Thailand new hub for auto industry

[geriatrickid]

Now you can see why Detroit is a Ghost Town. Greedy, Western Manufacturers are all coming to Thailand and other developing Countries, in order to take advantage of slave wages and poor worker safety standards, in order to make more profits.

Your statement is both arrogant and ignorant. An important motive is to serve the local and regional market. The Thai vehicles will for the most part not be exported to North America or Europe. Thailand is one of the largest markets in the ASEAN group. Why shouldn't the local markets that purchase the vehicles participate in their manufacturing benefits? Honda and Toyota have built factories in North America to serve the North American market. You aren't complaining about that are you?

Perhaps in your view, the Asian market should be shut out of the automobile manufacturing sector, and forced to purchase from westerners. However, not everyone supports such an exploitive and selfish approach. Even more annoying, is that you are clueless as to what vehicles are built in Thailand. Most of the vehicles produced in Thailand are considered "too small" by western consumers who can't squeeze their morbidly obese bodies in to the small vehicles. Of course Honda would build its brio in Thailand, and of course Mazda would build its 3 series , which is intended for the Thai market, in Thailand. Suzuki is launching its Celerio in Thailand. It's a vehicle that wouldn't wow the western markets. How many westerners would want to purchase the MG6 because it was first launched in India? Well it will be built in Thailand for the Thai market.

The Thai automobile sector wages and benefits are pretty decent by Thai standards. How are the wages "slave" wages? Weren't you one of the people moaning and groaning when the minimum wage increased to 300 baht? Skilled workers in Thailand get more than that. Back when the wages increase, TVF was filled with people complaining. There were even papers from big shot exports like this guy; Dr. Surapa Amornviva led the charge with his lengthy interview article published in the other major English language newspaper, The Effect of Minimum Wage Hike on Auto Industry. He claimed Thailand's wages were too high; the wage increase has put additional pressure on profit margin and eventually eroded Thai auto parts competitiveness, especially among small suppliers. It is commendable that you are opposed to "slave wages". Do you generously tip service personnel? Do you gladly pay your cleaning lady 1000 baht per day? How about when you take in your laundry. Do you insist on paying 2X the rate, because you want to make sure the worker is fairly treated? Naw, I didn't think so. I suggest you start with managing your own affairs in Thailand first before you tell other people who have assumed the investment risk and who have put up the money, where they should invest.

So, yes, please explain, how it is that with these high wages that were supposed to crush competitiveness in Thailand, why Thailand is competitive? Do you think it has to do with the ease of doing business compared to China? Or do you think it is productivity or Quality? Thailand has worked long and hard to build its automobile manufacturing sector and it deserves some credit for a job well done.

Edited March 31, 2014 by geriatrickid

[BlackJack]

Now you can see why Detroit is a Ghost Town. Greedy, Western Manufacturers are all coming to Thailand and other developing Countries, in order to take advantage of slave wages and poor worker safety standards, in order to make more profits.

Australia subsidized its care industry to make jobs for over 60 years

not a good business model

[stoli]

Now you can see why Detroit is a Ghost Town. Greedy, Western Manufacturers are all coming to Thailand and other developing Countries, in order to take advantage of slave wages and poor worker safety standards, in order to make more profits.

And making cars, that maybe, you can afford to buy!

[kurtgruen]

Now you can see why Detroit is a Ghost Town. Greedy, Western Manufacturers are all coming to Thailand and other developing Countries, in order to take advantage of slave wages and poor worker safety standards, in order to make more profits.

Certainly not slave labour that's for sure - must be the highest paid workers in Thailand. As a business owner it is difficult to match the salaries offered to the car workers.

Well, show me some facts...in Canada CAW make over $50 per hour in wages and Benefits. How much do Thai Auto Workers make per hour and what kind of benefits do they receive? What about safety standards???

My wife owns two businesses here and I we also own a successful business in Canada. So yes, I am a business owner and I still make money, while treating people fairly and not as slaves!

[geriatrickid]

Now you can see why Detroit is a Ghost Town. Greedy, Western Manufacturers are all coming to Thailand and other developing Countries, in order to take advantage of slave wages and poor worker safety standards, in order to make more profits.

