Thursday, January 30, 2014

Ford Motor commences EcoSport urban SUV production in Thailand

Via ABR: American automaker Ford Motor has commenced the production of the all-new Ford EcoSport urban SUV at its Ford Thailand Manufacturing (FTM) plant in Rayong.

Globally, the new plant marks the fourth EcoSport production plant for the company, joining the plants in Chennai, India; Chonqing, China; and Camcari, Brazil.

Models produced at the new plant will be for the domestic as well as export markets across the ASEAN region.

Ford ASEAN president Matt Bradley said that the all-new EcoSport continues their ongoing product-led transformation by providing customers with another vehicle to their Ford showroom across the ASEAN markets.

Wednesday, January 29, 2014

Malaysia in 2013 car market hit new all-time record.

Via Focus2Move:

Despite the flat performance reported in December, Malaysian car market ended 2013 posting a new all-time record volume, the second in a string, ranking as twenty-first car market worldwide. More than 50& of sales remained concentrated in the hands of local producers Perodua and Proton.

Accordingly with data released by M.A.A., the Malaysian Automotive Association, in December total light passenger vehicles sold in Malaysia have been 60.493, flat from last year. As consequence, the year 2013 ended with a total of 654.659 units sold, 20.000 more than forecast by MAA starting the year, and 43.000 or 7.0% higher than 2012.

The market hit the new all-time record, the second in a row, confirming the Malaysian as the third largest car market in the ASEAN and the 21st worldwide.

Looking at the best brands performance:

Perodua in 1st sold 16.525 units in December with a share of 27.3%, down 4.1 points from the previous month and 196.071 units in the entire year with a share of 29.9%, down 0.3 points from last year.

Proton was 2nd with 12.801 units and a share of 21.2%, down 0.8 points from the previous month. In 2013 Proton sold 38.753 vehicles with a share of 21.2%, down 1.3 points of share from the 2012.

Toyota was 3rd and leader among importers selling 7.950 units with a share of 13.1%, down 1.2 points from the previous month. Full Year 2013 sales have been 91.185 with a share of 13.9%, down 2.9 points of share from 2012.

Honda was 4th selling 7.165 units with a share of 11.8%, up 4.7 points of share from the previous month. In the 2013 Honda was 5th selling 51.544 units with a share of 7.9%, up 2.3 points from the previous year.

Nissan was 5th with 4.427 units and a share of 7.3%, up 1.0 points of share from the previous month. During the year Nissan sold 53.156 ranking 4th with a share of 8.1%, up 2.3 points from 2012.

Isuzu ranked 6th with 1.587 sales and 2.6% of share. In 2013, Isuzu was 8th with 12.061 sales and 1.8% of share, up 0.1 points from last year.

Hyundai was 7th with 1.540 sales and 2.5% of share. In the year Hyundai ranked 7th with 12.217 sales and 1.9% of share, flat from last year.

Is green a selling point for Indonesia’s auto market?

Check out this CAMPAIGN (India) article here

In the middle of last year, Indonesia’s government slashed a huge fuel subsidy, driving local petrol prices up 44 per cent and diesel 22 per cent, putting premium fuel at 6,500 rupiah (US$0.53) per litre (up from 4,500 rupiah) and diesel at 5,500 rupiah (US$0.46) per litre (from 4,500 rupiah per litre).

Then in September a tax exemption to support production of more low-cost green cars (LCGCs) went into effect. While the government may have intended the move to attract more foreign direct investment (FDI), it also has potential to help grow the country’s automotive industry, after fuel subsidy cuts took their toll. Auto marketers have noticed the changes and have increased production and promotions.

Low cost green cars

LCGC models from Toyota and Daihatsu sell for between 76 million Rupiah and 120 million Rupiah (US$6,232 to US$9,960). Comparatively, the starting price of a combustion-engine Honda Jazz, which reportedly holds almost 50 percent of the hatchback market in Indonesia, sold for 189 million Rupiah (US$15,500) on average last year.

Olivia Sulistio, strategic planning manager at Lowe & Partners Indonesia, said the LCGC segment contributed an increase of 10.6 per cent to car sales in October, up from the previous month.

“In general, Indonesians are not known to stop buying things altogether when the price is increased,” she said. They will try to find decent cheaper alternatives, and the competitive credit rate allows them to feel that they can afford to buy.” Brands beyond the automotive world could take some lessons from the sector.

She added that the two factors that work for the LCGC segment are the affordable price and low fuel consumption, mitigating the impact of the weakening Rupiah. The selling price of LCGC, she explained, may also drop on further reduced taxes.

Two pioneer LCGC models, the Astra Toyota Agya and Astra Daihatsu Ayla, launched in September. Current models include Honda Brio Satya, Datsun GO (and Go+) and Suzuki Karimun Wagon R. Agya-Ayla.

