Thailand remains primary automobile producer in Southeast Asia

[lahgon29]

Anyway, shouldn't that read:

Japan remains primary automobile producer in Southeast Asia

No...Japan is not in S.E.Asia.

UbonRatch , I think, means that Japanese companies are the primary producers, hence the "giggle". It's humorous. Obviously lateral thinking is not your forte.

[attento]

Inward Investors like stable government. The military could provide that (not saying they will) , unlike the dog fight and childish antics which existed before.

[sputjam]

"Indonesia set to overtake Thailand as Southeast Asia's biggest car market in 2014"

Indonesia is like india. They put their national interest above that of investors. They may give contracts to build power plants,airports,harbours etc, but it will be stuck in corruption charges in the courts. Local competitorsuses thecourts to kill foreign competiton. It may be you power station, ports, factories etc, but its their country.

[Gomyway]

How long will the cheap labor-driven industry last?

Maybe this from a german forum (translated by Google-Translate) can give a little bit insight, also don't forget that robots are able to work even when there's a curfew:

https://www.aktionaersforum.de/-/rationalisierungsboom-fur-roboterhersteller-kuka

Rationalization boom for robot manufacturer Kuka

Ironically, because the economy dies down in the emerging markets, the Kuka robot builders posted record orders. Also why shareholders should ask a crucial question their management at today's AGM.

They make stock traders at Goldman Sachs competition. They carry iron ore from the mines at Rio Tinto. They patrol the cell blocks Korean prisons. And they maintain Japan's pensioners: The use of robots seen in six after the financial crisis, a boom that anything previously seen before in the shade. Also the robot Kuka specialist in Augsburg, which calls for the general meeting today, reports record shops.

A year ago Kuka CEO Till Reuter had reported to shareholders on its balance sheet for 2012 of the "most successful year in the Kuka history." And now, from January to March 2014, the company took more orders than ever opposed. The orders came primarily from companies in the auto industry and the aerospace industry, increasingly, from those in the emerging markets. And probably not least because there the previous economic boom, more and more cools.

The argument may seem surprising at first glance. But for Kuka prove just those emerging markets as a new strong driver in business, where growth decreases and the decrease rates of profit. Because of Moscow, Beijing and Sao Paulo to Mumbai to growing precisely because of the pressure to automate - and Kuka robot should help.

In addition, hundreds of millions of new consumers in emerging markets demand better products after the first shopping experience. Result: The emerging market companies are upgrading technical.

This does not mean that the business is lame in the West. On the contrary. The Robotic Industries Association (RIA) in the U.S. reported a few days ago, the first quarter of 2014 was the second best of all time in North America. "The growing interest in the automation combined with a renaissance of manufacturing in the USA gives us an excellent business," said RIA President Jeff Burnstein.

According to Burnstein another factor to the boom helps. Many companies in this country who had previously moved production to the Far East, think again: because the domestic markets in North America and Europe require a more flexible production and ever shorter reaction times, a part of the production is shifted back. Thus, this "back-shoring" makes economic sense, the production machines must force the pace and speed up the exchange between different product variants. But the use of robots in this country remaining of the production areas may make sense - and support the workers there.

Technical progress is noticeable. For a long time could only control robot programmed weld points on the car assembly line or sneak on marked paths through factory buildings. Meanwhile she can allay high shelves, derived from Google's announcements buy orders for stocks and even sell meat in supermarkets. In plain English: Increasingly, service jobs are replaced by machines now.

In the Chinese province of Heilongjiang, for example, there is the world's first fully automated restaurant where robot wireless orders accept, cook and bring the prepared food to the correct table since April. The conquest of the robot has thus extended far beyond the assembly lines of the auto industry. According to a report by David author at the Center for American Progress, the recent recession has accelerated the elimination of jobs rapidly, which can be easily automated. Nationally, went in the years 2007 to 2009, the number of simple jobs, such as the discharge of the post, at 8 percent.

General Motors, for example, being developed in conjunction with NASA a glove for workers in production lines. For all those which can be monotonous routine movements, the hands often to tire after a short time. The "K-Glove" to the employees, therefore, be placed over the hand and help as Robo-glove frequently repeated movements easier and more accurate to perform. Muscles, eyes and nerves of the assembly line worker are therefore supported for increasing accuracy and productivity with sensors, cameras and actuators.

Also, the growing profit squeeze in other industries fueled the automation, additionally. Rio Tinto, for example, the second-largest producer of iron ore world brings, currently its transport links between the mines in Australia on front. Target is the full automation of the company's rail network in the north-west of the continent. The 1500 km rails with the loaded wagons are to be controlled from a control room in Perth two-hour flight away. The goal is an increase of the output of mines by 60 percent by the year 2015.

It is also important to balance the rampant lack of suitable staff. The boom in the mining industry in Australia alone has led to approved investment of 230 billion dollars. The sweeps the labor market in the sector completely empty. Result: The wages for scarce workers are climbing rapidly that even drivers of the trucks that bring raw materials from the mines can earn $ 100,000 a year.