You really have absolutely no idea about the automobile manufacturing industry in Thailand, do you ? The safety standards within these factories are on a par with those in the West and the wages, especially for those with a marketable skill are exceptionally good. Even the run of the mill production line operator has a fair salary, very good bonus and benefits that exceed anything they could get by working at the majority of local companies.

The statement is generally true though. We used to build cars in the UK but we can't any more becuase of the property prices. 70% of the UK land owned by less than 1%. As long as they're getting their rent they don't care if all industry just stops in the UK. and manufacturing moves to Asia. The UK needs land reform or at least land taxes.

In the bigger picture this statement is true. Its why our politicians want to push for EU membership so the 1% can profit from free market. While the country goes bust.

Greedy, Western Manufacturers are all coming to Thailand and other developing Countries, in order to take advantage of slave wages and poor worker safety standards, in order to make more profits.

"We used to build cars in the UK but we can't anymore"...

It's not April 1st until tomorrow!

http://www.carmagazine.co.uk/News/Search-Results/Industry-News/CAR-tech-Britains-1bn-auto-industry-revolution/

Jaguar/LandRover is doing very well thanks, as are many many others.

Didn't you ever watch Top Gear - where all British auto manufacturers drove to the Mall of Buckingham Palace.

You'd be very surprised at how actually successful British manufacturing still is. 3rd largest manufacturer in Europe!

North American manufacturers also saw their profits soar over the past 2 years. Once the economy improved, people had some dosh to put a down payment on a new car.

[kurtgruen]

I see, I hit a nerve in a few "Fatcats" ;-)

Mmm..you are telling me that companies like Merzedez are not exporting parts and/or vehicles to Europe from Thailand?

Or how about Motorcycle manufacturers such as Triumph, who produce here and then ship them to Britain?

I still need so see actual figures of wages and benefits for Thai Auto workers. (I am not talking upper management, I am talking wages of the average production worker in the Thai plants.

I love it when people try to justify their own greed.

[Thait Spot]

This appears as likely in the current climate as the cow in the other thread producing a viable offspring.

[wilcopops]

I see, I hit a nerve in a few "Fatcats" ;-)

Mmm..you are telling me that companies like Merzedez are not exporting parts and/or vehicles to Europe from Thailand?

Or how about Motorcycle manufacturers such as Triumph, who produce here and then ship them to Britain?

I still need so see actual figures of wages and benefits for Thai Auto workers. (I am not talking upper management, I am talking wages of the average production worker in the Thai plants.

I love it when people try to justify their own greed.

Your basic mistake is to think the whole thing operates around the cost of labor.......you are taking a really simplistic and uninformed stance on this.

[antimedia]

Events to happen; new style of government with a massive debt inherited from the current mob, will see all populist policies scrapped, business tax incentives curbed, personal income tax hike and little infrastructure spending. Sounds like a great place to invest not.

[wilcopops]

Now you can see why Detroit is a Ghost Town. Greedy, Western Manufacturers are all coming to Thailand and other developing Countries, in order to take advantage of slave wages and poor worker safety standards, in order to make more profits.

You really have absolutely no idea about the automobile manufacturing industry in Thailand, do you ? The safety standards within these factories are on a par with those in the West and the wages, especially for those with a marketable skill are exceptionally good. Even the run of the mill production line operator has a fair salary, very good bonus and benefits that exceed anything they could get by working at the majority of local companies.

The statement is generally true though. We used to build cars in the UK but we can't any more becuase of the property prices. 70% of the UK land owned by less than 1%. As long as they're getting their rent they don't care if all industry just stops in the UK. and manufacturing moves to Asia. The UK needs land reform or at least land taxes.

In the bigger picture this statement is true. Its why our politicians want to push for EU membership so the 1% can profit from free market. While the country goes bust.

Greedy, Western Manufacturers are all coming to Thailand and other developing Countries, in order to take advantage of slave wages and poor worker safety standards, in order to make more profits.

" We used to build cars in the UK but we can't any more becuase of the property prices" - very bizarre!

​The UK actually builds MORE vehicles than ever before. Some people seem to have a very firm grasp ................ of the wrong end of the stick

[wilcopops]

They say things happen first in the US and then the rest of the world follows, well in the case of the motor industry, it was UK that set the pace......basically I have little respect for either the UK or US car industries of the last century. Management, engineers and Labor were almost to a man a bunch of buffoons and their myopic policies sealed their own fate

Edited March 31, 2014 by wilcopops

[kurtgruen]

I see, I hit a nerve in a few "Fatcats" ;-)

Mmm..you are telling me that companies like Merzedez are not exporting parts and/or vehicles to Europe from Thailand?