To qualify under Indonesia’s LCGC category, a car’s engine capacity must be less than 1,200cc with a minimum fuel consumption of 20-22 kilometres per litre.

When it comes to buying vehicles Indonesians show concern for size, fuel efficiency, pricing and loan interest. Image-conscious Indonesians compromise and look for affordable cars, “if the reality does not fit the dream”, Sulistio added.

“This does not mean that people who compromise their choice feel embarrassed,” she continued. “Easier access to internet equals easier access to people who are like them. The ‘prestige’ is derived not by bucks but with belonging in a community.” The social aspect may again hold some crossover marketing potential in the wider consumer arena.

An example of a car community selling point is the Suzuki Karimun, which is a small boxy wagon and not as prestigious as some other models. But fans established a community called K3 (Komunitas Karimun Kaskus). Owners share their opinions, discuss details about their cars or how to modify them as well as make general chitchat. They also gather offline for community events.

Challenges and opportunities

In a country where the sense of belonging plays a big role, car marketers note that Indonesians generally prefer vehicles that can accommodate more people, including extended family and friends. Small, versatile MPVs fit the bill and have seen big sales in the country. This type of car is also usually higher off the ground, providing both a physical and consumer-perception advantage over sedans when it comes to navigating through the floods that plague Indonesia annually.

Some 478,300 MPV units sold from January to November last year, representing 42.25 per cent of the national automotive market that reached 1.13 million units, according to Association of Indonesian Automotive Industry (Gaikindo).

Japanese brands still largely rule the automotive industry in Indonesia, dominating the top-ten list for cars sold from 2010 to 2012. The top three cars in 2012 were the Toyota Avanza (192,146 units), Daihatsu Xenia (73,418 units) and Toyota Kijang Innova (71,685 units).

Vijay Rao, regional research director for Asia-Pacific at Frost & Sullivan, said in August that Indonesia is likely to emerge as the largest ASEAN automotive market by 2019, accounting for 2.3 million vehicles. Key market drivers include sustained economic growth in the country, an expanding middle class with larger disposable income, greater investment in the automotive sector and the introduction of automotive regulations supporting market growth.

To minimise credit risk and avoid a property bubble, the government also pushed through new downpayment rules, including a minimum downpayment regulation of 30 per cent for car purchases and 25 per cent for motorbike purchases. The low fuel consumption and selling prices have helped reduce the negative market effects of higher downpayment requirements and climbing fuel prices.

However, Adam Lau, general manager at The Campaign Palace Jakarta, said higher fuel costs may not necessarily lead to better prospects for LCGC manufacturers, as Indonesians do not prioritise ‘green’ credentials. Value for money still trumps conservation in the local consumer mindset.

Instead they look for models with lower fuel capacity (a lower cc number), which smaller MPVs and LCGCs both offer. With the society’s general preference for MPVs, smaller versions usually still win out against LCGCs.

“This perhaps explains the increasing popularity of smaller mainstream MPVs like the Toyota Avanza and the Daihatsu Xenia, which have become viable substitutes for the traditional Toyota Kijang Innova,” Lau said. “In the last 12 months as well, a small luxury MPV segment has also emerged with vehicles like the Toyota NAV1, Nissan Serena and Mazda Biante.

Hence, LCGCs may not work for some Indonesians as they only accommodate five people. LCGC manufacturers will have to build models with MPV-like seat capacity if they want the segment to become more popular.

Omar Shahab, managing director at Oze Indonesia, said the LCGC segment can alternatively target motorbike owners. However, roads and infrastructure need major improvements to accommodate the growing number of cars.

Another issue automakers need to consider is that in Jakarta, the province authority has tried to reduce the number of cars on the road. Among the regulations it has implemented is an effort known as 3-in-1, whereby each car must have at least three people in it on certain main roads during peak hours.

This has drawn much criticism, as the province doesn’t have a complete public transportation system, leaving few options for people beyond car-sharing.

Premium category

On the upside, the rising middle class and a large chunk of relatively young age groups in the country’s population have become key drivers for brands in general as well as for other automakers to launch premium or high-end models in Indonesia.

“Mostly youngsters are techno-savvy, picky and discerning consumers who want cars that match their lifestyles,” Oze’s Shahab said. “Seeing this golden opportunity, numerous automaker players are energetically expanding their range of products to Indonesia.”

Out of a total population of more than 200 million, Indonesia’s affluent population stands at about 30 million, Shahab said. The number equals the total population of its neighbour Malaysia, and more than four times that of Singapore.

Lowe & Partners’ Sulistio explained the premium car segment can curb decreasing sales by boosting the exclusivity factor or promising competitive credit rates.

