the first intermittent wiper.

The inventor of the first intermittent headlight.

Q: Why do Brits drink warm beer? A:Lucas refrigerators.

The Top Ten Worst British Cars as Chosen by the British themselves:

http://digitaljourna.../article/258458

http://top10.com/top...st-british-cars

I say quality not quantity.....has Thailand ever designed a car let alone one to compete with the Aston Martin...the TVR...the Lotus......?

Unless I am wrong people design cars not countries. Check out the photo above.

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Not trying to turn this into a "Brit bash"...but, man you guys made some really really crappy awful cars.

British Leyland

The XJS and XJ6 of 1970's and 80's.

MG's, Jensen's, ...the Range Rover's of the 80's and 90's.

Austin princess, Austin Allegro

Morris Marina

lest not forget Lucas electrical systems.

AKA The Prince of Darkness.

The inventor of the first intermittent wiper.

The inventor of the first intermittent headlight.

Q: Why do Brits drink warm beer? A:Lucas refrigerators.

The Top Ten Worst British Cars as Chosen by the British themselves:

http://digitaljourna.../article/258458

http://top10.com/top...st-british-cars

I say quality not quantity.....has Thailand ever designed a car let alone one to compete with the Aston Martin...the TVR...the Lotus......?

Unless I am wrong people design cars not countries. Check out the photo above.

Ok...Thailand make/sell more cars than the Brits - I am happy for them - seriously :)

But the UK has never been a powerhouse car producer..well at least for the last 30 years...so British Marque quality..and these are pure British Marques, is something I am proud of.

I will be more interested when Thailand produce a bespoke luxury/sports car that can be mentioned in the same building as a Nobel.

But kudos for an entertaining thread clap2.gif

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I hope all the flaming is over because I thought it was a rather interesting discussion about auto production in Thailand.

I read all the overnight posts from our British friends who can't join us in Thailand right now and I think I have the gist of the arguments.


  1. The box theory. Thais can't engineer a car so we put them together and take them apart and box them and ship them to Thailand. Well, no. about half of the car is made from raw materials in Thailand and purchased from local manufactures in Thailand.

  2. The cheap labor theory. The only reason cars are made in Thailand is cheap labor. Well, no. Labor is only about 10% of the cost of a new car so that would make no sense at all.

  3. The import tax idea. The only reason cars are made in Thailand is to escape the import tax. Well, no. Half the cars made in Thailand are exported to another country; so you can see that makes no sense at all.

For the history buffs the biggest year in auto production in the UK was 1972 and the biggest year in auto production in Thailand will be 2012.

1. Correct. Thais may be able to build and design a starter motor. Or manufacture one to an imported design. But 8% of the cost of a car (and some would say a greater proportion of the value) is in engineering and design, which is still basically done in head office - Tokyo, Muich, Shah Alam or wherever.

2. Labour makes up about 10% of the cost of the car i.e. one of the biggest components; if you can get your labour at half the price, you can double your margin.

3. A lot of the cars exported from Thailand are offsets i.e. they allow other cars to be imported at lower duty. Thailand exports pickups to Japan, and counter-flows saloon cars into Thailand. If the manufacturer did not want to sell saloon cars here, he may only build a pickup factory half the size here. Though having gone to the effort to build a pickup factory here to address the Thai market, he may then produce all his pickups at a single line, particularly for export to neighbouring countries that have no significant local small truck manufacturing capability.

SC

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I hope all the flaming is over because I thought it was a rather interesting discussion about auto production in Thailand.

I read all the overnight posts from our British friends who can't join us in Thailand right now and I think I have the gist of the arguments.


  1. The box theory. Thais can't engineer a car so we put them together and take them apart and box them and ship them to Thailand. Well, no. about half of the car is made from raw materials in Thailand and purchased from local manufactures in Thailand.

  2. The cheap labor theory. The only reason cars are made in Thailand is cheap labor. Well, no. Labor is only about 10% of the cost of a new car so that would make no sense at all.