Or how about Motorcycle manufacturers such as Triumph, who produce here and then ship them to Britain?

I still need so see actual figures of wages and benefits for Thai Auto workers. (I am not talking upper management, I am talking wages of the average production worker in the Thai plants.

I love it when people try to justify their own greed.

Your basic mistake is to think the whole thing operates around the cost of labor.......you are taking a really simplistic and uninformed stance on this.

If it wasn't for cheap labor costs (I mean all labor costs, including pensions, medical, safety, etc.), most of those companies would stay in their Western Nations. After all, in the West, we have well trained workers, who can put out a quality product and the shipping costs are greatly reduced.

This whole "Global Economy", only benefits the rich. The poor are still poor, except now they have a lot more stress and have to work harder than ever before (in Asia, Africa, Central America, etc.)

Our middle class in North America is slowly getting wiped out, because the jobs and income aren't there anymore, because some greedy industrialists have decided to manufacture most of their parts overseas. Meanwhile the poor are still poor, in North America, too, except, now they don't have a hope in hell, at getting a decent job.

You have both Canada and the US, trying to introduce gun controls, to disarm the poor and middle class, because unlike the sheep, they know exactly what is coming, long before the

Meanwhile, you have politicians and the rich, speak of Nationalism, like it is a disease or a dirty word. Fact is, it is mostly the Nationalist Countries, who don't buy into the global economy, who are still doing well, while the rest of the Capitalist system is falling apart.

[NeverSure]

The problem with Thailand is that they don't own or invent anything. They are subservient to the inventions of others, including the methodology of manufacturing and not just the technology of the item itself.

That makes them vulnerable to the next low bidder, just as has happened to countries in the West.

Another problem for Thailand is productivity. Try to get the average Thai to buy into the concept of hurry.

Detroit? It's starting to boom again due to productivity.

Detroit Adds Manufacturing Jobs, Rises To Number Two Spot In Top U.S. Metropolitan Areas For Job Growth.

"Reversing the trend of the previous decade, Detroit has added more manufacturing jobs in the last two years than all but one other metropolitan area in the country.

A report released Wednesday from the think tank Brookings Institution, "Locating American Manufacturing: Trends in the Geography of Production," ranked 100 major metropolitan areas' manufacturing jobs growth from January 2010 through 2011. The Detroit metro area came in at number two, with a 12.09 percent increase, following Charleston, SC with 14.4 percent.

It's a big change from 2000 to 2010, when cities across the country lost manufacturing jobs, and the job growth in the South slowed. During that time, Detroit lost 52.1 percent of its manufacturing jobs, compared to the nationwide average of a 33.2 percent loss. But now, the report's authors say, the Midwest is seeing job growth in this area at a rate more than double the South.

Not surprisingly, the report lists Detroit's manufacturing specialties as transportation and machinery. While the auto industry's struggles drastically impacted jobs in the area, in the last two years Michigan industry created 34,000 new jobs." Link

Also, jobs are actually returning to the US in significant numbers. People in the West have a strong work ethic. Link

[Pib]

Now you can see why Detroit is a Ghost Town. Greedy, Western Manufacturers are all coming to Thailand and other developing Countries, in order to take advantage of slave wages and poor worker safety standards, in order to make more profits.

Cheaper labour, but cars are still more expensive in Thailand than say Australia.

Yeap, more expensive than the U.S. also. Why? The taxes applied by the Thai govt and I'm not talking the final 7% VAT; I'm talking the the excise/luxury/vehicle/import taxes applied. Yes, vehicles made in Thailand don't have import taxes applied but parts imported to make the vehicles are applied and then luxury/excise/vehicle taxes are applied. So many things in Thailand would be cheaper if it was not the taxes applied even before the items hit the store shelves, but these kinds of taxes are a major, major source of the govt's tax revenue in comparison to personal and other taxes.

Here's an example of Thailand excise tax on vehicles manufactured in Thailand. Link. Not sure if the tax applies to the whole vehicle or just the motor.