As far as marketing to a wealthier Indonesia, the country claims the biggest sales contribution for Lamborghini’s 50th birthday limited edition Aventador, of which only 200 units exist globally. Sales from Jakarta accounted for 11 of them.

Indonesia’s emerging market growth, swelling middle class and youthful consumer mindset could combine to power an LCGC boom in the country. But the case holds further implications for all brands as the market becomes more sophisticated and personal preference starts to outweigh price in local buying decisions.

Monday, January 27, 2014

Indonesia: Toyota builds new engine plant

Toyota Motor Manufacturing Indonesia, the manufacturer of Toyota cars in Indonesia, is planning to start building a plant that will focus on engines in West Java this year, as it strives to develop a production base in the country.

Sunday, January 26, 2014

Thailand: Drawn-out Thai crisis unsettles investors, may deter new money

Via Chicago Tribune: BANGKOK (Reuters) - Long-term foreign investors say they are sticking with Thailand despite its political woes but the threat of worsening chaos may scare away new money as companies scope out other options in neighboring countries such as Indonesia.

Kyochi Tanada - President Toyota Thailand, Photo: Uli Kaiser
Protesters trying to topple the government have rallied in the capital, Bangkok, since November. This month they have forced ministries to close and blocked major roads. They say they will stop a general election being held on February 2.

"Assuming the political woes go on, foreign investors may decide to shift to other countries like Indonesia, Vietnam and Myanmar," Kyoichi Tanada, president of Toyota Motor Corp's Thai unit, said this week.

Malaysia: Auto policy makes big pitch to lure energy-efficient vehicle manufacturers

Via THE STAR: The Malaysian national automotive policies (NAPs) over the years had their fair share of hits and misses. Apart from addressing the price of imported cars, predominantly from South-East Asia, they have tried to bring modern practices apart from limited liberalisation of the auto industry.

But the biggest failure of past policies has been in attracting foreign car companies to set up manufacturing plants in the country. And the latest version of the National Automotive Policy aims to correct that.

The second version of the NAP in 2009 opened up the manufacturing of cars above 1,800cc and costing more than RM150,000 to foreign players. Unfortunately, it didn’t get any traction.

In 2010, the amount of foreign investments by car manufacturers was RM500mil, and that rose to RM900mil at the end of 2012. As at the end of October last year, the amount of money brought into the country by foreign car players was RM700mil. But that amount pales in comparison with the amount of foreign investments both Thailand and Indonesia have been receiving.

In comparison, domestic car companies’ investment stood at RM1.8bil in 2010 and that amount rose to RM4.1bil in 2012. As at end-October last year, RM2.3bil was invested by domestic companies in the automotive industry.

Thursday, January 23, 2014

Honda Automobile (Thailand) projects its domestic car sales will fall by 15.6% this year

The Japanese car maker Honda Automobile (Thailand) projects its domestic car sales will fall by 15.6% this year to only 180,000, in line with the country's overall car sales estimated to decline to 1.13 million vehicles.
"Shrinking demand after the government's first-time car buyer tax rebate expired in late 2012 and the political stand-off will wallop car sales this year," said executive vice-president Pitak Pruittisarikorn.

Wednesday, January 22, 2014

Chevrolet upbeat on Thai market

While the growth potential of the Thai market is limited this year and next due to the influence of the first-time car buyer tax rebate, Detroit, Michigan-based General Motors (GM) is confident it can raise exports from Thailand in 2014 in the fast-growing Asean region. In Thailand, Chevrolet sold 56,389 vehicles last year, achieving 97 per cent of its sales objectives.
General Motors Thailand achieved important production milestones in 2013. The GM power-train facility in Rayong exceeded 100,000 engine builds since its opening in 2011.

Monday, January 20, 2014

Toyota may rethink Thai investment plans if crisis lingers

BANGKOK (Reuters) - Toyota Motor Corp may reconsider investing up to 20 billion baht ($609 million) in Thailand, and could even cut production, if political unrest drags on, the head of the Japanese automaker's local unit said on Monday.

Toyota is the largest car manufacturer in Thailand, producing 800,000 vehicles a year. Plans to increase its annual capacity by 200,000 vehicles a year over the next three to four years are now uncertain, Kyoichi Tanada, president of Toyota's Thai unit, told a news conference.

"Our new investment in Thailand may not happen if the current political crisis goes on longer," Tanada said.

"For new foreign investors, the political situation may force them to look for opportunity elsewhere. For those that have already invested, like Toyota, we will not go away. But whether we will invest (further) or not, we are unsure."

Honda overtakes Toyota in passenger car sales in 2013

Via THE NATION: Toyota has lost its passenger-car crown in Thailand to arch-rival Honda for the first time in history.

