Thailand : Detroit of AsiaThailand : Detroit of AsiaBy..By..
Mr.Ninnart ChaithirapinyoMr.Ninnart ChaithirapinyoVice ChairmanVice Chairman
The Federation of Thai IndustriesThe Federation of Thai IndustriesToyota Motor ThailandToyota Motor Thailand
Today’s topicToday’s topic
I.I. Where are we? Where are we?
II.II. Where will we go? Where will we go?
III. How will we go?III. How will we go?
IV. Why Thailand?IV. Why Thailand?
I. Where are we?I. Where are we?
1.1 Circumstance Change in Market1.1 Circumstance Change in Market1.1 Circumstance Change in Market1.1 Circumstance Change in Market
Topics ’70 ’90 ’00 ’05 ‘10
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
FTANegotiation
AFTA Tariff reduction
to 0%
Regulation DeregulationHigher
competitionLiberalization
Vehicle Assembly Asian Car Global Car
Country Competition Regional Competition Global Competition
Company PC 1 TON P/U CV TOTAL
1. TOYOTA 200,000 200,000 50,000 450,000
2. ISUZU - 180,000 20,000 200,000
3. MITSUBISHI 50,000 100,000 20,200 170,200
4. AUTO ALLIANCE
(Ford& Mazda)
2,700 132,300 - 135,000
5. HONDA 120,000 - - 120,000
6. GENERAL MOTOR 20,000 95,000 - 115,000
6. NISSAN 33,200 66,400 2,400 102,000
8. HINO - - 28,800 28,800
9. DAIMLERCHRYSLER 16,300 - - 16,300
10.YMC Assembly 12,000 - - 12,000
11. BMW. 10,000 - - 10,000
12. VOLVO 10,000 - - 10,000
TOTAL 474,200 773,700 121,200 1,369,100
1.2 PRODUCTION CAPACITY IN 20051.2 PRODUCTION CAPACITY IN 20051.2 PRODUCTION CAPACITY IN 20051.2 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 ratio1.3 Market ratio1.3 Market ratio1.3 Market ratio
ForeignJoint Venture
LOCAL SUPPLIERS
Pure
Thai
354
ThaiMajority
68
ForeignMajority
287
LEs
SMEs
Assemblers12 Companies
Tier 1
709 Companies
Tier 2&3
1,000Companies
1.4 Industry structure1.4 Industry structure1.4 Industry structure1.4 Industry structure
16% 8%
GDP EMPLOYMENT
Auto Auto IndustryIndustry Auto IndustryAuto Industry
Contribution of Auto Industry to Thai EconomyContribution of Auto Industry to Thai Economy
Manufacturing SectorManufacturing Sector
612
750
928
327
411
459
584
389
434
525 559
158
449533
626
409
144
571
485
589
363
296
218262
229
332
233180
42
175152130
66
14821
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005(1-7)
Production Sales Exports
Unit1.5 1.5 Production, Domestic sales and ExportsProduction, Domestic sales and Exports1.5 1.5 Production, Domestic sales and ExportsProduction, Domestic sales and Exports
(Ranking compared with other products)
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2001 2002 2003 2004 2005(1-7)
Million US$Million US$
No.1 Computer 9,320
No.2 Vehicles & Parts 5,681
No.4 Rubber 3,432No.3 Circuit Board 4,974
No.5 Plastic 3,132
1.6 Thai Export Value1.6 Thai Export Value1.6 Thai Export Value1.6 Thai Export Value
Country NO. Productions NO. Sales
U.S.A. 1 11,907,588 1 17,294,805
JAPAN 2 10,515,698 2 5,844,327
GERMANY 3 5,530,129 4 3,563,860
CHINA 4 5,056,715 3 5,061,180
KOREA 5 3,470,119 14 1,091,577
SPAIN 6 3,011,010 8 1,891,383
FRANCE 7 2,756,920 7 2,473,312
CANADA 8 2,669,961 10 1,575,590
BRAZIL 9 2,206,189 9 1,578,775
UK 10 1,856,057 5 2,957,200
MEXICO 11 1,567,337 13 1,114,099
INDIA 12 1,511,171 12 1,343,779
RUSSIA 13 1,392,646 11 1,376,273
ITALY 14 1,060,171 6 2,522,737
THAILAND 15 928,081 17 626,026
TURKEY 16 820,135 16 757,092
