Australian auto parts firms eye opportunity in Thailand

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INVESTMENT
Australian auto parts firms eye opportunity in Thailand
Erich Parpart
The Nation


Scott-Kemmis: The things the NCPO have done are tangible and encouraging.

BANGKOK: -- Australian component-parts manufacturers for the automobile industry are moving to Thailand while the National Council for Peace and Order's policy to boost the rule of law can restore foreign confidence in the country if it continues in the long run, the Australian-Thai Chamber of Commerce (Austcham) says.

Leigh Scott-Kemmis, president of Austcham, said the chamber |had found ways of helping Australia's small and medium-sized enterprises (SMEs) to invest and to enter the supply chain in Thailand.

And he said that given Australia would not be producing motor cars anytime soon after closing down Ford, General Motors and Toyota manufacturing plants, the auto sector in the Kingdom had become more attractive.

Austcham has 440 corporate members and 50 per cent of them are SMEs in the service, hospitality, and manufacturing industries.

"There are significant after-markets in Australia for supply, parts manufacture, components manufacture for the auto sector and a lot of those will now look to come to Thailand and in the last year some 12 or more companies have," he said.

Scott-Kemmis said political uncertainty in Thailand from the beginning of the year had not hurt the country's manufacturing, supply chain or the export sector. And as most exports from here to Australia were cars, the auto sector had seen a major growth in trade between the two countries over the past 12 months.

He said the Board of Investment had done an outstanding job in providing assistance and facilitating foreign businesses in Thailand but there were areas that could be improved including work permit and custom issues and infrastructure.

However, most of these problems had existed for 20 years and were common for local and foreign investors alike. He said there was no real obstacle for investment in Thailand and most of the minor obstacles that people believed existed were due to lack of awareness and access to information.

"Knowledge is so valuable to understand that some investment obstacles here do not really exist and it is just a simple case that some investors do not know since the awareness was not there. If you can build the awareness, sometimes all of a sudden these so-called obstacles sort of disappear," he said.

Leigh said the sum of foreign direct investment (FDI) from Australia in Thailand was small when compared to other countries in the region such as Vietnam but the two countries remained large trading partners.

He said Australians saw Thailand as more of tourism destination than a significant manufacturing and industrial powerhouse that it was and the chamber was looking for ways to get this information across to investors in Australia.

Another reason why there was a small number of Australian firms investing here was because areas that Australia is particularly good at and things that they want |to invest in were not the areas where there was opportunity in Thailand.

Australians were looking to invest more in education, services and agriculture, but these areas were not as open in Thailand compared to many other countries.

As for business confidence and sentiment, Scott-Kemmis said Austcham members had not complained that the situation in Thailand had affected their ability to do business.

"We are not hearing anything from members that the current situation is causing them anxiety in terms of their business and everyone is just getting on with things as normal."

He said that when martial law was imposed, then was followed |by the coup there were some concerns over how the curfew would effect transport, logistics, and insurance but that was not an issue anymore now that curfew had been lifted.

He praised the NCPO's effort to increase the implementation of the rule of law in the country.

"The things that the NCPO have done that are tangible, and are encouraging to me, is the push to enforce the law, because there is no question that over a number of years the rule of law in Thailand has been dropping and dropping, especially on the street level," he said.

Scott-Kemmis said rule of law was the most important thing for investment and trade confidence because if people did not trust the system and believe that laws would be enforced, they would lose confidence in the country's investment and trade environment.

"The move to enforce the law is enormously important but the big test is whether it will continue in the future.

"But if it does, it will be one of the most encouraging factors for foreign investors to do business here in Thailand," he said.

Austcham will have a conference on "Enabling Prosperity - Moving beyond the Middle-Income Trap" on Wednesday at the Grand Hyatt Hotel.


-- The Nation 2014-06-23

[zaphod reborn]

If they're going to import parts, forget it. The corruption in the customs department will make it uneconimical to do long-term business. If they're going to invest and build a factory, sure, that's been viable for a long time. Factories like Denso and Hitachi have been successfully operating for years.