I expect the average Thai has no clue such excise taxes are being charged by their govt; they probably just think it costs that much to make a vehicle.

[geriatrickid]

Now you can see why Detroit is a Ghost Town. Greedy, Western Manufacturers are all coming to Thailand and other developing Countries, in order to take advantage of slave wages and poor worker safety standards, in order to make more profits.

Certainly not slave labour that's for sure - must be the highest paid workers in Thailand. As a business owner it is difficult to match the salaries offered to the car workers.

Well, show me some facts...in Canada CAW make over $50 per hour in wages and Benefits. How much do Thai Auto Workers make per hour and what kind of benefits do they receive? What about safety standards???

My wife owns two businesses here and I we also own a successful business in Canada. So yes, I am a business owner and I still make money, while treating people fairly and not as slaves!

CAW workers do not make $50/hour. Workers hired before the new contracts went into effect topped out at C $34/hour wage + $2-$3 health benefits +C$4 Pension benefits for a total of approx. $40/hour. It takes 6 years to get to that level. All new hires will now be paid significantly less. The trend is towards temporary workers for the unskilled jobs. New vehicles purchased from CAW factories also retail at $25,000 - $40,000. So, yes, wages are higher, but the vehicle costs are also higher. In Thailand, the wages are lower, but the cost of living is also much lower.

[belg]

what? no import duties for australia ? i guess the japanese will demand the same or move out

[kurtgruen]

Now you can see why Detroit is a Ghost Town. Greedy, Western Manufacturers are all coming to Thailand and other developing Countries, in order to take advantage of slave wages and poor worker safety standards, in order to make more profits.

Certainly not slave labour that's for sure - must be the highest paid workers in Thailand. As a business owner it is difficult to match the salaries offered to the car workers.

Well, show me some facts...in Canada CAW make over $50 per hour in wages and Benefits. How much do Thai Auto Workers make per hour and what kind of benefits do they receive? What about safety standards???

My wife owns two businesses here and I we also own a successful business in Canada. So yes, I am a business owner and I still make money, while treating people fairly and not as slaves!

CAW workers do not make $50/hour. Workers hired before the new contracts went into effect topped out at C $34/hour wage + $2-$3 health benefits +C$4 Pension benefits for a total of approx. $40/hour. It takes 6 years to get to that level. All new hires will now be paid significantly less. The trend is towards temporary workers for the unskilled jobs. New vehicles purchased from CAW factories also retail at $25,000 - $40,000. So, yes, wages are higher, but the vehicle costs are also higher. In Thailand, the wages are lower, but the cost of living is also much lower.

CAW likes to portray the total package around $30 per hour, Industry likes to say it's more like $70 per hour, so I picked the middle.

Now what about those figures of how much the average (new hire) production worker makes in Thailand's Auto and Auto parts manufacturing plants.

What about those who have worked there for a few years. How much does their labor and benefit package add up to per hour? How much is their employer taking of their check for the room they live in (or share)?

I am still waiting to see some figures.

[Kalbo]

Now you can see why Detroit is a Ghost Town. Greedy, Western Manufacturers are all coming to Thailand and other developing Countries, in order to take advantage of slave wages and poor worker safety standards, in order to make more profits.

You really have absolutely no idea about the automobile manufacturing industry in Thailand, do you ? The safety standards within these factories are on a par with those in the West and the wages, especially for those with a marketable skill are exceptionally good. Even the run of the mill production line operator has a fair salary, very good bonus and benefits that exceed anything they could get by working at the majority of local companies.

Holy crap what propaganda!! "...marketable skill are exceptionally good." Maybe we are talking about 2 different countries because that ain't Thailand.

Just the fact that a car was assembled in Thailand should trouble a potential buyer. I only hope none of the parts were made here.

Everything I have bought that was made in Thailand broke within 3 months.

Again, you have absolutely no idea what you are talking about. The auto manufacturing base here is massive (take a drive around Amata Nakorn, Eastern Seaboard or Amata City, to name but a few). Approximately 2 million automobiles were manufactured in Thailand last year, with about half of those being exported. Also, most of the parts for those automobiles were also made in Thailand.

[Gunna]

Now you can see why Detroit is a Ghost Town. Greedy, Western Manufacturers are all coming to Thailand and other developing Countries, in order to take advantage of slave wages and poor worker safety standards, in order to make more profits.

