Friday, August 22, 2014

Thailand will extend its dominance as the “Detroit of the East”

Via Malaymail Online:

The protection afforded to national carmakers Proton and Perodua will cause Malaysia to lose out to neighbours when an Asean caucus comes into effect next year, the Economist Intelligence Unit (EIU) has projected.

In a report summarising the possible effects of the Asean Economic Community (AEC) set to be formalised on December 31, 2015, the business advisory services arm of The Economist said Malaysia’s barriers to entry have blunted the competitiveness of both local carmakers and made the country less attractive than giants Thailand and Indonesia.

“The AEC signifies the arrival of a more level playing field, less protectionism and greater competition,” the EIU wrote in its report.

“Malaysia, the third-largest producer, is likely to suffer under AEC. Foreign firms in the country need to enter joint ventures with local partners, which has produced uncompetitive national champions, Proton and Perodua. More competition will challenge their dominance.”

The AEC aims to create a unified market and production base that theoretically would promote the free movement of goods and labour.

The detriment from the AEC’s liberalisation to Malaysia is two-fold, with the country losing out further on potential manufacturing and assembly jobs as car makers look elsewhere to set up shop and continuation of government support to prop up local automakers as competitors arrive.

While manufacturers have invested in full-fledged production facilities in Thailand, their Malaysian operations are generally limited to part-assembly operations geared to meet requirements for preferential tariffs and strictly for the local market.

On the consumer side, Malaysians pay some of the world’s highest prices for cars owing to a combination of duties and taxes initially introduced to provide Proton a price advantage, and policies to discourage foreign competition.

With the arrival of the AEC, the EIU said Thailand will extend its dominance as the “Detroit of the East”, as more manufacturers adopt the so-called “Thailand+1” strategy.

Thursday, August 7, 2014

BMW Thailand appoints two GMs


BMW Group Thailand has announced the appointment of Preecha Ninatkiattikul as general manager of Mini Thailand.

Jatupon Puttaviboon, former Mini general manager, became general manager for Dealer Development at BMW Group Thailand on August 1.

With more than seven years at Mini, Preecha returns to lead Mini Thailand from Mini Asia in Singapore, where as head of Mini he spent five years overseeing the expansion of businesses in importer markets in Asia and Oceania - Singapore, Indonesia, Philippines, New Caledonia, Tahiti, Brunei, Vietnam and Sri Lanka.

During Preecha's tenure in Singapore, Mini sales in the region jumped from just 300 in 2009 to more than 1,000 in 2013.

"BMW Group Thailand is proud to welcome Khun Preecha home to Mini Thailand after five years in Singapore," BMW Group Thailand president Matthias Pfalz said. "At the same time, we are extremely pleased to have Khun Jatupon take over Dealer Development from August 1, 2014. Both gentlemen will further develop our strategic business growth in the years to come."

Wednesday, August 6, 2014

Southeast Asia: Next boom market? Auto industry's enthusiasm cools for Brazil, Russia, India.

Via Automotive News: Auto industry executives are still upbeat about China, but their enthusiasm for the other BRIC countries has waned.

New markets are in demand -- and are being discovered -- such as Southeast Asia.

Stefan Wolf, CEO of German parts maker ElringKlinger, sums up the situation: "You can delete the letters B, R and I from the once highly praised BRIC nations. Only the C is left. By contrast, the ASEAN zone offers strong sales potential for the vehicle industry."

The B, R and I stand for Brazil, Russia and India. ASEAN is the Association of Southeast Asian Nations, a political and economic organization of 10 countries.

Raphael Berthoud, who is responsible for India and Thailand at Faurecia Interior Systems, stresses that "Southeast Asia, especially Thailand, is a major growth market for the automotive industry."

Japanese automakers have long had a presence in the region, which has about 600 million inhabitants, but Ford and General Motors have settled into Rayong, Thailand, as well, Berthoud said.

In addition, Volkswagen assembles vehicles from kits in Malaysia with partner DRB-Hicom.

Rudi von Meister, president for the Asia-Pacific region of ZF Friedrichshafen AG, emphasizes that "many of the next 15 countries with up-and-coming economies are located in Southeast Asia."

ZF has been active in a number of these "BRIC successor states," in some cases for years.

Ralf Dieter, CEO of Duerr AG, also has confidence in Southeast Asia.

"Experts expect vehicle production in Thailand, Indonesia and Malaysia to rise about 40 percent by 2018," he said. "In the course of this growth, international automakers will expand their production capacity in the region."

Tuesday, August 5, 2014

Thai coup knocks GM off course in Asean

Via Financial Times:
General Motors said it was “struggling” in southeast Asia as the recent military coup in Thailand knocked sales, compounding stiff competition from Japanese rivals and local currency weakness that has hurt the profitability of imports.
The admission is a sign that fluctuations in emerging market currencies are causing the largest US carmaker by sales to rethink its strategy in a region seen by carmakers as one of the world’s most promising and increasingly benefiting from a rising middle class.

“We are struggling in Asean for many reasons – mainly due to the political impact in Thailand,” said Stefan Jacoby, head of GM’s consolidated international operations, a unit that includes all of the carmaker’s businesses outside North America except China and Latin America.

Monday, August 4, 2014

Mazda plans to end Thai passenger vehicle production JV with Ford

Mazda is said to be planning to dissolve a passenger vehicle production joint venture (JV) with Ford, reports Nikkei Report. According to the news service, the Japanese automaker intends to take over the production line currently run by Ford, which would initially lift its production at the Auto Alliance Thailand site from 50,000 units per annum (upa) to 100,000 upa by 2018. Ford will shift production to its other site in the country in stages. Mazda also intends to produce engines at the same site by then, with total investment reaching JPY30 billion (USD294.6 million). However, Mazda and Ford will retain stakes in a site that will continue to produce pick-ups for the pair.