1.7 World Productions & Sales Ranking in 20041.7 World Productions & Sales Ranking in 20041.7 World Productions & Sales Ranking in 20041.7 World Productions & Sales Ranking in 2004
and will celebrate One Million
Productions in December
In 2005In 2005 Thailand will rank No.14 in
Production and No.17 in
Domestic sale
1.8 Productions, Domestic Sales and Exports in 20051.8 Productions, Domestic Sales and Exports in 20051.8 Productions, Domestic Sales and Exports in 20051.8 Productions, Domestic Sales and Exports in 2005
Production, 1,180,000
Domestic Sale,
680,000 Export, 500,000
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
2005
Company 2005 (units)
TOYOTA 150,000
MITSUBISHI 100,000
FORD & MAZDA 65,000
GENERAL MOTORS
50,000
ISUZU 50,000
HONDA 40,000
OTHERS 30,000
TOTAL 500,000
EXPORT FORCAST 2005FORCASTING, 2005
II. Where will we go?
Detroit of Asia’s TargetDetroit of Asia’s 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?
3.1 AHRDPAHRDP(Automotive Human Resource Development Project)(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 Fund3.2 R&D and Training Fund
R&D TRAINING
FUND
Car assemblerswithdraw for • Oversea & Domestic training • Scholarship• R&D
90%90%
10%10%
SMEs withdraw for • Training • R&D
SOURCE OF FUNDSOURCE OF FUND
• CAR ASSEMBLERS• PART MAKERS
100%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 Agreements3.3 Free Trade Agreements
10 % increaseIn export
15%
0%
0%
2%
4%
6%
8%
10%
12%
14%
16%
2004 2005
30 % increasein export
5%
0%
0%
1%
1%
2%
2%
3%
3%
4%
4%
5%
5%
2004 2005
Tariff reductionTariff reduction
Tariff reduction
Tariff reduction
3.3 Free Trade Agreement : Australian Tariff Reduction
3.3 Free Trade Agreement : Australian Tariff Reduction
The opportunities for Automotive IndustryThe opportunities for Automotive Industry
I. Enhancing trade in vehiclesI. 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 IndustryThe 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 componentsII. Enhancing trade in Auto components
The opportunities for Automotive IndustryThe 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 InvestmentIII. Enhancing in Services and Investment
Japan-Thailand Economic Partnership AgreementJapan-Thailand Economic Partnership Agreement
I. AutomobilesI. Automobiles
80% 75% 70% 65%Passenger car
Exceed 3,000 cc.Passenger car
Exceed 3,000 cc. 60%
2005 20092007 20082006
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 AgreementJapan-Thailand Economic Partnership Agreement
II. Auto partsII. 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 AgreementJapan-Thailand Economic Partnership Agreement
III. Iron and steel productsIII. 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 11th 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. Why’s Thailand
4.1 Nine Government policies in 20054.1 Nine Government policies in 2005
1. Poverty Eradication Policy
2. Human development policy and quality of life
3.3. Economic restructuring policy to create equilibrium Economic restructuring policy to create equilibrium
and competitivenessand competitiveness
4. Natural Resources and Environmental policy
5.5. Foreign policy and international economic policyForeign policy and international economic policy
6.6. Policy on the development of the legal system and Policy on the development of the legal system and
good governancegood 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