Cheaper labour, but cars are still more expensive in Thailand than say Australia.

Yes manufactured here and they have to fit "heaters" but still more expensive than the same model in OZ - WHY???

Different taxes may have something to do with it

Under the present excise tax structure, tax rates increase according to engine size on the assumption that larger engines consume more fuel. For example, a passenger car with an engine of 2,000cc or less pays a tax of between 22% and 30%, whereas a car with an engine of more than 3,000cc pays 50%. - See more at: http://www.tax-news.com/news/Thailand_Restructures_Vehicle_Taxes____58922.html#sthash.LfJoDJsL.dpuf

Taxes on new cars range from 9 per cent for Australian made vehicles to 36 per cent for the most expensive imports

[Bpuumike]

The use of the word "hub" for Thailand is driving me crazy.

I think the writers need to get a thesaurus.

Here let me help:

More words related to hub

center

noun. middle point

axis

bull's-eye

centrality

centriole

centrum

core

cynosure

equidistance

essence

focal point

focus

gist

heart

hotbed

hub

inside

interior

intermediacy

kernel

mainstream

marrow

middle of the road

midpoint

midst

nave

navel

nucleus

omphalos

pith

pivot

place

polestar

quick

radial point

root

seat

Yeah I like the world "omphalos". Lets have Thailand be the belly button of the auto industry for a change.

Most of the words on that list are inappropriate - I don't know if you are a native English speaker, but the problem with English is that as we are a German based language with another 50% or coming from other Languages - Latin-based mostly - as a result we have ended up with a massive amount of apparent synonyms.

The problem here is that these synonyms aren't actually always interchangeable; they convey different shades of meaning, subtexts, collocations and uses.

So what you really need to do is rather than just cut and paste a list from a Thesaurus, is look for alternative words that would fit and still coney the same meaning.

actually quite a pointless task, would you car to select some others that you think would be apt?

"Omphalos" is great - do you think it will catch on?

Good to know English is the hub of languages.

China could be the auto manufacturing hub if it wasn't for quality issues.

If Great Wall, for example, started manufacturing in Thailand then look out.

[wilcopops]

Now you can see why Detroit is a Ghost Town. Greedy, Western Manufacturers are all coming to Thailand and other developing Countries, in order to take advantage of slave wages and poor worker safety standards, in order to make more profits.

Australia subsidized its care industry to make jobs for over 60 years

not a good business model

ALL motor industries are govt subsidised

[wilcopops]

The use of the word "hub" for Thailand is driving me crazy.

I think the writers need to get a thesaurus.

Here let me help:

More words related to hub

center

noun. middle point

axis

bull's-eye

centrality

centriole

centrum

core

cynosure

equidistance

essence

focal point

focus

gist

heart

hotbed

hub

inside

interior

intermediacy

kernel

mainstream

marrow

middle of the road

midpoint

midst

nave

navel

nucleus

omphalos

pith

pivot

place

polestar

quick

radial point

root

seat

Yeah I like the world "omphalos". Lets have Thailand be the belly button of the auto industry for a change.

Most of the words on that list are inappropriate - I don't know if you are a native English speaker, but the problem with English is that as we are a German based language with another 50% or coming from other Languages - Latin-based mostly - as a result we have ended up with a massive amount of apparent synonyms.

The problem here is that these synonyms aren't actually always interchangeable; they convey different shades of meaning, subtexts, collocations and uses.

So what you really need to do is rather than just cut and paste a list from a Thesaurus, is look for alternative words that would fit and still coney the same meaning.

actually quite a pointless task, would you car to select some others that you think would be apt?

"Omphalos" is great - do you think it will catch on?

Good to know English is the hub of languages.

China could be the auto manufacturing hub if it wasn't for quality issues.

If Great Wall, for example, started manufacturing in Thailand then look out.

China do not have quality issues - look at the stuff they make for sale in the west.......if you specify quality in China, you get it,,,,,,if you specify crap...that's what you get.

As far as their motor cars are concerned - they are behind in design and technology on their own, but it will only be a mater of a few years before they storm the world market with their own products. they are getting plenty of practice building for the west already.

