Presentation on theme: "Thailand : Detroit of Asia By.. Mr.Ninnart Chaithirapinyo Vice Chairman The Federation of Thai Industries Toyota Motor Thailand."— Presentation transcript:
Thailand : Detroit of Asia By.. Mr.Ninnart Chaithirapinyo Vice Chairman The Federation of Thai Industries Toyota Motor Thailand
Todays topic I. Where are we? II. Where will we go? II. Where will we go? III. How will we go? III. How will we go? IV. Why Thailand? IV. Why Thailand?
I. Where are we?
1.1 Circumstance Change in Market Topics Auto Policy by Government Movement of Automotive Industry Car Manufacturer Trend Local content regulations Ban for CBU vehicle import Deregulation of Local content Tariff reduction Free competition 25% local Content requirement Increase of local content to 50% Abolishment of local content FTA Negotiation AFTA Tariff reduction to 0% Regulation Deregulation Higher competition Liberalization Vehicle Assembly Asian Car Global Car Country Competition Regional CompetitionGlobal Competition
CompanyPC1 TON P/UCVTOTAL 1. TOYOTA200,000 50,000450, ISUZU-180,00020,000200, MITSUBISHI50,000100,00020,200170, AUTO ALLIANCE (Ford& Mazda) 2,700132, , HONDA120, GENERAL MOTOR20,00095, , NISSAN33,20066,4002,400102, HINO--28, DAIMLERCHRYSLER16, YMC Assembly12, BMW.10, VOLVO10,000-- TOTAL 474,200773,700121,2001,369, PRODUCTION CAPACITY IN 2005
P/U Ratio = 58% Local Content = 80-90% P/U Ratio = 58% Local Content = 80-90% P/C Ratio = 33% Local Content = 30-70% P/C Ratio = 33% Local Content = 30-70% 1.3 Market ratio
Foreign Joint Venture LOCAL SUPPLIERS Pure Thai 354 Thai Majority 68 Foreign Majority 287 LEs SMEs Assemblers 12 Companies Tier Companies Tier 2&3 1,000 Companies 1.4 Industry structure
GDPEMPLOYMENT Auto Industry Contribution of Auto Industry to Thai Economy Manufacturing Sector
Unit 1.5 Production, Domestic sales and Exports
(Ranking compared with other products) Million US$ No.1 Computer 9,320 No.2 Vehicles & Parts 5,681 No.4 Rubber 3,432 No.3 Circuit Board 4,974 No.5 Plastic 3, Thai Export Value
CountryNO.ProductionsNO.Sales U.S.A.111,907,588117,294,805 JAPAN210,515,69825,844,327 GERMANY35,530,12943,563,860 CHINA45,056,71535,061,180 KOREA53,470,119141,091,577 SPAIN63,011,01081,891,383 FRANCE72,756,92072,473,312 CANADA82,669,961101,575,590 BRAZIL92,206,18991,578,775 UK101,856,05752,957,200 MEXICO111,567,337131,114,099 INDIA121,511,171121,343,779 RUSSIA131,392,646111,376,273 ITALY141,060,17162,522,737 THAILAND15928, ,026 TURKEY16820, , World Productions & Sales Ranking in 2004 and will celebrate One Million Productions in December In 2005 Thailand will rank No.14 in Production and No.17 in Domestic sale
1.8 Productions, Domestic Sales and Exports in 2005 Company2005 (units) TOYOTA 150,000 MITSUBISHI 100,000 FORD & MAZDA 65,000 GENERAL MOTORS 50,000 ISUZU 50,000 HONDA 40,000 OTHERS 30,000 TOTAL500,000 EXPORT FORCAST 2005 FORCASTING, 2005
II. Where will we go?
Detroit of Asias Target Being 1 ton P/U production base of the world Being the production base of motorcycle Being the production base of OEM and REM parts Production 1.8 million units with export 40% in 2010
III. How to go?
AHRDP 3.1 AHRDP (Automotive Human Resource Development Project) Objective : To enhance competitiveness in term of price, quality and delivery : To Improve the following: - Engineering capability - Mould & Die-making capability - Manufacturing capability (Plastic/ rubber, Casting, Machining,Stamping) Objective : To enhance competitiveness in term of price, quality and delivery : To Improve the following: - Engineering capability - Mould & Die-making capability - Manufacturing capability (Plastic/ rubber, Casting, Machining,Stamping) (Joint project among Jetro, JCC,TAI, FTI)
3.2 R&D and Training Fund R&D TRAINING FUND Car assemblers withdraw for Oversea & Domestic training Scholarship R&D 90% 10% SMEs withdraw for Training R&D SOURCE OF FUND CAR ASSEMBLERS PART MAKERS 100% R&D and Training fund will be managed by term committee
THAILAND (Pop ~ 64.8 million) AMERICA (Pop~292 million) BAHRAIN (Pop 0.9 million) BIMSTEC AUSTRALIA (Pop ~ 20 million) CHINA (Pop ~ 1,300 million) PERU (Pop~ 28 million INDIA ( Pop~ 1,000 million ) JAPAN (Pop~127 million) NEWZEALAND (Pop ~ 4 million) AFTA (Pop ~ 500 million) To expand additional market 3.3 Free Trade Agreements 3.3 Free Trade Agreements
10 % increase In export 30 % increase in export Tariff reduction 3.3 Free Trade Agreement : Australian Tariff Reduction
The opportunities for Automotive Industry I. Enhancing trade in vehicles 1.The Australian and Thai vehicles are complementary. There are global platform similarities and both use the right hand drive format. 2.Thailand is a centre for light commercial vehicles production (Detroit of Asia). 3.Australia has a competitive advantage in large car production. 4.The trade expansion would be expected to affluent rise as a result of the tariff reduction.