< JAPAN >Toyota+ R&D CenterHonda + R&D Center
Isuzu,Mitsubishi,Mazda,Hino, Nissan,
< EUROPE >Citroen, Peugeot,Volkswagen
,BMW, Volvo ,Daimler
< USA >Ford + Asia Pacific HQs GM + Asia Pacific HQs
Chrysler
4 4.2 Global Brands in Thailand4.2 Global Brands in Thailand
America 2 persons / unit
Japan 2 persons / unit
Malaysia 5 persons / unit
Singapore 6 persons / unit
Thailand 10 persons / unit
Philippines 30 persons / unit
Indonesia 60 persons / unit
Vietnam 300 persons / unit
Possibility for expansion potentialPossibility for expansion potential 4.3 Car ownership4.3 Car ownership
Government
Political stability liberalization policy Attractive government
incentives
Infrastructure
Good & Massive infrastructure
network
( Electricity ,Telecommunication ,
Air ports , Ports )
4.4 Why Thailand4.4 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 Thailand4.4 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 Thailand4.4 Why Thailand
1. Mirror Set
2.Glass set
4.5 Low Cost & Competitive Market4.5 Low Cost & Competitive Market
3.Stamping part
4. Insulator Set
4.5 Low Cost & Competitive Market4.5 Low Cost & Competitive Market
5.Rubber Set
6. Interior Set
4.5 Low Cost & Competitive Market4.5 Low Cost & Competitive Market
DIESEL GASOLINE
7. Engine Set
4.5 Low Cost & Competitive Market4.5 Low Cost & Competitive Market
INSUFFICIENT COMPONENTS PRODUCED IN THAILANDINSUFFICIENT 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 Opportunity to invest invest
in Thailand!!in Thailand!!
4.6 Opportunity for Auto Industry4.6 Opportunity for Auto Industry4.6 Opportunity for Auto Industry4.6 Opportunity for Auto Industry
* New investment
PARTS MANUFACTURERED IN THAILANDPARTS MANUFACTURERED IN THAILAND
• Engine- Diesels, Motorcycles
• Engine Components- Starters, Alternators, Pumps, Filters, Hosed, Gears, Flywheels
• Body Parts- Chassis, Bumpers, Fenders, Hoods, Door Panels
• Brake Systems- Master Cylinders, Drums, Disc, Pads, Linings
• Steering Systems- Steering Wheels, Gears, Columns, Pumps, Linkages
• Engine- Diesels, Motorcycles
• Engine Components- Starters, Alternators, Pumps, Filters, Hosed, Gears, Flywheels
• Body Parts- Chassis, Bumpers, Fenders, Hoods, Door Panels
• Brake Systems- Master Cylinders, Drums, Disc, Pads, Linings
• Steering Systems- Steering Wheels, Gears, Columns, Pumps, Linkages
• Suspensions- Shocks, Coils, Ball Joints
• Transmissions- Gears, Casings, Rear Axles, Drive Shafts, Propeller Shafts
• Electrical / Electronic- Alternators, Starters, Speedometers, lamps, Motors, Flasher Relays
• Interiors / Exteriors- Seats, Mats, Weather Strips, Console Boxes
• Others- Windshields, Seat Belts, Radiators, Wheels, Compressors
• Suspensions- Shocks, Coils, Ball Joints
• Transmissions- Gears, Casings, Rear Axles, Drive Shafts, Propeller Shafts
• Electrical / Electronic- Alternators, Starters, Speedometers, lamps, Motors, Flasher Relays
• Interiors / Exteriors- Seats, Mats, Weather Strips, Console Boxes
• Others- Windshields, Seat Belts, Radiators, Wheels, Compressors
4.6 Opportunity for Auto Industry4.6 Opportunity for Auto Industry4.6 Opportunity for Auto Industry4.6 Opportunity for Auto Industry
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 Industry4.6 Opportunity for Auto Industry4.6 Opportunity for Auto Industry4.6 Opportunity for Auto Industry
Vielen vielen DankVielen vielen Dank