[Tomtomtom69]

Now you can see why Detroit is a Ghost Town. Greedy, Western Manufacturers are all coming to Thailand and other developing Countries, in order to take advantage of slave wages and poor worker safety standards, in order to make more profits.

Cheaper labour, but cars are still more expensive in Thailand than say Australia.

True - but that's largely a result of Australian government policy to remove duties and tariffs, such that imported models became so cheap that they undercut the price of the locally produced Australian models. Not only that, but consumers' increasing preferences for smaller, more fuel-efficient models that the Australian manufacturers (or their bosses) never decided to manufacture and an unfair Thai-Australia FTA, where Thai exporters are able to export Thai made Japanese vehicles to Australia at 0% duty (prior to the agreement I think the duties were only 5% or something fairly low like that) whereas Australian imported cars are still subject to up to 300% duties, even if the "import duties on Australian cars" "disappeared". So as you can see all these factors resulted in the Australian industry dying and Thailand's industry continuing to show strength mainly because of Thailand's highly protective automotive market policies. If Thailand followed Australia's lead, I'm quite sure that the Thai automobile industry would become unviable too - and exactly because of this, don't expect the 300% duties on foreign imported automobiles (and similarly quite high duties on CKD vehicles built in Thailand using imported parts such as some Mercedes models) to be removed anytime soon - lowered somewhat, perhaps, but eliminated entirely, not for years or decades, I'd say.

I can't explain why locally produced Thai cars for the Thai market are more expensive than their equivalents in Australia, North America and other countries though, other than the Thai government taxes them higher in order to prevent too many people owning a car and clogging up the roads even further? You might say this contradicts the government's previous policy relating to the tax rebate scheme in 2012, but I think the extra income for the government is both lucrative and a way of slowing down unsustainable growth in the automotive market, which would lead to even more congested roads.

Australia's population is 1/3 that of Thailand and has more than 15 times the land area. That means it has at least 45 times fewer people per sq km than Thailand and additionally, in the cities there is far more road space for vehicles than in Thailand - in Bangkok just 8% of city area is dedicated to roads yet 25% is required. I haven't seen the statistics for Sydney for example, but I'm quite sure it's around 25% - there are simply far more roads, including both main roads, connecting roads and residential streets, than in Bangkok. I'd be quite happy for the authorities to purchase half of say Nana, bulldoze the sh**hole and build some major connecting roads through there (perhaps also another expressway link or a skytrain-airport link connection), leaving some space for upper class hotels and/or condominiums, but unfortunately pimps, drug dealers and sleaziness are likely to remain in that area for now. In Thailand, while road widening is common in the provinces and various expressway "missing links" have been built over the years, I see absolutely no evidence of new road building. Of course, most new road construction would take place on the outskirts of the city where there's more room. I live on the outskirts of Bangkok, but nothing has changed - no new roads. Only at most, the addition of a new lane in each direction for a few km. That's a bandaid solution, not a real solution.

Edited March 31, 2014 by Tomtomtom69

[singlespeed]

After attending the Bangkok International Motor Show I can say that of all the shows I've been to around the world Thailand's motor show has the best looking booth babes. Frankfurt's show has nothing on them, nor did the shows in Australia.

[Tomtomtom69]

The use of the word "hub" for Thailand is driving me crazy.

I think the writers need to get a thesaurus.

Here let me help:

More words related to hub

center

noun. middle point

axis

bull's-eye

centrality

centriole

centrum

core

cynosure

equidistance

essence

focal point

focus

gist

heart

hotbed

hub

inside

interior

intermediacy

kernel

mainstream

marrow

middle of the road

midpoint

midst

nave

navel

nucleus

omphalos

pith

pivot

place

polestar

quick

radial point

root

seat

Yeah I like the world "omphalos". Lets have Thailand be the belly button of the auto industry for a change.

Most of the words on that list are inappropriate - I don't know if you are a native English speaker, but the problem with English is that as we are a German based language with another 50% or coming from other Languages - Latin-based mostly - as a result we have ended up with a massive amount of apparent synonyms.

The problem here is that these synonyms aren't actually always interchangeable; they convey different shades of meaning, subtexts, collocations and uses.

So what you really need to do is rather than just cut and paste a list from a Thesaurus, is look for alternative words that would fit and still coney the same meaning.

actually quite a pointless task, would you car to select some others that you think would be apt?

