The auto industry is expected to get a big boost from GM Thailand's decision to join Phase 2 of the government's ambitious eco-car scheme.
The Board of Investment’s deadline for applications for the new phase is the end of this month.
Marcos Purty, the new managing director of General Motors Thailand, said yesterday that the company’s intent to develop a new Chevrolet car for production in Thailand was well aligned with the objective of the eco-car programme.
“By submitting this application, GM reaffirms its commitment to invest in Thailand and make Rayong a strategic hub for global exports. Additionally, this investment will bolster our long-term commitment to the excellent regional supplier network,” he said at the unveiling of the 2014 Captiva at the Bangkok International Motor Show, which opens for the general public today.
Before GM, Ford and Mazda had expressed interest in the eco-car scheme. All five brands from the first phase – Nissan, Toyota, Honda, Suzuki and Mitsubishi – are expected to apply for the next phase.
The specifications for Phase 2 are for the vehicle to be all new, fuel-efficient, environmentally friendly, safe, low-cost, and available for sale throughout the region by the end of the decade. Eco-cars are expected to use many locally produced components, including for powertrains.
The second phase is part of the country’s plan to boost annual car production to 3 million units and further strengthen its standing in Asean. It will also raise the country’s manufacturing quality and ensure that the eco-cars match the standards of developed markets like North America and Europe.
The vehicles must emit less than 100 grams of carbon dioxide per kilometre.
In return for their investment, which is expected to approach Bt6.5 billion, manufacturers will be granted incentives like a 90-per-cent waiver of import duties on parts.
The Thai auto industry is now driven by exports, as previously inflated domestic demand weakens. Auto sales in the first two months plunged by 45 per cent year on year to slightly over 140,000 units.
However, auto companies expect the annual motor show running until April 6 at Muang Thong Thani to propel local demand. The show should generate 35,000 orders for auto companies, event organiser Prachin Eamlumnow said.
There are many new models and promotions to woo customers, but the political situation is denting sales.
“We can’t deny that the political situation has created a negative effect on the market, but the large number of new models being launched should help stimulate demand,” he said.
The event, considered the largest of its kind in Asean, showcases 28 automobile and seven motorcycle brands.
Pitak Pruittisarikorn, chief operating officer of Honda Automobile Co, said automakers were unable to predict the long-term market situation because of the political chaos.
“We can’t judge the future market from the present situation and we are hoping that things will cool down in a month or two. Only when it ends will we be able to come up with accurate figures,” he said.
Carmakers must operate with high flexibility and follow the situation closely to minimise the damage, he said. Many will be looking for ways to increase shipments abroad to offset the decline in the domestic market, but that won’t be easy.
“Export plans are managed by the parent company and are difficult to change. Nevertheless, every company with production will have to try to find ways to increase exports based on each company’s situation,” Pitak said.
Honda estimates that the domestic auto market will reach 1.1 million units this year, but some at GM believe that it could drop to a million.
Gustavo Colossi, vice president for sales and marketing at Chevrolet Sales Thailand Co, said a clearer picture would be seen in a week.
“March is considered as a critical month for auto sales, so the end of this month will give us a better hint of the future,” he said.
While Toyota and Honda will be enjoying brisk sales from the Corolla Altis and minor-change Civic, Mazda will be aiming to win a large slice of the C-segment (the third-smallest category) with the all-new Mazda3, which is its first model assembled in Thailand to feature full SKYACTIV technology.
In the luxury market, BMW is highlighting its i8 hybrid sports car as well as the 2 and 4 Series, while Porsche is offering new models and such variants as the Macan SUV and 911 Turbo S. Mercedes-Benz is staging the Asean launch of the new C-Class and GLA-Class, the latter based on the A-Class platform.