The opportunities for Automotive Industry 1.There will be trade exposure potential for exports and sales under TAFTA. 2.Improving the economies of scale via production increases as well as cost reduction from cheaper raw material ex: steel, copper, aluminum etc. II. Enhancing trade in Auto components
The opportunities for Automotive Industry 1.Enhancing in the service in the area of training, technology transfer, Design & Engineering Alliance, Mold & Die making or plastic injection,etc. 2.Labor and services are able to move easier under the TAFTA. Leading to export engineering, design and technical expertise. 3.There are motor vehicle service, repair opportunities in the aftermarket sector and also auto part reconditioning. 4.BOI offers more privilege for the auto industry. III. Enhancing in Services and Investment
Japan-Thailand Economic Partnership Agreement I. Automobiles 80% 75% 70% 65% Passenger car Exceed 3,000 cc. Passenger car Exceed 3,000 cc. 60% Passenger car less than 3,000 cc. Passenger car less than 3,000 cc. Renegotiation will commence on a date to be agreed upon before signing A political declaration on automobile will be issued at the time of signing JTEPA
Japan-Thailand Economic Partnership Agreement II. Auto parts The tariff rate will be reduced to 20% and maintained before eliminate in 2011 Tariff over 20% Tariff over 20% Tariff at 20% and below Tariff at 20% and below The tariff rate will be maintained and eliminated in 2011 Sensitive (5 items) Sensitive (5 items) The tariff rate will be maintained and eliminated in 2013
Japan-Thailand Economic Partnership Agreement III. Iron and steel products Some products will be eliminated on the effective date. The others will be abolished, at latest, by the first day of the 11 th year after the entry into effect. For some specific hot rolled coils and plates, zero tariff quota scheme will be established and their Quantity will be reviewed annually.
IV. Whys Thailand
4.1 Nine Government policies in Poverty Eradication Policy 2.Human development policy and quality of life 3.Economic restructuring policy to create equilibrium and competitiveness 4.Natural Resources and Environmental policy 5.Foreign policy and international economic policy 6.Policy on the development of the legal system and good governance 7.Policy to promote democracy and civil society process 8.National security policy 9.Policy according to directive principles of fundamental state policy
ANNUAL PRODUCTION CAPACITY 1.2 MILLION UNITS Toyota+ R&D Center Honda + R&D Center Isuzu,Mitsubishi, Mazda,Hino, Nissan, Citroen, Peugeot,Volkswagen,BMW, Volvo,Daimler Ford + Asia Pacific HQs GM + Asia Pacific HQs Chrysler Global Brands in Thailand 4.2 Global Brands in Thailand
America 2 persons / unit Japan 2 persons / unit Malaysia5 persons / unit Singapore 6 persons / unit Thailand 10 persons / unit Philippines30 persons / unit Indonesia60 persons / unit Vietnam300 persons / unit Possibility for expansion potential 4.3 Car ownership 4.3 Car ownership
Government Political stability liberalization policy Attractive government incentives Infrastructure Good & Massive infrastructure network ( Electricity,Telecommunication, Air ports, Ports ) 4.4 Why Thailand 4.4 Why Thailand
Market Considerable market size Large production base for pick up truck Gateway to 500 million people of ASEAN Supplier Rich pool of supporting industries Good access to raw materials Cheaper parts manufacturing cost 4.4 Why Thailand 4.4 Why Thailand
People Abundant of quality labor forces Language proficiency Hospitality and friendly attitude Amenity Delicious foods and fruits Attractive tourist places Plenty of golf courses 4.4 Why Thailand 4.4 Why Thailand
1. Mirror Set 2. Glass set 4.5 Low Cost & Competitive Market 4.5 Low Cost & Competitive Market
3.Stamping part 4. Insulator Set 4.5 Low Cost & Competitive Market 4.5 Low Cost & Competitive Market
5.Rubber Set 6. Interior Set 4.5 Low Cost & Competitive Market 4.5 Low Cost & Competitive Market
INSUFFICIENT COMPONENTS PRODUCED IN THAILAND Passenger Car Engines Fuel Injection Pumps* Transmissions Differential Gears Injection Nozzles* Electronic Systems Electronic Control Units Turbo Chargers* Substrates for Catalytic Converters Anti-Lock Brake Systems Training Service Design & Engineering Mould & Die Making Plastic injection Passenger Car Engines Fuel Injection Pumps* Transmissions Differential Gears Injection Nozzles* Electronic Systems Electronic Control Units Turbo Chargers* Substrates for Catalytic Converters Anti-Lock Brake Systems Training Service Design & Engineering Mould & Die Making Plastic injection Opportunity to invest in Thailand!! 4.6 Opportunity for Auto Industry * New investment
BRIGHT FUTURE GOVERNMENT SUPPORT EFFORT OF THE PRIVATE SECTOR POTENTIAL BUSINESS GROWTH FOR NEW/EXISTING INVESTORS PRODUCTION VOLUME INCREASE 100% LOCALIZATION ++ THAILAND 4.6 Opportunity for Auto Industry