Toyota started trailing behind Honda by as many as 18,000 units after the third quarter of last year but managed to close the gap dramatically during the final quarter thanks to the popularity of its Yaris eco-car.

However, by year-end the world's largest auto company was unable to overtake Honda, finishing about 3,000 units behind. Honda sold 193,185 passenger cars, up 18.2 per cent, while Toyota sold 190,101, down 15.4 per cent.

However, the gap is much larger - 213,155 units - in figures compiled by the Japan Chamber of Commerce, which includes sport-utility vehicles such as the Honda CR-V and Mazda CX-5 in the passenger-car segment. Toyota's report places the CR-V and CX-5 in the commercial-vehicle segment.

"We lost and that is not good, but on the other hand we couldn't help it, as the Yaris came out only during the final two months while Honda was able to capitalise on its eco-car during the whole year," Kyoichi Tanada, president of Toyota Motor Thailand Co, said yesterday during their annual press conference.

Thursday, January 16, 2014

Thailand again among world’s top 10 producers of automobiles

BANGKOK, 17 January 2014 (NNT) — In 2013, Thailand managed to produce 2.45 million automobiles, the most it had done so in 52 years - putting the country on the list of top 10 automobile producers in the world.

Surapong Paisitpattanapong, spokesman of the automotive industry group of the Federation of Thai Industries (FTI), revealed that 2013 was the best year for the Thai automotive industry, as the country managed to produce 2.45 million automobiles - the highest in 52 years.

Mr. Surapong stated that the political protests did nothing to deter the sales figures, as the number of vehicles sold have steadily decreased after the government’s first-car policy came to an end.

However, last December saw a 28.22% decline in production compared to the year earlier due to less demand for first-car buyers under the government’s scheme.

December 2013 exports, on the other hand, have increased by 1.93% compared to the same period of the year before, with around 40 billion baht worth of revenue. 

Thursday, January 9, 2014

Toyota Confirms Thai Production For Australia's Corolla Sedan

Via Motor Report, Australia:

Toyota Australia has confirmed that its larger and more spacious 2014 Corolla Sedan will be built in Thailand, rather than Japan like its hatch sibling.

The news will see Australia's Thai-sourced model share grow beyond the 20 percent achieved in 2013 - a share that equalled 228,479 sales and a 32.9 percent increase over the previous year.

Carmakers operating in Thailand benefit from a Free Trade Agreement with Australia that sees imported vehicles avoiding the usual five percent import duty.

Monday, January 6, 2014

Toyota leads bonus bonanza in Thai Auto Industry


ALTHOUGH THE economy has grown only slightly this year, the private sector is continuing to pay bonuses for staff, especially in the automobile, securities and property sectors, where bonuses in excess of six months' salary are being paid by some companies.

A survey conducted by The Nation early this week found that several companies had announced the payment of significant staff bonuses on the back of their financial performance for the year.

The auto industry continues to be a high-performing sector that handsomely awards its employees, with Toyota Motor Thailand announcing an average bonus of 10 months plus Bt20,000, while Honda Thailand is paying eight months plus Bt80,000, Mitsubishi Thailand is rewarding staff with seven months, and Thai Yamaha Motor is paying bonuses of four or five months' salary.

Sunday, January 5, 2014

Thai Auto lenders expect flat growth this year


After two years of healthy loan growth thanks to the government's first-car tax-break scheme, new lending for car purchases will likely be flat this year.

Anuchart Deeprasert, chairman of the Thai Hire-Purchase Association, said sales of new vehicles this year were expected to be 1.2 million units or fewer. About 85 per cent of car buyers finance their purchases with hire-purchase (lease-to-own) lenders, so if car sales are flat, auto loans will be as well, he said. Financial institutions are also expected to tighten up loan approvals because the prospects for the economy this year are not bright, and the unclear political situation does not help.

Thailand sees car manufacturing boom


At a high-tech factory in the world's fastest growing vehicle production hub, industrial robots and white-suited workers put the finishing touches to hundreds of cars rolling off the assembly line each day.

It could be a scene from Toyota City or Detroit, but this is Thailand, a country better known around the world for its beaches and rice paddies.

With major car makers hit by a global economic downturn, the Southeast Asian nation has emerged as a rare bright spot in recent years.

Thailand's auto production surged 70 per cent in 2012 from the previous year, to 2.48 million vehicles, according to the Paris-based International Organisation of Motor Vehicle Manufacturers.

Wednesday, January 1, 2014

Can Thailand's eco-car program lift the economic gloom?

Via Bangkok Post:

With the country facing political stalemate, the second phase of the government's eco-car project has the potential to strengthen the car industry and the overall economy. 

The Board of Investment (BoI) last August approved the second phase of the scheme, focusing on economic, consumer and social goals and hoping to draw 28 billion baht in investment.