Thailand close to achieve 3mn auto production milestone

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ECO CAR
Thailand close to achieve 3mn auto production milestone
The Nation


Nissan March is the first eco car produced in Thailand.

BANGKOK: -- THAILAND IS on the road to hitting the target of 3 million vehicles produced annually by 2017, with automakers showing overwhelming interest in the second phase of the eco-car scheme.

"The response has been better than expected, reflecting their confidence in Thailand's potential as a global automobile manufacturing hub," Udom Wongviwatchai, secretary-general of the Board of Investment, said yesterday.

By Monday's deadline for applications for Phase 2 of the government's eco-car programme, 10 car companies had committed to investing a total of Bt139 billion for the production of 1.5 million units per year, according to the BoI.

Five are already participants in the first phase - Toyota, Honda, Nissan, Suzuki and Mitsubishi. The newcomers include General Motors, Ford, Mazda and Volkswagen, which will produce its Beetle locally for the first time.

While the existing players plan to invest Bt86.8 billion for the production of 753,000 vehicles per year, the newcomers plan Bt52 billion for 828,000 units.

The qualification report will be completed and ready for approval by the new Board of Investment, which will be appointed as soon as a permanent government takes office.

According to Thai Autobook Research, Volkswagen Group is set to assemble 300,000 Beetles here for delivery next year at a price of Bt388,888. With a market share of 0.04 per cent last year from selling 600 units, the German firm hopes to boost its domestic share to 15 per cent.

The political turbulence had been feared as a threat to kill the eco-car project. Research firm IHS Automotive forecasts domestic sales to fall 19 per cent to 1.08 million units this year, while production will slip by 8 per cent to 2.2 million units.

However, the outlook for overall investment has been dented by the political stand-off.

According to the BOI, in the first two months of this year, applications for foreign direct investment decreased by 40 per cent in number to 121 projects and 43 per cent in value to Bt47.3 billion from the same period last year.

Thailand is the largest auto manufacturer in Southeast Asia and ninth-largest in the world, with about half of its output sold domestically and the other half shipped overseas. Thailand has been used as a production hub for exports to Asean and beyond.

Colin Kinghorn, the ASEAN Head at Ipsos Business Consulting, points out that the growth engine of the global automotive industry is now the emerging markets.

"After the global financial crisis, they overtook developed markets in overall vehicle sales, and are forecast to account for two-thirds of global production next year," he said.

Consumer demand for eco cars is also growing in emerging markets, and the manufacturing industry is developing new processes to address demand profitably, spurred on by government incentives in China and some South East Asian countries, including Thailand.

"Automotive manufacturers are focusing on lower-priced models for emerging markets, entailing more efficient manufacturing processes and standardised parts" said Kinghorn. "Toyota, for example, plans to use just three types of chassis for multiple vehicle models and ultimately standardise some 80% of parts. We can also expect an increase in partnerships and alliances, both among carmakers and across industries."

But Ipsos notes that rapid technological development and new strategic alliances are not enough. The policy and regulatory environment has not kept pace, and the industry must work closely with governments to facilitate the birth of the cars of tomorrow in our region.


-- The Nation 2014-04-02

[JesseFrank]

Shouldn't the thread title read : Foreign car manufacturers are close to achieving a 3 million car production in their plants in Thailand.

[maamoot]

"Beetles here for delivery next year at a price of Bt388,888"

That seems too good to be true

[londonthai]

only the last year thailand got over 2mln made cars which placed it 10th the biggest car producer in the world.

I would think they need much longer than 3 years to increase production by almost 30%.

with an increased production and lower demand, prices are set to go dawn

[Choonpon]

No need eco cars. Just solve the issue of forest/veg burning asap, that will ease the air pollution alot!

[londonthai]

eco is not for "ecology" but for "economic" (low fuel use, cheaper running)

[Familyonthemove]

"Beetles here for delivery next year at a price of Bt388,888"

That seems too good to be true

Yes - I'd have a Beetle for 388,888! Must be a typo ..... like the 'Nissan March' title to the photo of a Mirage.

[bigbamboo]

"Beetles here for delivery next year at a price of Bt388,888"

That seems too good to be true

Depends if you want a real one.

[belg]

if i was any other country, i would impose 307% tax on all cars made in thailand, same same as thailand does with imported ones here