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Published on August 31, 2007

As a speaker at yesterday's "Effect and Adjustment for Auto-Parts Industry after Signing JTEPA" seminar, Thavorn Chalassathien, chairman of the Federation of Thai Industries' Auto-Parts Industry Club, said most of the pact's contents would benefit Thailand.

It will increase local makers' potential to be more competitive with cheaper parts from China due to lower import and export duties, he added.

Adisak Rohitasune, senior vice president of Asian Honda Motor, said local parts-makers would not benefit in terms of exports in the short term.

"However, it will increase Thailand's potential to be the world's automotive production hub to produce and export some models to third-world countries," he said.

However, Thavorn said local parts-makers would face tougher competition because automotive companies would prefer to import finished vehicles rather than assembling parts and components here.

Therefore, the private sector suggested that the government revise the tax structure in order to prevent an incongruity between raw material and finished-product taxes.

In order to attract operators to invest in more up-to-midstream production, the government should exempt raw-material taxes and collect less tax on midstream products than on downstream goods, he said.

Moreover, he said the government should speed up making a decision to create a testing centre to increase and assure production quality to meet international standards.

"Without our own testing centres, how can we become the leader in automotive industries?" he said.

Thavorn added that the government should be an investor in this project for the sake of local companies, which had no potential to make such a huge investment.

Meanwhile, Thai Automotive Institute director Wallop Tiasiri said the institute would hold a public hearing on the drafted automotive master plan on September 20.

After the hearing, the plan will be forwarded for the consideration of Deputy Prime Minister and Industry Minister Kosit Panpiemras by the end of next month.

The master plan will focus more on collaboration between the public and private sectors by targeting turning Thailand into a regional automotive production base.

Chalida     Ekvitthayavechnukul

 The Nation