Thailand sees car manufacturing boom

[bazmlb]

At a high-tech factory in the world's fastest growing vehicle production hub, industrial robots and white-suited workers put the finishing touches to hundreds of cars rolling off the assembly line each day.

It could be a scene from Toyota City or Detroit, but this is Thailand, a country better known around the world for its beaches and rice paddies.

With major car makers hit by a global economic downturn, the Southeast Asian nation has emerged as a rare bright spot in recent years.

Thailand's auto production surged 70 per cent in 2012 from the previous year, to 2.48 million vehicles, according to the Paris-based International Organisation of Motor Vehicle Manufacturers.

In contrast, China and India saw only single digit gains. While, in Australia, major car manufacturers Ford and General Motors' Holden are shutting up shop.

Thanks to major investment by Japanese producers as well as US giant Ford, Thailand is Southeast Asia's most prolific car maker, streets ahead of nearest-rival Indonesia.

Last year, it exported about one million vehicles.

Domestic sales also continued to surge in the first six months of 2013, although they have since slowed as the number of first time buyers lured into the market by tax breaks tails off.

It is a general growth trend mirrored across much of the region as people switch to cars from motorcycles.

Despite worries about Thailand's wider economic fortunes, car makers remain bullish about the kingdom's long-term prospects and have pumped hundreds of millions of dollars into high-tech new plants to prove it.

"There might be black clouds and there might be problems, but overall the car industry is driven by people... people with two wheels who want to get four wheels," says Uli Kaiser, president of industry analysts the Automotive Focus Group Thailand.

"I don't see that desire to stop, and I see Southeast Asia as the strongest growth territory in the world."

As the battle for market share intensifies, big car makers -- many from Japan -- are ploughing cash into new plants determined to sell more vehicles to Thailand's burgeoning consumer classes and take advantage of its location in the heart of Southeast Asia's export markets.

At a Honda factory on the outskirts of Bangkok, it takes three days to fully assemble a new car. More than 1,100 drive off the production line every day.

The Japanese maker is aiming to churn out 420,000 vehicles a year in Thailand by 2015, when a new $US644 million ($A722.42 million) car plant is expected to open outside Bangkok.

It is a far cry from 2011 when floods swamped much of the country and shut down the industry for weeks, raising fears automaking behemoths could shift their operations.

"We were severely affected... If we were a small company we would have gone bankrupt," Pitak Pruittisarikorn, executive vice president of Honda Automobile Thailand, said.

"But from the company that was affected most, we came back to be the company that has the highest growth. Now Thailand is the biggest Honda production base in the (Asia) region and will be in three or five years from now."

Last month, rival Toyota started production at a sprawling $US340 million assembly plant, its fifth in a country where it sold more than half a million vehicles last year.

The company says it will eventually make 770,000 vehicles -- from passenger cars to vans -- on Thai soil each year.

The group, which employs 13,500 people in Thailand and whose pickup trucks are ever-present on its motorways, is determined to stay in pole position.

"We have to keep our market share... We can keep between 35 and 40 per cent," said Kyoichi Tanada, president of Toyota Motor Thailand, outlining his belief that Thai consumers will continue to buy around 1.2 million vehicle each year.

Nissan meanwhile has pledged to open a second factory costing $US360 million next year, which will eventually produce 150,000 vehicles annually.

Thailand's car boom has been in part steered by the nation's government which gave the sector a shot-in-the-arm after the floods with its "first car" policy, garnering around 1.25 million orders for new cars qualifying for a tax rebate of up to $US2,500.

The "Golden Year" of 2012, was followed by a record first half, but sales have since waned as fears over household debt mount and banks tighten credit lines, prompting many orders under the scheme to be cancelled.

Even so, analysts see a bright future for the Thai car market, predicting 10 per cent annual growth in the coming years.

It is a projection that will delight car manufacturers, but promises more frustration for Bangkok's traffic-weary motorists.

-- (c) Copyright AFP 2013-12-25

[CIHUAHUA]

This is what Thailand needs it brings them out of the one-horse economy. The Thai people need some secure factory jobs and since they love tech they should do very well.

[steveromagnino]

This is what Thailand needs it brings them out of the one-horse economy. The Thai people need some secure factory jobs and since they love tech they should do very well.