Sent from my GT-N7100 using Thaivisa Connect Thailand mobile app

[ezzra]

You're 20 years too late mate, Thailand is not the manufacturer's paradise one it used to be,

not salary wise, workers attitude wise and no amount of reforms that he junta will bring will

help Thailand to be a good place for manufacturing anything and making profit

[Chao Lao Beach]

These companies are invited by the Gov of the Day, package includes lots of perks like 5 -10 years 10 free etc, no tax on imported machinery etc.

[Chris Lawrence]

He is a Kiwi? Ex Bank of New Zealand. Australia's car industry is shattered becaues of cost.

[shirtless]

Their goes more Australian jobs, I dont blame companies for moving off shore , The government needs to remember they have a population that needs work to survive .Australia is fast becoming the hub of unemployment.

[keemapoot]

With the Aussie auto industry closing up shop, it's not rocket science that the parts companies that cater to them will be looking to set up in Thailand, Indo, Malaysia and Philippines. Not sure how much opportunity there is for them though at this late stage...

[TimCM]

Can someone confirm if Australia has similar laws to the US on corruption in offshore locations. If so, it would be a big risk to try to get anything done here with all the brown bags required to get anything done

[theslime]

He is a Kiwi? Ex Bank of New Zealand. Australia's car industry is shattered becaues of cost.

Shatterred, because of what Cost,s ?.

If, its because of the Workers wage,s,as everybody I,ve spoken to has said as much, When asked to take a pay cut themselves, all looked at me like I was a Loon.

[simple1]

Can someone confirm if Australia has similar laws to the US on corruption in offshore locations. If so, it would be a big risk to try to get anything done here with all the brown bags required to get anything done

Don't know about similar to the US, but yes there is Australian government legislation

http://www.dfat.gov.au/issues/measures-against-corruption.html

if interpreted correctly, the President of Austcham has indirectly referred to corrupt practices in Thailand, seemingly with lower level bureaucrats, with his observation "over a number of years the rule of law in Thailand has been dropping and dropping, especially on the street level".

Never heard of Australian companies being prosecuted over corrupt practices in Thailand by the Oz government, but a few Oz citizens have been prosecuted by Thai authorities over Thai based scams.

Australian company successes in Thailand

http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CBwQFjAA&url=http%3A%2F%2Fwww.austrade.gov.au%2FArticleDocuments%2F1418%2FWhich-Australian-companies-are-thriving-in-Thailand.pdf.aspx&ei=hJmnU5LAEI6KkwWhoIH4Cg&usg=AFQjCNHbcWZgPmuitOzZL-Adf1tkm6ESMg&sig2=UnJ9e6gE1-7krxhYQ3x-LA

[TimCM]

Can someone confirm if Australia has similar laws to the US on corruption in offshore locations. If so, it would be a big risk to try to get anything done here with all the brown bags required to get anything done

Don't know about similar to the US, but yes there is Australian government legislation

http://www.dfat.gov.au/issues/measures-against-corruption.html

if interpreted correctly, the President of Austcham has indirectly referred to corrupt practices in Thailand, seemingly with lower level bureaucrats, with his observation "over a number of years the rule of law in Thailand has been dropping and dropping, especially on the street level".

Never heard of Australian companies being prosecuted over corrupt practices in Thailand by the Oz government, but a few Oz citizens have been prosecuted by Thai authorities over Thai based scams.

Australian company successes in Thailand

http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CBwQFjAA&url=http%3A%2F%2Fwww.austrade.gov.au%2FArticleDocuments%2F1418%2FWhich-Australian-companies-are-thriving-in-Thailand.pdf.aspx&ei=hJmnU5LAEI6KkwWhoIH4Cg&usg=AFQjCNHbcWZgPmuitOzZL-Adf1tkm6ESMg&sig2=UnJ9e6gE1-7krxhYQ3x-LA

Thanks for the reply. Very informative

Seems to mirror the US laws so the companies here better hope no one starts investigating

That was one hell of a puff piece from the Aust embassy. Not sure if I would agree that there is no corruption outside the Govt sector.

Will be interesting to see what happens with the economy over the next few years as I think the high debt levels will be a major drag on the economy

cheers

[starky]

Their goes more Australian jobs, I dont blame companies for moving off shore , The government needs to remember they have a population that needs work to survive .Australia is fast becoming the hub of unemployment.