  3. The import tax idea. The only reason cars are made in Thailand is to escape the import tax. Well, no. Half the cars made in Thailand are exported to another country; so you can see that makes no sense at all.

For the history buffs the biggest year in auto production in the UK was 1972 and the biggest year in auto production in Thailand will be 2012.

1. Correct. Thais may be able to build and design a starter motor. Or manufacture one to an imported design. But 8% of the cost of a car (and some would say a greater proportion of the value) is in engineering and design, which is still basically done in head office - Tokyo, Muich, Shah Alam or wherever.

2. Labour makes up about 10% of the cost of the car i.e. one of the biggest components; if you can get your labour at half the price, you can double your margin.

3. A lot of the cars exported from Thailand are offsets i.e. they allow other cars to be imported at lower duty. Thailand exports pickups to Japan, and counter-flows saloon cars into Thailand. If the manufacturer did not want to sell saloon cars here, he may only build a pickup factory half the size here. Though having gone to the effort to build a pickup factory here to address the Thai market, he may then produce all his pickups at a single line, particularly for export to neighbouring countries that have no significant local small truck manufacturing capability.

SC

8% design on a 4 year model run of an average auto?

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I hope all the flaming is over because I thought it was a rather interesting discussion about auto production in Thailand.

I read all the overnight posts from our British friends who can't join us in Thailand right now and I think I have the gist of the arguments.


  1. The box theory. Thais can't engineer a car so we put them together and take them apart and box them and ship them to Thailand. Well, no. about half of the car is made from raw materials in Thailand and purchased from local manufactures in Thailand.

  2. The cheap labor theory. The only reason cars are made in Thailand is cheap labor. Well, no. Labor is only about 10% of the cost of a new car so that would make no sense at all.

  3. The import tax idea. The only reason cars are made in Thailand is to escape the import tax. Well, no. Half the cars made in Thailand are exported to another country; so you can see that makes no sense at all.

For the history buffs the biggest year in auto production in the UK was 1972 and the biggest year in auto production in Thailand will be 2012.

1. Correct. Thais may be able to build and design a starter motor. Or manufacture one to an imported design. But 8% of the cost of a car (and some would say a greater proportion of the value) is in engineering and design, which is still basically done in head office - Tokyo, Muich, Shah Alam or wherever.

2. Labour makes up about 10% of the cost of the car i.e. one of the biggest components; if you can get your labour at half the price, you can double your margin.

3. A lot of the cars exported from Thailand are offsets i.e. they allow other cars to be imported at lower duty. Thailand exports pickups to Japan, and counter-flows saloon cars into Thailand. If the manufacturer did not want to sell saloon cars here, he may only build a pickup factory half the size here. Though having gone to the effort to build a pickup factory here to address the Thai market, he may then produce all his pickups at a single line, particularly for export to neighbouring countries that have no significant local small truck manufacturing capability.

SC

8% design on a 4 year model run of an average auto?

"Engineering and overhead"; it was only very brief breakdown of cost, but that seems about right to me. Comparable to dealership costs and profit margin, if I recall correctly.

People spend a lot of time on this thread going on about labour and engineering competence, but dealership sales delivery is equally important to car sales. Which do you reckon has the best dealership network, in aggregate, the Thai auto industry of the British auto industry?

Of course, the idea of 'national' auto industries is laughable in this era of multi-national corporations. There is no Thai or British auto industry, there are just some car factories based in Thailand for the time being. Yu could call them Thai, or Japanese (depending on the marque), or American or German, depending on the ultimate ownership, but basically they are just the pawns in a game of chess where every side is grey...

SC

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If the Thai labour costs were the same as British labour costs there would be zero vehicle production in Thailand.

A long thread to point out the obvious eh cmk?

As l said way back.

Same as UK ''call centres'', many moved to China, India, Malaysia etc. One reason, labour costs. Rang a few times and didn't have a clue what they were saying and visa versa. laugh.png

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If the Thai labour costs were the same as British labour costs there would be zero vehicle production in Thailand.