Comparable cost pressure also prevails in the shipping sector. Especially in online trading. When Internet companies like Amazon pull robots en masse into the warehouses. From the high shelves they get ordered product and bring it into the shipping departments of the online companies - without a break, without change of shift, without disease - and that too with fewer errors. Investments in such robots have increased since the end of the Great Recession in the U.S. massively by over a quarter, then you also know at Kiva Systems in Boston. There, those robots are produced.

The orange "Kivaner" look like a flat output of R2D2 robot from Star Wars, for which there is also a Lego version. Kiva was purchased two years ago for $ 775 million from Amazon, in order to increase the automation in the distribution centers. The search engine company Google bought eight robot companies last year alone.

Whether shareholders at the Annual General Meeting today Kuka ask the question, when Google could buy also your company? Whether there have been contacts? And how has the management else already prepared for this?

[wilcopops]

Anyway, shouldn't that read:

Japan remains primary automobile producer in Southeast Asia

No...Japan is not in S.E.Asia.

UbonRatch , I think, means that Japanese companies are the primary producers, hence the "giggle". It's humorous. Obviously lateral thinking is not your forte.

it would appear that sarcasm goes over your head too....but it was intended to underline that the comment was facile as the companies that are "japanese " in Thailand are majority Thai owned and most of the parts manufacturers are totally Thai, it is far too simplistic these days to judge a book by its cover. (I hope I don't need to explain that too.)

[bigbamboo]

Anyway, shouldn't that read:

Japan remains primary automobile producer in Southeast Asia

No...Japan is not in S.E.Asia.

UbonRatch , I think, means that Japanese companies are the primary producers, hence the "giggle". It's humorous. Obviously lateral thinking is not your forte.

it would appear that sarcasm goes over your head too....but it was intended to underline that the comment was facile as the companies that are "japanese " in Thailand are majority Thai owned and most of the parts manufacturers are totally Thai, it is far too simplistic these days to judge a book by its cover. (I hope I don't need to explain that too.)

Yeah, the Japanese are really going to risk the reputation of one their top rank companies by handing control over to a country who've never built a decent car and can't get trains to go in a straight line even with rails to run on.

Japanese expertise, Thai labour.

[fasteddie]

And yet, according to all the yellow bellied coup loving anti democrats on here, PTP has apparently wrecked the economy! Still no one expects the truth from fascists!

[fasteddie]

Thailand is a great place to make automobiles and this is why MG(Shanghai Automotive and CP) are setting up and several other brands are considering to set up ie VW. Once the politics are smoothed out, we can expect a roaring 2015 onwards for the programs that are scheduled and for newcomers as well.

"Once the politics are smoothed out" - now there's a thing.

I think it is more a case of "despite the politics"

Capitalists don't care about politics.

[Thai at Heart]

I think for now, Thailand's position as leader of ASEAN manufacturing will continue to remain in place at least in the short to medium term, but given my knowledge of the regional automotive industry and what I take from the above report, I'd like to make the following comments/observations:

One of the reasons why Thailand may lose Indonesia as a market, although perhaps it was never very strong in Indonesia to begin with are different consumer preferences. For example, while Thailand is the world's largest one ton pickup truck producer (I always thought it was number 2 after the USA, but perhaps Thailand has recently overtaken the USA in the one ton category, while the USA is still the largest pickup truck market overall, however their pickups, like most other vehicle types are much larger than their Thai counterparts hence they aren't exactly in the same category), and Thais love their pickup trucks, Indonesians don't.

They [indonesians] seem to despise pickup trucks, because I can't remember seeing a single pickup truck anywhere in Jakarta when I traveled there a few years ago - by comparison, pickup trucks have gained popularity in Malaysia and Vietnam, two markets where they weren't common about a decade ago. This was a great surprise to me, I would have thought a country like Indonesia, with it's large rural agricultural population that is also middle income like Thailand (although lower middle income and thus a bit poorer than Thailand with a lower GDP per capita) would take to pickup trucks as they are convenient for hauling goods to/from their farms or businesses. Evidently not, because Indonesians seem to like MPVs such as small people movers like Toyota Innovas, which are produced locally and exported to the rest of the region, including Thailand. Innovas are present in Thailand in sizeable numbers but aren't that popular as Thais would rather jump from a sedan to an SUV or a pickup, depending on need rather than an MPV that is little more than a boxy sedan which is quite cramped with little more storage space than a large sedan when filled to capacity. Still, the automotive market is quite diverse in Thailand, which sees most types of vehicles well represented, except for large American style pickups, most of which are rarely seen in RHD markets like Thailand anyway.

Similarly, I believe the Indonesians are producing Corolla's and possibly Camry's (would have to check that info) that are equivalent to Thailand's own production therefore it makes little sense for Thailand to export the same vehicle makes and types that are already being produced locally and vice versa. It's for these reasons that I see Indonesia continuing to export MPVs to Thailand, but Thailand probably not being able to export anything to Indonesia, save for perhaps eco cars (that could also come out of Malaysia).

As for Indonesia becoming ASEAN's largest automotive market, this shouldn't be a surprise given that Indonesia's population is almost 4 times the size of Thailand's and with expanding GDP growth, that country will continue to widen the lead in vehicle sales if Thailand's political and associated economic situation continue.

