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Published on November 26, 2007

Adisak Rohitasune, senior vice president of Asian Honda Motor, said auto-makers were worried about their future competitiveness, due partly to the absence of an upstream steel plant.

Sheet steel accounts for 5 to 10 per cent of automotive production costs per unit. Half the steel used in the automotive industry has been imported, with the rest coming from local manufacturers.

"We have no other choice but to import, mostly from Japan and Korea, to supply our production. We cannot bargain despite the rising steel prices in the global market," Adisak said.

However, China and India can control their costs because they have their own upstream steel plants. He said these two countries also had an advantage over their competitors because of large markets and plentiful raw materials, particularly steel.

Although Thailand's automotive industry will be one step ahead because of advanced technology, China and India are developing their production technologies so rapidly that they will soon be able to catch up with other countries, including Thailand.

Establishing a steel blast furnace would boost collaboration between auto-makers and steel producers to do research and development.

Chalida Ekvitthayavechnukul

 The Nation