A long thread to point out the obvious eh cmk?

As l said way back.

Same as UK ''call centres'', many moved to China, India, Malaysia etc. One reason, labour costs. Rang a few times and didn't have a clue what they were saying and visa versa. laugh.png

Azzafack,man,thursnaneaethimspeekawurdaeEnglish, northereis, bythewayman

RIBB

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I hope all the flaming is over because I thought it was a rather interesting discussion about auto production in Thailand.

I read all the overnight posts from our British friends who can't join us in Thailand right now and I think I have the gist of the arguments.


  1. The box theory. Thais can't engineer a car so we put them together and take them apart and box them and ship them to Thailand. Well, no. about half of the car is made from raw materials in Thailand and purchased from local manufactures in Thailand.

  2. The cheap labor theory. The only reason cars are made in Thailand is cheap labor. Well, no. Labor is only about 10% of the cost of a new car so that would make no sense at all.

  3. The import tax idea. The only reason cars are made in Thailand is to escape the import tax. Well, no. Half the cars made in Thailand are exported to another country; so you can see that makes no sense at all.

For the history buffs the biggest year in auto production in the UK was 1972 and the biggest year in auto production in Thailand will be 2012.

1. Correct. Thais may be able to build and design a starter motor. Or manufacture one to an imported design. But 8% of the cost of a car (and some would say a greater proportion of the value) is in engineering and design, which is still basically done in head office - Tokyo, Muich, Shah Alam or wherever.

2. Labour makes up about 10% of the cost of the car i.e. one of the biggest components; if you can get your labour at half the price, you can double your margin.

3. A lot of the cars exported from Thailand are offsets i.e. they allow other cars to be imported at lower duty. Thailand exports pickups to Japan, and counter-flows saloon cars into Thailand. If the manufacturer did not want to sell saloon cars here, he may only build a pickup factory half the size here. Though having gone to the effort to build a pickup factory here to address the Thai market, he may then produce all his pickups at a single line, particularly for export to neighbouring countries that have no significant local small truck manufacturing capability.

SC

8% design on a 4 year model run of an average auto?

"Engineering and overhead"; it was only very brief breakdown of cost, but that seems about right to me. Comparable to dealership costs and profit margin, if I recall correctly.

People spend a lot of time on this thread going on about labour and engineering competence, but dealership sales delivery is equally important to car sales. Which do you reckon has the best dealership network, in aggregate, the Thai auto industry of the British auto industry?

Of course, the idea of 'national' auto industries is laughable in this era of multi-national corporations. There is no Thai or British auto industry, there are just some car factories based in Thailand for the time being. Yu could call them Thai, or Japanese (depending on the marque), or American or German, depending on the ultimate ownership, but basically they are just the pawns in a game of chess where every side is grey...

SC

I would define engineering and overhead a bit different than design but given that title I would agree with 8%.

As for national car companies IMO you are correct and they like national engineers; only existing in the minds of out of work taxi drivers with too much time on their hands.

What makes the auto industry great is not the auto industry but all the stuff that comes along with it.

In almost every category there are raw materials needed to produce a car. Cold rolled steel, tool steels, stainless steel, the list is endless.

You give me a contract for 4 years of production of a little plastic tail light and I can open a factory fabricating another 20 items.

You give me a contract from Ford of Thailand and I can also get a loan to finance that factory.

I have no idea which dealer network is the best, Thailand or the UK. I have no idea which has the best service or produces the most profit. I think they are all a bit like pirates.

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If the Thai labour costs were the same as British labour costs there would be zero vehicle production in Thailand.

A long thread to point out the obvious eh cmk?

If Thai labour costs were the same as the UK, then there would still be plenty of manufacturing here, as the tariffs far outweigh the ten or twenty or thirty percent that would add on to the cost of the vehicle. On the other hand, if Thai labour costs were that high, there would be the incentive for an even greater level of automation, and more skilled people involved.

Furthermore, if Thai wages were the same as UK, vehicle sales would be higher...

Sometimes, answers are not obvious.

