SMM truck parts supplier planning to go global

Economy March 29, 2014 00:00

By Nophakhun Limsamarnphun


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Thailand's Sammitr Motors Manufacturing (SMM) Group is poised to tap global and Asean markets for truck and other vehicles' parts and accessories with a plan to get listed on the Stock Exchange of Thailand this year.

SMM Group’s annual sales revenues are estimated to be around Bt10 billion. SMM also has chosen Australia as its research and development (R&D) centre as well as its global marketing hub.

Yongyout Posirisuk, managing director of SMM, said it would invest in Indonesia shortly because it’s a big market for parts and components for heavy trucks, dump trucks and trailers.

"The Thai market where SMM is currently the leader will soon reach a saturation point, so we have to diversify and expand overseas to minimise our business risk. The Indonesian market is, for example, 10 times as large as that of Thailand," so there is a big potential for SMM products.

"For this business, we have a competitive advantage in the Asean market, where we also have the biggest production capacity for these parts and components. Our strengths in technology, production process, after-sales services, sales and marketing can be shared with business alliances in each of these Asean markets."

Ratana Stiramon, SMM’s overseas business director, said the company was also strong in pickup-truck accessories, especially steel canopies, which are exported from Thailand for sales in Australia and European markets.

"We focus on quality and reasonable price. Foreign buyers do research before making a decision, which is rather different from the behaviour of many Thai consumers, who are more attracted to give-away products provided by the marketers.

"We have also invested in research and development facilities in Australia to serve all of our product groups."

Yongyuth said SMM also saw Australia as one of the global markets for its steel canopies and other pickup-truck accessories.

"We aim to use Australia as a global marketing and R&D base, while manufacturing will take place in Thailand. To tap the world market, we also need world-class service and communication capability. Besides Australia, we also invest in Europe, but the scale is smaller. "SMM will also expand its truck and trailer components business into the Asean Economic Community market. We plan to mobilise funds from the stock market to finance our overseas expansion, not only in Indonesia and Asean but also into China.

"About 80 per cent of our sales currently come from the Thai market, so we want to boost overseas sales to a higher ratio. In Thailand, we also have expanded our manufacturing facilities for heavy trucks and trailers with a new plant at the Gateway [City] Industrial Estate to be opened next to the Toyota factory this year. Currently, we supply parts and components to Toyota, Honda and Nissan.

"Our current plant will be turned into a manufacturing hub for steel canopies and accessories for pickup trucks using our own brand, while all production for OEM [original equipment manufacturing] parts and components will be done at the new plant at the Gateway Industrial Estate.

"Regarding overseas investment, I think to be successful you need to have in-depth knowledge about the target markets, you need the right partners and management team as well as local regulations on labour and other issues.

"For pickup truck canopies and other accessories, we position our products at the global level, with Australia and Europe being the targets. Many one-tonne pickup trucks sold in Australia are assembled in Thailand, where we are one of the part and component suppliers.

"In the future, we will not only produce steel canopies and accessories in Thailand, but also in Africa or South America, with Australia being the R&D and global marketing centre.

"We also aim to turn SMM into a global brand before 2020, and we could say that Australia’s R&D capability for the automotive industry is world-class. Our Australian facilities will also design the products and do the testing before they go to the markets.

"We’ve chosen Australia rather than Japan or Germany because it’s a big market for pickup trucks, for which we can develop our accessories and related products."