Transcript Thailand - German Global Trade Forum Berlin

Thailand : Detroit of Asia
By..
Mr.Ninnart Chaithirapinyo
Vice Chairman
The Federation of Thai Industries
Toyota Motor Thailand
Today’s topic
I.
Where are we?
II. Where will we go?
III. How will we go?
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
’70
’90
• Local content
regulations
• Ban for CBU
vehicle import
’00
’05
• Deregulation of
Local content
• Tariff reduction
‘10
• Free
competition
25% local
Increase of Abolishment
AFTA Tariff
FTA
Content
local
of local
Negotiation reduction
requirement content to 50% content
to 0%
Regulation
Vehicle Assembly
Deregulation
Asian Car
Liberalization
Higher
competition
Global Car
Country Competition Regional Competition Global Competition
1.2 PRODUCTION CAPACITY IN 2005
Company
1. TOYOTA
2. ISUZU
PC
200,000
4. AUTO ALLIANCE
(Ford& Mazda)
5. HONDA
CV
TOTAL
200,000
50,000
450,000
180,000
20,000
200,000
50,000
100,000
20,200
170,200
2,700
132,300
-
3. MITSUBISHI
1 TON P/U
120,000
-
135,000
-
-
120,000
6. GENERAL MOTOR
20,000
95,000
-
115,000
6. NISSAN
33,200
66,400
2,400
102,000
28,800
28,800
8. HINO
-
-
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
1.3 Market ratio
P/U Ratio
= 58%
Local Content = 80-90%
P/C Ratio
= 33%
Local Content = 30-70%
1.4 Industry structure
Foreign
Joint Venture
LEs
Assemblers
12 Companies
Tier 1
Pure
Thai
354
Foreign
Majority
287
Thai
Majority
68
709 Companies
SMEs
Tier 2&3
LOCAL SUPPLIERS
1,000
Companies
Contribution of Auto Industry to Thai Economy
Auto
Industry
Auto Industry
8%
16%
GDP
EMPLOYMENT
Manufacturing Sector
1.5 Production, Domestic sales and Exports
Unit
1,000,000
Production
900,000
Sales
Exports
928
800,000
750
700,000
571
600,000
485
500,000
626
584
589
459
525 559
449
533
411
434
400,000
389
409
327
332
363
300,000
296
158
200,000
100,000
21
8
612
14
42
66
262
218
130
152
175
233
229
180
144
0
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005(17)
1.6 Thai Export Value
Million US$
(Ranking compared with other products)
10,000
No.1 Computer 9,320
9,000
No.2 Vehicles & Parts 5,681
No.3 Circuit Board 4,974
No.4 Rubber 3,432
8,000
7,000
No.5 Plastic 3,132
6,000
5,000
4,000
3,000
2,000
1,000
0
2001
2002
2003
2004
2005(1-7)
1.7 World Productions & Sales Ranking in 2004
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
In 2005
Thailand will
rank No.14 in
Production and
No.17 in
Domestic sale
and will celebrate
One Million
Productions
in December
1.8 Productions, Domestic Sales and Exports in 2005
FORCASTING, 2005
1,200,000
1,000,000
Production,
1,180,000
800,000
600,000
400,000
Domestic
Sale,
680,000 Export,
200,000
500,000
0
2005
EXPORT FORCAST 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
II. Where will we go?
Detroit of Asia’s Target
Production 1.8 million units with export 40% in 2010
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
III. How to go?
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)
(Joint project among Jetro, JCC,TAI, FTI)
3.2 R&D and Training Fund
SOURCE OF FUND
90%
• CAR
ASSEMBLERS
• PART MAKERS
Car assemblers
withdraw for
• Oversea &
Domestic training
• Scholarship
• R&D
R&D
TRAINING
FUND
100%
10%
SMEs withdraw
for
• Training
• R&D
R&D and Training fund will be managed by term committee
3.3 Free Trade Agreements
To expand
additional
market
INDIA
CHINA
(Pop~ 1,000 million)
(Pop~ 1,300 million)
PERU
(Pop~ 28 million
BAHRAIN
AUSTRALIA
(Pop 0.9 million)
(Pop ~ 20 million)
THAILAND
(Pop ~ 64.8 million)
AFTA
NEWZEALAND
(Pop ~ 500 million)
(Pop ~ 4 million)
JAPAN
BIMSTEC
(Pop~127 million)
AMERICA
(Pop~292 million)
3.3 Free Trade Agreement
: Australian Tariff Reduction
5%
5%
4%
5%
4%
10 % increase
In export
3%
3%
2%
2%
Tariff reduction
1%
0%
1%
0%
2004
2005
16%
14%
12%
15%
10%
30 % increase
in export
8%
6%
4%
0%
2%
0%
2004
2005
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
II. Enhancing trade in Auto components
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.
The opportunities for Automotive Industry
III. Enhancing in Services and Investment
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.
Japan-Thailand Economic Partnership Agreement
I. Automobiles
2005
Passenger car
Exceed 3,000 cc.
Passenger car
less than
3,000 cc.
80%
2006
75%
2007
70%
2008
65%
2009
60%
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
Tariff over
20%
The tariff rate will be reduced to 20%
and maintained before eliminate in 2011
Tariff at 20%
and below
The tariff rate will be maintained and
eliminated in 2011
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 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 2005
1. 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
4
4.2 Global Brands in Thailand
< EUROPE >
Citroen, Peugeot,Volkswagen
,BMW, Volvo ,Daimler
ANNUAL PRODUCTION
CAPACITY
1.2
MILLION UNITS
< USA >
Ford + Asia Pacific HQs
GM + Asia Pacific HQs
Chrysler
< JAPAN >
Toyota+ R&D Center
Honda + R&D Center
Isuzu,Mitsubishi,
Mazda,Hino, Nissan,
4.3 Car ownership
Possibility for expansion potential
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
4.4 Why Thailand

Political stability
 liberalization policy
Government
 Attractive government
incentives

Infrastructure
Good & Massive infrastructure
network
( Electricity ,Telecommunication ,
Air ports , Ports )
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

People
Abundant of quality labor
forces
 Language proficiency
 Hospitality and friendly attitude

Amenity
Delicious foods and fruits
 Attractive tourist places
 Plenty of golf courses
4.5 Low Cost & Competitive Market
1. Mirror Set
2.Glass set
4.5 Low Cost & Competitive Market
3.Stamping part
4. Insulator Set
4.5 Low Cost & Competitive Market
5.Rubber Set
6. Interior Set
4.5 Low Cost & Competitive Market
7. Engine Set
DIESEL
GASOLINE
4.6 Opportunity for Auto Industry
INSUFFICIENT COMPONENTS PRODUCED IN THAILAND
•
•
•
•
Opportunity to
invest
in Thailand!!
•
•
•
•
•
•
•
•
•
•
* New investment
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
4.6 Opportunity for Auto Industry
PARTS 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
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 Industry
POTENTIAL BUSINESS
GROWTH FOR
NEW/EXISTING
INVESTORS
BRIGHT FUTURE
THAILAND
GOVERNMENT
PRODUCTION
SUPPORT
VOLUME INCREASE
+
+
EFFORT OF THE
100%
PRIVATE SECTOR
LOCALIZATION
Vielen vielen Dank