SC

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If the Thai labour costs were the same as British labour costs there would be zero vehicle production in Thailand.

A long thread to point out the obvious eh cmk?

If Thai labour costs were the same as the UK, then there would still be plenty of manufacturing here, as the tariffs far outweigh the ten or twenty or thirty percent that would add on to the cost of the vehicle. On the other hand, if Thai labour costs were that high, there would be the incentive for an even greater level of automation, and more skilled people involved.

Furthermore, if Thai wages were the same as UK, vehicle sales would be higher...

Sometimes, answers are not obvious.

SC

..........and the cars would be getting built in Burma.

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If the Thai labour costs were the same as British labour costs there would be zero vehicle production in Thailand.

A long thread to point out the obvious eh cmk?

Cowboy and I said the same thing but came to two different conclusions.

I said, “The cheap labor theory. The only reason cars are made in Thailand is cheap labor. Well, no. Labor is only about 10% of the cost of a new car so that would make no sense at all.”

Cowboy said, “Labour makes up about 10% of the cost of the car i.e. one of the biggest components; if you can get your labour at half the price, you can double your margin.”

One of us is right and one is wrong (or somewhere in between). smile.png But at least we both agree on the 10% figure.

Edited by chiangmaikelly
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If the Thai labour costs were the same as British labour costs there would be zero vehicle production in Thailand.

A long thread to point out the obvious eh cmk?

Cowboy and I said the same thing but came to two different conclusions.

I said, “The cheap labor theory. The only reason cars are made in Thailand is cheap labor. Well, no. Labor is only about 10% of the cost of a new car so that would make no sense at all.”

Cowboy said, “Labour makes up about 10% of the cost of the car i.e. one of the biggest components; if you can get your labour at half the price, you can double your margin.”

One of us is right and one is wrong (or somewhere in between). smile.png

Some cars are built in Thailand because of the cheap labour for export to other countries; either where the tariffs are much lower, or where it is not practicable to build a plant (Myanmar, for example, or Singapore).

I think I actually said 15% when I gave my approximate breakdown; you said 10%; I think my figures were for a study of the UK car industry, so labour cost might be a greater component there... but anyway, the principles are the same. And my point was that the margins are also quite small, so a significant change in any part of the cost, though small in terms of the overall cost, is still significant in comparison to the profit margin.

You might find that if labour costs were higher here, MORE cars were built for export, to offset the greater number that Thais could afford to buy...

On the other hand, you might find that in such a case other countries would not accept Thailand's outrageous tariffs...

SC

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If the Thai labour costs were the same as British labour costs there would be zero vehicle production in Thailand.

A long thread to point out the obvious eh cmk?

If Thai labour costs were the same as the UK, then there would still be plenty of manufacturing here, as the tariffs far outweigh the ten or twenty or thirty percent that would add on to the cost of the vehicle. On the other hand, if Thai labour costs were that high, there would be the incentive for an even greater level of automation, and more skilled people involved.

Furthermore, if Thai wages were the same as UK, vehicle sales would be higher...

Sometimes, answers are not obvious.

SC

..........and the cars would be getting built in Burma.

And then taxed at 100+% when they were imported to Thailand?

The level of free trade within ASEAN is not that great, or you would see a lot more protons in Thailand (and fewer Japanese assembly plants in Malaysia, since labour is cheaper in Thailand)

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Thai exports are not in a closed and protected market. I don't know where you get that. I also don't know where import duties come into play when the Thais import raw materials.

Import Duties on Cars - From the Thai Customs Department can be found here ["]http://www2.customs....me=PersonalPer]

As you can see the total import taxes start at 187% and goes up to 328%.

That's how they make their money,not on the build Assembly quality! anothert form of Taxation,same as all the other extortionate Imports.

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Thai exports are not in a closed and protected market. I don't know where you get that. I also don't know where import duties come into play when the Thais import raw materials.

Import Duties on Cars - From the Thai Customs Department can be found here [http://www2.customs....me=PersonalPer]

As you can see the total import taxes start at 187% and goes up to 328%.