You do know there are more people working in factories than in the fields for almost 10 years now?

[tingtongteesood]

But the government needs to stop the factories from flooding - and not at the expense of everyone else flooding instead....

[superdome]

What.....and Toyota are pulling out of Thaind...<deleted>

[falangadang]

"At a high-tech factory in the world's fastest growing vehicle production hub"

Is that a newly declared hub or one which already was well seated in the crown of the claimed hubs of Thailand?

This seems a bit of a contrast to the story yesterday that Toyota was moving Vios and Yaris production to Malaysia!!!

[Rinrada]

Think it was Indonesia but will check......how many people over there..?

[little mary sunshine]

An attempt to "spin" the fact that Toyota is pulling out of Thailand.

[Wong!]

Toyota are not pulling out of Thailand.

[MadMac]

Toyota is moving the manufacturing of the Vios from Thailand to Indonesia. That is THE export car, besides local market. So they are pulling out.

[Wong!]

^ Not if you understand English it isn't.

[IMHO]

This is what Thailand needs it brings them out of the one-horse economy. The Thai people need some secure factory jobs and since they love tech they should do very well.

You seem to have a real good handle on the Thai economy

[IMHO]

Toyota is moving the manufacturing of the Vios from Thailand to Indonesia. That is THE export car, besides local market. So they are pulling out.

Care to enlighten us as to where the VIOS exports to, and how it's export numbers compare to other domestically produced models? There must be a big, secret, underground production and export program going on that I don't know about if it's THE export car

Edited December 25, 2013 by IMHO

[louse1953]

^ Not if you understand English it isn't.

LOL

[ozyjon]

I hope the manufacturing continues as sales of new cars slow world wide, the problem is the cost of fuel and i see more hybrid cars on the market and sales of these cars are rising and they are manufactured here in Thailand, good to see the work for the locals and rising exports.

[IMHO]

I hope the manufacturing continues as sales of new cars slow world wide, the problem is the cost of fuel and i see more hybrid cars on the market and sales of these cars are rising and they are manufactured here in Thailand, good to see the work for the locals and rising exports.

Global car sales are slowing?

Geez, our databases must be woefully out of date

[MadMac]

You can read it yourself folks. Don't blame the messenger

http://www.nationmultimedia.com/business/Toyota-to-shift-Thai-output-base-to-Indonesia-30222597.html

[Issanman]

Think it was Indonesia but will check......how many people over there..?

The population of Thailand is about 67 million.

The population of Indonesia is about 247 million.

Toyota may be able to sell a few more cars over there than here.

[IMHO]

Oh boy, there's just so many inaccurate posts in this thread I don't even know where to start, LOL. So I won't

[Gomyway]

It'll be to good to be true ... http://www.reuters.com/article/2013/09/22/us-thailand-autos-idUSBRE98L0JJ20130922

[Spoonman]

You can read it yourself folks. Don't blame the messenger

http://www.nationmultimedia.com/business/Toyota-to-shift-Thai-output-base-to-Indonesia-30222597.html

They plan to make 1000 Vios's per month.....

to me that reads they are building for the Malaysian domestic market and not for export and at that those numbers I don't see how it was "THE export" vehicle for Toyota Thailand as I'll bet the Vigo/hilux is their primary export vehicle.

[MadMac]

1000 for a start. Indonesia is a huge market for sure. But Toyota would not run 2 plants for the same car. So Thailand will be closed when Indonesia is at capacity. Leaves the pickup market. I assume they make cars for Australia and the rest of Asia too. Aussieland is closing down capacity as well. Not sure where it goes. But there are some changes going on.

[Wong!]

^ You really are mad.

[OZEMADE]

First it was Ford to finish production in Australia, then it was Holden to finish and now Toyota have now announced today they are finishing up in Australia in 2017. However Ford and Holden have announced that they will be laying off workers earlier than they stated earlier. It is estimated that this will effect 30,000 workers at Toyota alone. The manager of Toyota stated that the decision is irreversable and a hand out from the OZ Gov will not and would not make any difference. The decision to finish in Australia is final. I am not sure, but I think there are no other car manufacturers in OZ?

Seeing how Thailand got to manufacture Ford for OZ, they may now have to start up the Toyota plant again and make the extra for OZ as well.

Edited February 10, 2014 by OZEMADE