"Omphalos" is great - do you think it will catch on?

Good to know English is the hub of languages.

China could be the auto manufacturing hub if it wasn't for quality issues.

If Great Wall, for example, started manufacturing in Thailand then look out.

China IS the world's automotive manufacturing hub, manufacturing about 19 million vehicles in 2012. Please see wikipedia's article on this issue for more details or google it. In fact, I expect far more growth in China, which will lead growth to the point of potentially pushing out more inefficient manufacturers in nearby countries. A new Ford plant is going up in Hangzhou, that the son of a good friend is in charge of. That plant alone is expected to build 850,000 vehicles a year within just a short time, a figure that represents about 40% of Thailand's total capacity just from one plant alone!

Few people consider Thailand an automotive manufacturing hub, though it is a major regional one at least. However, the growth potential in Thailand is not exponential - regional countries are starting to build up their own industries and despite the advent of the AEC, I somehow doubt that either Thailand or other regional automotive players such as Malaysia and Indonesia are suddenly going to reduce all tariffs and thus threaten their local automobile manufacturing industries - though some minor concessions might be given, for example, Malaysian Perodua and Proton cars, long absent from the Thai market despite being Malaysia's neighbor (now they're finally here) may be imported and given special incentives provided Thai pickup trucks are given reciprocal treatment in Malaysia. Anything else that would allow tariffs to be reduced almost to 0 like in Australia's case though is highly, highly doubtful. While not exactly related, just consider the GMS cross border transport agreement that Thailand, Cambodia, Laos, Vietnam, China and Myanmar signed back in 2001? or something like that. It specifies that vehicles from each member/signatory country can cross into any other member country for temporary goods transport and private purposes and I'm talking about trucks and cars. What's the reality? Myanmar refuses entry to foreign registered vehicles from any country except for private and goods vehicles on day passes near the border, Vietnam refuses all Thai vehicles due to being RHD, Cambodia doesn't really want Thai cars and refuses them at many borders (although some Thai buses and trucks are now allowed to travel to Siem Reap and Phnom Penh), China only allows Thai cars in with a guide and tour, but Chinese cars can enter Thailand without any special requirements at all. Fair? No, but it's the way it is!

Edited March 31, 2014 by Tomtomtom69

[impulse]

I can't explain why locally produced Thai cars for the Thai market are more expensive than their equivalents in Australia, North America and other countries though, other than the Thai government taxes them higher in order to prevent too many people owning a car and clogging up the roads even further?

The reason Thai made cars are so expensive is because they only have to be a little cheaper than the competition. Since the imported competition is taxed to death, the Thai manufacturers should have a windfall.

But the more common result is a lazy industry, bloated and inefficient. US auto makers had the same type of deal before the Japanese came in in the '70s- making garbage for which they could charge whatever they wanted. Unfortunately, they'll never shake off the legacy expenses from the "good old days"- the players are just too well entrenched.

I'm forecasting Thailand won't be a significant force in the international auto market until their manufacturers are forced to compete on a level playing field- and get better for doing so. Until then, they'll be a blip on the screen, filling a few tiny niches.

Besides that, can anyone name one Thai auto company with any market penetration at all? Not a Japanese, Euro or US company that manufactures in Thailand, calls all the shots and repatriates the profits....a Thai brand.

[Tomtomtom69]

Now you can see why Detroit is a Ghost Town. Greedy, Western Manufacturers are all coming to Thailand and other developing Countries, in order to take advantage of slave wages and poor worker safety standards, in order to make more profits.

You really have absolutely no idea about the automobile manufacturing industry in Thailand, do you ? The safety standards within these factories are on a par with those in the West and the wages, especially for those with a marketable skill are exceptionally good. Even the run of the mill production line operator has a fair salary, very good bonus and benefits that exceed anything they could get by working at the majority of local companies.

Holy crap what propaganda!! "...marketable skill are exceptionally good." Maybe we are talking about 2 different countries because that ain't Thailand.

Just the fact that a car was assembled in Thailand should trouble a potential buyer. I only hope none of the parts were made here.

Everything I have bought that was made in Thailand broke within 3 months.