That's how they make their money,not on the build Assembly quality! anothert form of Taxation,same as all the other extortionate Imports.

Who is they? The car companies?

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Thai exports are not in a closed and protected market. I don't know where you get that. I also don't know where import duties come into play when the Thais import raw materials.

Import Duties on Cars - From the Thai Customs Department can be found here [http://www2.customs....me=PersonalPer]

As you can see the total import taxes start at 187% and goes up to 328%.

That's how they make their money,not on the build Assembly quality! anothert form of Taxation,same as all the other extortionate Imports.

Who is they? The car companies?

Yes. The local producers can build a car that costs more than a vehicle of the same quality from overseas, and still sell it at a high margin and undercutting the imported competition, which has the added tariff to cope with. In this way, the local manufacturers are allowed to remain incompetent and fixed costs are absorbed in the local market, while vehicles are exported at avoidable cost only.

Furthermore, the exported vehicles are used to offset other imports, thus mitigating import tax for companies which have manufacturing plants here

SC

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Import Duties on Cars - From the Thai Customs Department can be found here [http://www2.customs....me=PersonalPer]

As you can see the total import taxes start at 187% and goes up to 328%.

That's how they make their money,not on the build Assembly quality! anothert form of Taxation,same as all the other extortionate Imports.

Who is they? The car companies?

Yes. The local producers can build a car that costs more than a vehicle of the same quality from overseas, and still sell it at a high margin and undercutting the imported competition, which has the added tariff to cope with. In this way, the local manufacturers are allowed to remain incompetent and fixed costs are absorbed in the local market, while vehicles are exported at avoidable cost only.

Furthermore, the exported vehicles are used to offset other imports, thus mitigating import tax for companies which have manufacturing plants here

SC

"Let me get this straight. The Thai government gives the import tax to the car makers in Thailand?

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So me and my buddy Henry were sitting around at the yacht club having a beer. I drove a Jaguar back then. Henry asked me why I wasn't driving a Ford and I told him it's because he couldn't win at Le Mans. He said, “could too.” I said, “could not.”

So good to my word I traded in my Jag and bought a Mustang in 1967 the first year an American designed and made car won at Le Mans.

But as good as it was for Americans to finally win at Le Mans among all those snooty European drivers who thought Yanks were only hillbilly stock car racers it had nothing to do with car production and also nothing to do with what I was talking about in this thread.

Where do the best automotive engineers come from today? I don't know but one would guess Germany or Japan. And I didn't compare Thailand to Germany or Japan.

Thai engineers may not be coming up with new ways to make a chassis more aerodynamic but they have figured out how to keep the factory running with Thai workers whose first priority is drinking whiskey and eating som tom. Now that is a feat of modern engineering. They take raw materials and produce a finished product and they do it on time and ship it on time and then go to lunch and eat som tom on time. The buses run on time that pick up the workers. They run past my house every day and in three years I have never seen one late. That takes maintenance and scheduling and a host of characters that have degrees in industrial engineering to pull off. It is not formula one racing it is simple factory engineering.

Let's just ignore that you're bezzie mates with Henry Ford for a minute, but Ford or Americans didn't design the GT40 they couldn't do it themselves. They got Eric Broadley of Lola to design it.

That would be British Eric Broadley of British company Lola with British John Wyer working with him. It was designed and built by British people in Britian.

The only American thing about the car was the engine block. thumbsup.gif

Not forgetting many decades of Design and Manufacture of Indy,and Formula 3000,Racing among many other Cars.Made wholly and solely at Lola. and exported.

Edited by MAJIC
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Thai exports are not in a closed and protected market. I don't know where you get that. I also don't know where import duties come into play when the Thais import raw materials.

Import Duties on Cars - From the Thai Customs Department can be found here [http://www2.customs....me=PersonalPer]

As you can see the total import taxes start at 187% and goes up to 328%.

That's how they make their money,not on the build Assembly quality! another form of Taxation,same as all the other extortionate Imports.