Exactly right! thanks to Abbot and his cronies the companies and upper management will all go offshore with no loss in wages and exploit labour markets in foreign countries. Meanwhile more and more Australian families are losing their income and ability to put food on the table. Australians can't afford to work for 10 dollars a day it is one of the most expensive countries in the world to live. What the Australian government should have done is do what most countries do and support local industries and put massive taxes and import duties on imported goods. All too late now and there are some hard times ahead for many Australians I fear.

[Oziex1]

He is a Kiwi? Ex Bank of New Zealand. Australia's car industry is shattered becaues of cost.

Shatterred, because of what Cost,s ?.

If, its because of the Workers wage,s,as everybody I,ve spoken to has said as much, When asked to take a pay cut themselves, all looked at me like I was a Loon.

The manufacturing industries of western nations cannot compete with conditions of developing nations, well of course not. It bugs me that people in Australia would entertain the thought of reducing wages, to compete with who? The clothing manufactures of Bangladesh? What would Australian wages be reduced to, to compete with developing nations. What a ludicrous concept, but worse than that is this stuff is being peddled by the media and some think it necessary.

When Australia sells all of its mineral resources, what then. A very poorly managed country that has so much potential to do well.

OK OK enough of this for now.

[mojorison]

Scott-Kemmis is president of Auscham. He stated that the things the NCPO have done are tangible and encouraging. He didn't pander to the DRT. He stated facts. Facts that show through market sentiment. He was not forced to say what he said as he lives in Australia. He has no political agenda. He says it because of the signs. It is not a controlled narrative by the DRT.

My friends dad who owns a factory that makes temporary fences like the ones used at concerts was based in Brisbane, Australia. Costs rose and he moved his manufacturing devision to Laem Chabang and the company blossomed ever since. He is still their today.

Don't be fooled by some bitter twisted folk that live in a bloody past and spew a cancerous narrative. For Thailand to move forward Thai's need to look into the future, not back in the past.

The irony in your last paragraph is superb... keep up the good work.

[mojorison]

Can someone confirm if Australia has similar laws to the US on corruption in offshore locations. If so, it would be a big risk to try to get anything done here with all the brown bags required to get anything done

AWB scandal. Aussie firms paying backhanders will eventually be found out, and penalised. It is very difficult to mesh with the local "infrastructure" in the brown paper bag department.

[Kudel]

Their goes more Australian jobs, I dont blame companies for moving off shore , The government needs to remember they have a population that needs work to survive .Australia is fast becoming the hub of unemployment.

Exactly right! thanks to Abbot and his cronies the companies and upper management will all go offshore with no loss in wages and exploit labour markets in foreign countries. Meanwhile more and more Australian families are losing their income and ability to put food on the table. Australians can't afford to work for 10 dollars a day it is one of the most expensive countries in the world to live. What the Australian government should have done is do what most countries do and support local industries and put massive taxes and import duties on imported goods. All too late now and there are some hard times ahead for many Australians I fear.

Very strange that Australia is opening it's borders again for migrant workers in the construction sector brik layers etc... And staff needed in specialized technological sectors ,so no jobs in ozz then?

[simple1]

Their goes more Australian jobs, I dont blame companies for moving off shore , The government needs to remember they have a population that needs work to survive .Australia is fast becoming the hub of unemployment.

Exactly right! thanks to Abbot and his cronies the companies and upper management will all go offshore with no loss in wages and exploit labour markets in foreign countries. Meanwhile more and more Australian families are losing their income and ability to put food on the table. Australians can't afford to work for 10 dollars a day it is one of the most expensive countries in the world to live. What the Australian government should have done is do what most countries do and support local industries and put massive taxes and import duties on imported goods. All too late now and there are some hard times ahead for many Australians I fear.

Which countries have very high tarrifs on all imported goods and manage to have high employment and a successful economy?

Edited June 23, 2014 by simple1

[starky]

Their goes more Australian jobs, I dont blame companies for moving off shore , The government needs to remember they have a population that needs work to survive .Australia is fast becoming the hub of unemployment.