I don't see anything wrong with Thai produced foreign vehicles (well all of them are as there are no local Thai brands. Thairung was the closest to being a local brand but what happened to them?) However, it's interesting to note the attitude towards Thai products amongst consumers in neighboring Laos, long the country with by far the highest share of Thai imports (66% of the economy in some years). That seems to be changing. Despite proximity and ease of logistics, Toyota Hilux VIGO vehicles produced in Thailand are no longer the only Hiluxes on Lao roads. South African? or are they Chinese manufactured Hiluxes, branded simply as Toyota Hilux and NOT VIGO are now commonplace in Vientiane. About 1 in 2 of the new Hiluxes on the roads in Vientiane is now a non-Thai produced Hilux. It appears to be the same with Ford Rangers.

Mahindra, an Indian manufacturer whose products I have not seen anywhere in Thailand are breaking into the Lao market big time. Dealerships are springing up and their range of pickups and SUVs are quite popular. Chinese makes such as Great Wall, BYD and QQ are quite popular in Laos too. With no local industry to protect, Laos' automotive market is much more fragmented than Thailand's where you see few "fancy" cars as my Vietnamese friend me last time he visited (even though he's been to Thailand about 10 times now). He's right though, due to Thailand's protectionist automotive market, everyone in Thailand drives what you're driving. There are literally only about 8-10 models produced by 5-6 manufacturers on the roads with less than 1% of the population driving something more interesting like say a Volvo, Skoda, BMW or Mercedes. Newly rich Lao drive Porsches, Maseratis, Range Rovers and Landcruisers, few of which you see in Thailand (they exist of course, but on an average day you probably won't see any unless you go to the ground floor of the Paragon car park where 20 of them will be parked. By comparison, all the fancy cars parked at Udon Thani's central shopping mall are Lao registered, making the Lao appear richer than their Thai counterparts!)

Thai seafood is no longer as popular as it used to be in Laos - Vietnamese seafood has started to replace Thai seafood in Vientiane markets. This may be a blessing in disguise as a long time Lao expat, who once lived in Thailand tells me (although he has fairly anti-Thai produce views anyway) that Thai seafood producers use steroids and formaline (this one I've heard about on the news here too) the latter for preservation all of which are illegal and highly dangerous, hence a good reason to steer clear of such produce if it's true and is widespread. Apparently Vietnamese seafood doesn't use any of these techniques. Indeed, I've never been disappointed by the taste of Vietnamese seafood.

[allan michaud]

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Now you can see why Detroit is a Ghost Town. Greedy, Western Manufacturers are all coming to Thailand and other developing Countries, in order to take advantage of slave wages and poor worker safety standards, in order to make more profits.

While your point is valid in a general global sense, the fact is the major car producers here so far are for the most part Japanese, not American. I actually think the main problem is as it was in the UK a couple of decades back. Then the UK was producing crap cars that were unreliable, while the Japanese were producing cheaper and better cars. As a consequence the British car industry tanked, leaving just a few small scale companies like Rolls Royce and Lotus, which is still known by many as meaning Loads Of Trouble, Usually Serious.

[Benmart]

I prefer to adopt the "Wait and see" approach to this new hub of industry.

[bigbamboo]

Thailand is already the 9th largest motor industry in the world, exceeding such countries as Spain, France and UK.

They don't just assemble vehicles, they have a large industry that manufactures the parts here in Thailand.

Initially Thailand produced "labor intensive" models as it could supply cheap semi-skilled labor.....that is changing and in the future they need to develop the more "hi-tech" production side of the industry, which requires higher skills and wages but less staff.

Labor costs are not everything of course...PRODUCTIVITY is other factor - high productivity can support higher wages but is likely to demand less workers.

PRODUCT is of course important and many industries have scolloped because they don't have a marketable/sellable/desirable product.

The Australia market is not very big and already being supplied by Thailand.....so to increase exports here will require models to replace Holden, Ford and Toyota who were manufacturing rather large vehicles not sellable anywhere else.

I'd say that Toyota are in the best position here as they know that market very well and have the resources to target it with suitable models.

I think there are a lot of posters on TV who have no idea of the size of Thailand's industrial base......all they need to do is take a trip around Chonburi and Rayong provinces and they will see how massive it is.....in short they need to get out more

Monkey see, monkey do. You show the Thais how to make something and they will bang them out all day long..... and cheap cheap too.

Edited March 31, 2014 by bigbamboo