Who is they? The car companies?

Obviously the Thai Treasury! would be the recipients of Import Duty.

Edited by MAJIC
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...

That's how they make their money,not on the build Assembly quality! anothert form of Taxation,same as all the other extortionate Imports.

Who is they? The car companies?

Yes. The local producers can build a car that costs more than a vehicle of the same quality from overseas, and still sell it at a high margin and undercutting the imported competition, which has the added tariff to cope with. In this way, the local manufacturers are allowed to remain incompetent and fixed costs are absorbed in the local market, while vehicles are exported at avoidable cost only.

Furthermore, the exported vehicles are used to offset other imports, thus mitigating import tax for companies which have manufacturing plants here

SC

"Let me get this straight. The Thai government gives the import tax to the car makers in Thailand?

No. The Thai government makes imported cars prohibitively expensive. Competing models produced in Thailand can then be sold at an exorbitant price, paying for inefficient production, fast return on investments, or subsidising exports; or creaming off large profits.

Now it may be that locally produced cars are in fact very cheap in Thailand - markedly cheaper than imported vehicles; it may be that manufacturers that set up plants in Thailand don't try to gouge the prices as best they can, and that they don't use the competitive margin afforded by differential taxation to its maximum.

But certainly in Malaysia locally produced cars are expensive compared to cars elsewhere in the world, because they don't need to compete with cars in the rest of the world; they need to compete with cars which are imported with massive duties applied to them. So Malaysian car plants can be grossly inefficient, or they can achieve very rapid returns on capital through larger margins, or whatever.

SC

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Import Duties on Cars - From the Thai Customs Department can be found here [http://www2.customs....me=PersonalPer]

As you can see the total import taxes start at 187% and goes up to 328%.

That's how they make their money,not on the build Assembly quality! anothert form of Taxation,same as all the other extortionate Imports.

Who is they? The car companies?

Obviously the Thai Treasury!

You wrote, " That's how they make their money,not on the build Assembly quality! another form of Taxation,same as all the other extortionate Imports."

I wrote, "Who is they? The car companies?"

You wrote, "Obviously the Thai Treasury!"

This thread is not about how the Thai government makes money. How does the Thai treasury help the car companies produce cars?

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Lets say there is only one car company in Thailand and they make two cars a year. One is for domestic consumption and the other is for export. (which is proportionately correct 50/50 domestic and export).

The export car has to compete among other cars at the going competitive rate say 10,000. The other car is sold locally for twice the going rate of 20,000.

Is this what you are trying to say?

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I've seen some sh!t threads, but I have to say, this one takes the cake.

CMK very courageously took the party to defend and promote the country where he chose to live. Some of his arguments may be questionable but I applaud the initiative.

There is 'promoting and defending'. Then there is shooting yourself in the foot by being loose with your facts.

The title was nonsensical. There is no war in the auto's between Thailand and the UK. I dare say they don't even compete in the same markets. Partipate in the same supply chain, maybe. But that is about it.

Now we have a tit for tat over engineering standards. <deleted>?

Loose with what facts? Or are not able to quote? I liked the title. It got a lot of readership; you read it didn't you? It was a good title. Titles are supposed to encourage people to read not put them to sleep.

The auto market is global. Put a car on a boat, it is not going to spoil nor does it cost much to ship on a container ship. I sell a product in Thailand kind of like a car (steel and plastic and electrical stuff) all over the world from Italy to South America. Honest it is no problem. Shipping connections are good.

And there are all the secondary markets that service the auto industry millions of dollars, billions of baht. Everybody wants in on the action. Tires for example are French maybe or British. Your scope is too narrow. Machine tools. Computer controlled equipment and the service and repair of that equipment. Steel fabrication is big here. It would not be without the auto industry. It is not that the auto industry uses giant steel structures but they both use the same infrastructure.

There is a global trade war every day. You may call it what you like. You can call it competition or whatever but it is a no holds barred war. Ask the Chinese.smile.png

"it was a good title"

Self praise is no recommendation!

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