Exactly right! thanks to Abbot and his cronies the companies and upper management will all go offshore with no loss in wages and exploit labour markets in foreign countries. Meanwhile more and more Australian families are losing their income and ability to put food on the table. Australians can't afford to work for 10 dollars a day it is one of the most expensive countries in the world to live. What the Australian government should have done is do what most countries do and support local industries and put massive taxes and import duties on imported goods. All too late now and there are some hard times ahead for many Australians I fear.

Very strange that Australia is opening it's borders again for migrant workers in the construction sector brik layers etc... And staff needed in specialized technological sectors ,so no jobs in ozz then?

We aren't opening up our borders at all, there aren't massive job shortages but what is happening is companies would prefer to employ migrant labour and those on 457 visas entering the country basically as scab labour working for lesser amounts of money, doing contra deals with employers and basically breaking down conditions that have been hard won over many years.

[starky]

Their goes more Australian jobs, I dont blame companies for moving off shore , The government needs to remember they have a population that needs work to survive .Australia is fast becoming the hub of unemployment.

Exactly right! thanks to Abbot and his cronies the companies and upper management will all go offshore with no loss in wages and exploit labour markets in foreign countries. Meanwhile more and more Australian families are losing their income and ability to put food on the table. Australians can't afford to work for 10 dollars a day it is one of the most expensive countries in the world to live. What the Australian government should have done is do what most countries do and support local industries and put massive taxes and import duties on imported goods. All too late now and there are some hard times ahead for many Australians I fear.

Which countries have very high tarrifs on all imported goods and manage to have high employment and a successful economy?

Not all imported goods perhaps,but as far as protecting industry goes just off the top of my head I could point to the U.S' aggressive protection of their maritime, automotive and agricultural industry to name a few which coincidentally are the 3 biggest areas where Australians are facing massive job losses

[Chris Lawrence]

He is a Kiwi? Ex Bank of New Zealand. Australia's car industry is shattered becaues of cost.

Shatterred, because of what Cost,s ?.

If, its because of the Workers wage,s,as everybody I,ve spoken to has said as much, When asked to take a pay cut themselves, all looked at me like I was a Loon.

Slimey, wages is a cost? The other problem was not enough were being bought.

Other big cost was fuel. Resale of Falcons and Holdern Commordores can loose 40-50% in 2 years? These cars cannot compete with some of the quality and fuel usage overseas varities bring. Thailand is hub of vechcile manufacturing, The Detroit of Asia. Makes sence to be over here. (India is also trying to claim this title.

I don't think pay cuts were the answer at this late stage? Ford relied on LPG to better fuel savings, but overseas they went diesel.

Ford Australia over the last few years shot themselves in the foot. RJV cost them millions; great idea but they took away the personal touch, the dealer pricipal. My father sold his dealership then that he had for 30+ years. Ford than sold them back to the dealers at a very low cost. The idea of RJV was to shave costs between the manufacturer and the buyer.

Got to luv the V8 though. I am just waiting to pick a cheap V8 ute, an Ozzie sports car?

[selftaopath]

Living in the "sticks" I find myself "still" tinkering w/ my "little puddle jumper." At times I've let local "car engineers" work on my car/suv. lol Boy oh boy.... the stories I could tell. So now it's back to my being my own mechanic. I'd love to see in Khon Kaen (75K from me) an auto supply shop like "Pep Boys" etc. Wouldn't it be nice if it was stocked w/ tools gadgets etc. Hell I've been looking for a 3/8 ratchet/socket extension for YEARS. I'd like to get a pal of mine an engine compression gage too b/c..... he's been told "you need a new engine" several times by local mechanics who don't know what this gauge is.???????

[Chris Lawrence]

Scott-Kemmis is president of Auscham. He stated that the things the NCPO have done are tangible and encouraging. He didn't pander to the DRT. He stated facts. Facts that show through market sentiment. He was not forced to say what he said as he lives in Australia. He has no political agenda. He says it because of the signs. It is not a controlled narrative by the DRT.

My friends dad who owns a factory that makes temporary fences like the ones used at concerts was based in Brisbane, Australia. Costs rose and he moved his manufacturing devision to Laem Chabang and the company blossomed ever since. He is still their today.

Don't be fooled by some bitter twisted folk that live in a bloody past and spew a cancerous narrative. For Thailand to move forward Thai's need to look into the future, not back in the past.