I think that the Reuters report is right in that continued economic woes due to the political situation (and uncertainty related to the political situation) will continue to be closely monitored by the automakers, which could, in the event of continued instability decide to forego further investment or even pull out of Thailand and relocate, but given previous instability and recovery which took place in the aftermath, not to mention the favourable infrastructure and investment policies of the various Thai administrations (and continuing lack of these things in competitor markets like Indonesia), most automotive manufacturers in Thailand are likely to stay put for now. I see this possibly changing should the situation continue to remain unstable, or potentially even getting worse over the next year or so.

However, I wouldn't place my bets on the manufacturers definitely keeping to their commitments (based on historical pickups in demand, after previous coups, political conflicts etc.), given changing circumstances. Although the circumstances were very different, in Australia's case Holden had originally promised to keep on manufacturing through 2022 as they had stated only a couple of years ago. Now that has been revised back to 2017 after they decided to pull out of Australia altogether, announcing the move last year. A tough decision despite a 60+ year manufacturing history in the country and the same can be said for Toyota, with it's 50-odd year history of manufacturing in Australia when they decided to follow in Holden's footsteps by making a similar announcement earlier this year.

Still, I think it will take a significant competitor in ASEAN to shift away from Thailand with comparable (or better) investment policies and infrastructure to take over Thailand's helm, especially in the area of pickup truck manufacturing, which represents around half of all vehicles manufactured. That's because while Myanmar, Laos and Cambodia are all large users of pickups (i.e. pickups make up a large market share of overall vehicles in those markets), they are very small automotive markets with little or no local manufacturing of automobiles at this stage, not to mention poor infrastructure and policies to attract automakers (although a couple of automakers such as Ford and Hyundai have moved into Cambodia for CKD manufacturing). I also believe Vietnam's very poor automotive policies (including astronomical taxes that have caused auto prices to become the third highest in the world) may contribute towards the manufacturers that are currently assembling passenger vehicles there and only assemble a total of a laughably low 40,000 units on average per year may move out of the country altogether, especially by the time AEC 2015 takes hold as it's more efficient to just import from Thailand, with it's large economies of scale, similar vehicle types being driven by consumers in both countries (albeit Vietnamese consumers only purchase about 1/12 the number of cars per year as Thailand does). Indonesia, India, China and others that are currently exporting to Vietnam will continue to export the vehicle types that Thailand does not produce to Vietnam (such as small eco cars like the Hyundai i-10 from India and the Toyota Innova from Indonesia).

Thais only love pick up trucks because of the way taxes are slanted in their favour.

I think looking at the Thai industry in terms of one single perception is incredibly naive.......... pick ups and why they are made here in a highly protected environment has a lot more than just taxes and in turn they are only part of the picture....as is the home market.

They are simple to make, principally diesel and the government has championed them with the tax structure over cars.

Whilst the world is downsizing cars hand over fist, Thailand continues to make a basic pick up 2.0 diesel the same price as a 1.2 litre car.

Hardly conducive to encouraging smaller cars is it. That's what they have done. Basically you can buy a 3 litre turbo pick up for less than a 2.0 car.

Hardly logical at all

[Thai at Heart]

Anyway, shouldn't that read:

Japan remains primary automobile producer in Southeast Asia

No...Japan is not in S.E.Asia.

UbonRatch , I think, means that Japanese companies are the primary producers, hence the "giggle". It's humorous. Obviously lateral thinking is not your forte.

it would appear that sarcasm goes over your head too....but it was intended to underline that the comment was facile as the companies that are "japanese " in Thailand are majority Thai owned and most of the parts manufacturers are totally Thai, it is far too simplistic these days to judge a book by its cover. (I hope I don't need to explain that too.)

These international subsidiaries are not subject to 51:49 like small businesses.

They are 100% Japanese owned.

[GAZZPA]

Thailand seems to be doing everything possible to deter investment, they are certainly not immune to losing big companies manufacturing, The political turmoil is sure to deter big investment.

You don't have to be an expert in car manufacturing to see that Indonesia has a far bigger population and it's GDP is growing. So it maybe that the car manufacturers focus attention on the local market as they fight for dominance and market share in a growing market with 250 million people, but big investment in a higher population country, with cheaper labour and less political unrest does not bode well for Thailand.

Thailand will have to fight to keep the business and investment for sure. The market will become more competitive and it will not be so easy in the future as other countries in the Asean become more capable.

I think Thailand has a mountain to climb. It needs to sort out its political nonsense, reduce corruption and actually fight for business and not sit back and kid itself that everything will be ok if they don't because it won't.

I am working for a Thai manufacturer and the most common question I get asked right now is not about pricing, or schedules it seems to be "can you continue to supply with everything that's going on?" and "How is this all effecting your business?". The reality is that it has no effect on the business at all but like all business it's about confidence. My job right now seems to be maintaining confidence with international customers and I cannot believe i am alone in this.

I hope that Thai people in authority now and in the future recognize this needs to be addressed, if not i fear that there are some painful lessons to be learnt and not just in the car industry.