Golden year for auto industry

Auto & Audio November 30, 2012 00:00

By Kanittha Pantong
The Nation

8,008 Viewed

With 2m-vehicle production mark broken, sector aims for 3m


This year can certainly be considered the golden year for Thailand’s automobile industry. 
Just grab a look at these figures: apart from achieving a new sales record of an expected 1.4 million vehicles, 2012 also marks the first year that the industry has broken the 2-million-vehicle production mark. 
Auto exports from Thailand this year is estimated at Bt1 trillion, making the auto industry the biggest earning industry, with 1-tonne pickup trucks and eco-cars as the mainstream products, as well as auto parts and components. 
Watching this growth trend, many are already eyeing the 3-million-vehicle production mark for the auto industry. 
The Industry Ministry along with the Federation of Thai Industries (FTI), the Auto Industry and the Auto Parts Industry Club of the FTI, Thai Automotive Industry Association (TAIA), Thai Auto Parts Manufacturers Association (TAPMA), Board of Investment (BoI) and the Thai Automotive Institution (TAI) recently celebrated the 2-million-vehicle production success and is eyeing production of 3 million vehicles in 2017. 
FTI president Payungsak Chartsuthipol said the auto sector has grown into a strong industry with continuous support from the government and private sectors that jointly drove the whole industry forward. 
“While the government came out with [positive] policies, the private sector carried them out and helped raise competitiveness at the global level. The result is becoming of the world’s top 10 auto-producing countries,” he said. 
The auto industry accounts for 10 per cent of the country’s GDP and Thailand is expected to secure the world No 10 position in auto production as the year ends. The country is already ranked 6th in the world for auto and auto parts exports. 
It is expected that by the end of 2012, total auto and auto parts exports from Thailand would exceed Bt1 trillion – 1 million automobiles worth Bt600 billion and parts worth another Bt400 billion. Indeed, this makes the automotive industry the top exporter of the country. 
Today, Thailand has 2,500 factories for auto assembly plants, auto parts and related industries. In 2012, the investments made by the auto and auto parts industries through the BoI amounted to more than Bt202 billion, up 95 per cent from last year. 
In terms of technology, an important factor in automotive industry development, research and development centres have been set up by major auto and auto parts producers. There are no less than nine R&D centres in the country that help transfer production and industrial management technology. This helps Thailand to develop its production quality and match the quality of the world’s leading countries under the “Made in Thailand” badge. 
In social and environmental issues, the auto industry has also played an important role in raising the quality of life and of society, through development of its workforce. In addition, it has contributed to the development of transport and has spread development to rural areas. 
The auto industry has also been at the forefront in raising environmental awareness. It stated with production of automobiles and parts with Euro standards and emissions that match international standards. It has also been continuously developing eco-friendly technology as well as staging social and environmental activities. 
At the Motor Expo today, Prime Minister Yingluck Shinawatra will preside over the “2 Million Units of the Thai Automobile Industry: A New Dimension to Global Success” event, and deliver a special speech. The event will be held at the Royal Jubilee Ballroom, Challenger Hall, Muangthong Thani. 
An exhibition displaying 50 years of the Thai auto industry will also be staged at the entrance to Challenger Hall. 
Meeting the 3m-vehicle challenge 
Suparat Sirisuwannangkura, chairman of the Automobile Industry Club, Federation of Thai Industries (FTI), talked to The Nation about the scenario and direction of the Thai automotive industry. 
“Although the East Japan Quake and the Great Thai Flood in 2011 had caused 350,000 automobiles to vanish from the system, and prevented Thailand from achieving production of 2 million vehicles, the exceptionally high growth, both in the production and sales sectors in 2012, is pushing total auto production past the 2.2-million-vehicle mark,” he said. 
“But the important thing is to create stability for Thailand as the auto production centre of Asia and make it last”, he pointed out. “In the past, the Thai auto industry has seen more than Bt100 billion in R&D investments from auto companies and auto-parts makers. 
“The future challenge is the 3-million-vehicle production target in 2017 to supply Asia-Pacific and global markets,” Suparat said. “It is highly possible that Thailand would replace other countries as auto exporters due to the strong foundation of the Thai auto industry as a whole. This also includes the auto parts industry, and that is the next step in creating sustainability for the Thai auto industry on the global stage.” 
He said that another positive domestic factor that created demand for automobiles is economic growth, and the Thai government’s plan to invest in basic infrastructures for the public at urban areas. This would help spur demand for automobiles since people need transportation to and from the city. Meanwhile, growth in the agricultural sector and the government’s short-term stimulus programmes such as the First Car Buyer Programme also contributed to the growth. This would raise the vehicle ownership ratio in Thailand to 5-6 people for every vehicle against 7-8 at present. In Japan it’s two cars per person. 
“In 2012 we will produce more than 2 million vehicles and in five years we will beat that by another million,” Suparat said. “This is a quicker plan than in 2005 when we made 1 million vehicles, he said. It took seven years to achieve the second million because manufacturers had to face a large number of obstacles including the tsunami and flood in 2011, as well as the financial crisis.” 
Due to the positive factors mentioned, Thailand should make use of the economic growth in Asia while Europe and the US are stagnant, and move forward in supporting the automobile industry. Moreover, the start of the Asean Economic Community (AEC) in 2015 will provide even more opportunities. The AEC is another factor that will help drive the Thai economy forward, he added.