Isuzu to boost capacity in Thailand over 5 years

Corporate October 20, 2014 01:00

By Kwanchai Rungfapaisarn
The Na

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Isuzu Motors, a leading manufacturer of commercial vehicles and diesel engines, has committed itself to continuous investment in the Kingdom, where it plans to boost its manufacturing centre for pickup trucks destined for both the Thai market and other co



The company revealed a strategic plan to double the combined manufacturing capacity of its facilities at Samrong in Samut Prakan province and the Gateway City Industrial Estate in Chachoengsao province, from between 250,000 and 260,000 units targeted for this year to about 500,000 units within five years. 
Half the output will be for Thailand, and the other half for export to more than 110 markets. 
The expansion will allow Isuzu promote economy of scale at its Thai facilities, which will lead to lower production costs.
While declining to disclose the amount to be allocated to the capacity expansion, Hiroshi Nakagawa, president of Tri Petch Isuzu Sales, said Thailand had retained its strength as an attractive investment destination for Japanese auto-makers, including Isuzu, all of which had set up manufacturing facilities here.
Thailand will, however, be challenged by new competitors, particularly Indonesia, which benefits from a large market, driven by a population of over 200 million, he said. 
The total auto market in Indonesia amounts to about 1 million units, which is similar to Thailand, whose population is around 70 million people, he added.
“Leading auto-makers, especially from Japan, have been investing in Thailand for a long time and they have enjoyed a strong supply chain as well as support here. What they want to see from Thailand from now on is a regaining of confidence and a better investment climate. 
“The Thai government should manage all procedures, such as the tax system, that encourage investments, if we are not going to lose competitiveness to Indonesia,” he said.
He added that the Asean Economic Community would benefit the commercial vehicle market in Thailand, which is strategically located within the regional grouping. 
The development of the AEC will drive significant growth in Thai local logistics industry, and also sales growth of light and heavy commercial vehicles, Nakagawa said.
Tri Petch Isuzu Sales is a joint venture between Mitsubishi Corp, a Japan-based global trading firm, and Isuzu Motors. With  57 years of business experience in Thailand, the company has applied its Thai success model to other markets.
Isuzu Motors relocated its manufacturing base for Isuzu D-Max pickup trucks from Japan to Thailand in 2002 with the establishment of its local manufacturing subsidiary, Isuzu Motors International Opera-tions (Thailand). 
The company started the export of pickup trucks – to Italy and Greece – the following year.
Nakagawa, who has been in Thailand for about six years, is also a director at Isuzu Motors Inter-national Operations (Thailand). 
He said the overall vehicle market in Thailand should be less than 900,000 units this year, down from 1.3 million units last year. The number of auto sales peaked in 2012, when the then-government launched its first-car scheme and pushed the market to about 1.4 million units in sales volume.
Isuzu, meanwhile, produced about 300,000 pickups, including completely knocked-down units, last year, a level that will fall to between 250,000 and 260,000 units this year, split roughly equally between the domestic and export markets.
“The overall vehicle market in Thailand is expected to hit about 1 million units next year, and we expect to share between 18 per cent and 20 per cent,” he said. 
“For overseas markets, our medium-term ambition is to increase the market share of Isuzu pickup trucks in any market we have entered, especially the Middle East,” he added.