Leigh has lived in Asia since 1991? See his profile:

http://www.austchamthailand.com/boardmembers

[lvr181]

Their goes more Australian jobs, I dont blame companies for moving off shore , The government needs to remember they have a population that needs work to survive .Australia is fast becoming the hub of unemployment.

Exactly right! thanks to Abbot and his cronies the companies and upper management will all go offshore with no loss in wages and exploit labour markets in foreign countries. Meanwhile more and more Australian families are losing their income and ability to put food on the table. Australians can't afford to work for 10 dollars a day it is one of the most expensive countries in the world to live. What the Australian government should have done is do what most countries do and support local industries and put massive taxes and import duties on imported goods. All too late now and there are some hard times ahead for many Australians I fear.

Some truth in what you say but ALSO nobody (individuals, companies or Governments) can keep borrowing and not face the fact that borrowing costs money, that has to be, one day, repaid. We (Australia) now belongs to a world economy and we need to work smarter NOT harder.

Just saying.

Edit: Added word

Edited June 23, 2014 by lvr181

[BSJ]

What the Australian government should be doing is booting the lazy dole bludging bums off the dole and giving them a free ticket to where ever there are jobs for fruit pickers. Then Oz wouldn't need to import O/S labour to do fruit picking.

[louse1953]

Can someone confirm if Australia has similar laws to the US on corruption in offshore locations. If so, it would be a big risk to try to get anything done here with all the brown bags required to get anything done

Yes they have Tim,but proving it is a different matter.Do you remember oil for wheat and the treasury scandal.These corporates know how to muddy the water and cover their bums .Bottom feeders sometimes get jail time.

Edited June 23, 2014 by louse1953

[simple1]

Their goes more Australian jobs, I dont blame companies for moving off shore , The government needs to remember they have a population that needs work to survive .Australia is fast becoming the hub of unemployment.

Exactly right! thanks to Abbot and his cronies the companies and upper management will all go offshore with no loss in wages and exploit labour markets in foreign countries. Meanwhile more and more Australian families are losing their income and ability to put food on the table. Australians can't afford to work for 10 dollars a day it is one of the most expensive countries in the world to live. What the Australian government should have done is do what most countries do and support local industries and put massive taxes and import duties on imported goods. All too late now and there are some hard times ahead for many Australians I fear.

Which countries have very high tarrifs on all imported goods and manage to have high employment and a successful economy?

Not all imported goods perhaps,but as far as protecting industry goes just off the top of my head I could point to the U.S' aggressive protection of their maritime, automotive and agricultural industry to name a few which coincidentally are the 3 biggest areas where Australians are facing massive job losses

In Australia Ford alone received $1 billion in subsidies in the past ten years in Oz, yet still failed as did the entire auto manufacturing industry.

The Australian economy just cannot afford protectionism/isolationist policies with the flowon effect of barriers to Australian exports.

From my POV a significant issue is failure of successive governments and commerce in Oz for the near non existance of value add industry. In this regards, a great model for Oz is Israel

Edited June 23, 2014 by simple1

[tingtongtourist]

What the Australian government should be doing is booting the lazy dole bludging bums off the dole and giving them a free ticket to where ever there are jobs for fruit pickers. Then Oz wouldn't need to import O/S labour to do fruit picking.

Oz does not need import workers..are already many.The issue is that many bosses use this excuse to underpay and exploit foriegn labour.

Many farm operator are now building temporary accoodations on their property for the backpacker, so they can exploit this situation even further. They have no intention of hiring Aussies and they even have the nerve to advertise for 457 visa workers.

If any Aussie apply for this work they are mostly told "sorry we only want backpacker"

[chooka]

Forget Thailand, why would anyone want to move their company to Thailand when they will have to hand over 51% of the company to a Thai. Great for Thais as they get the majority stake free of charge.

[simple1]

Forget Thailand, why would anyone want to move their company to Thailand when they will have to hand over 51% of the company to a Thai. Great for Thais as they get the majority stake free of charge.

Australian majority shareholding is permitted in certain business sectors with the Thai / Australia FTA. e.g.

Construction services, maritime cargo services, mining operations, restaurants and hotels and others

http://juslaws.com/Foreign-Business-for-a-newly-established/FTA-Thai-Australian-Company.html