Auto-maker to invest Bt1 billion more to raise production at third assembly plant here
Japanese auto-maker Mitsubishi has announced that its Thai operations have become the company’s number one production and export hub in the world.
Looking back 20 years, Mitsubishi was the first auto company to start exporting vehicles from Thailand when shipments of the Lancer were sent to Canada in 1988. In 1996 Thailand also started to export Mitsubishi pickup trucks to 139 countries around the world following major investment in an assembly plant in Laem Chabang, Chon Buri.
Mitsubishi was the top vehicle exporter from Thailand for many years. Although auto-makers took a strong blow from the 1997 economic crisis, which saw the domestic market shrink from 600,000 vehicles in 1996 to just 144,000 in 1998, Mitsubishi turned the crisis into opportunity, by making use of its export activity.
Although today Mitsubishi is the second-largest exporter from Thailand, it is still considered the pioneer in vehicle exports for the country.
Today Mitsubishi is making another move with its new strategy for Thailand. Mitsubishi Motors Thailand president Nobuyuki Murahashi talked to The Nation about the company’s new plans.
He said the parent company has designated Thailand as the top producer and exporter of Mitsubishi vehicles.
“While Japanese production today is just enough to satisfy demand for the domestic market, and Japan may be the base for product and technology development, the export base is being relocated to other countries. Thailand is considered as the number one production base for Mitsubishi worldwide,” he said.
Mitsubishi is preparing to invest an additional Bt1 billion in 2013 to raise production at its Bt15-billion third assembly plant in Thailand. This is to cater to the expected growth in the near future.
Mitsubishi expects the Thai auto market to reach 2 million vehicles per year in the future, up from a record 1.35 million this year (an increase from the original 1.2-million forecast). In 2013 the Thai market will still be large, with sales of 1.1 million-1.2 million vehicles, thanks to the effects of the Thai government’s First Car Buyer Programme.
The auto-maker has also raised its forecast for the third time to 126,000 vehicles (up from the 120,000 prediction made during the mid-year period). Next year it also plans to sell 126,000 vehicles.
“Mitsubishi has a production capacity of as much as 335,000 vehicles per year from the three plants. During the first eight months we produced 205,000 vehicles,” Murahashi pointed out.
He said Mitsubishi plans to raise the production capacity of all three plants to 510,000 vehicles per year in 2013, making Thailand its largest producer.
“We will need to invest another Bt1 billion to raise capacity at our third plant, and Bt3 billion-4 billion for maintenance of machinery as well as changing of jigs and molds for upcoming models,” he said.
However, for now the company will be content with production of 500,000 vehicles for the next few years, he said, adding that Mitsubishi has many assembly plants around the world – such as in China, India and Russia – that are still growing.
“But Thailand has great opportunity, and exports may be in the form of CKD [Completely Knocked Down] kits to plants around the world rather than CBU [Completely Built Up] vehicles. We think that the Thai plant has great potential for this,” he said.
In August, Mitsubishi sold 11,653 vehicles in Thailand, up 77 per cent from the same month last year. Passenger car sales surged by 580 per cent to 4,131, thanks to the Mirage eco-car that has been highly popular. Meanwhile, pickup sales were 7,522 units, up 25.9 per cent.
Sales of the Triton pickup has grown from 4,000 per month to 5,000 per month, he revealed.
During the first nine months of the year, the company sold 86,595 vehicles, comprising 21,673 passenger cars, 44,545 pickup trucks and 20,377 Pickup Passenger Vehicles (PPVs).
After the launch of the Mirage in May, 21,600 orders were placed for the car, Murahashi added.
Meanwhile, the export target for 2012 is 248,000 vehicles. Mitsubishi has already shipped out 170,000.
“Mitsubishi presently has a market share of almost 10 per cent, but our plan is to have a 15-per-cent market share in the near future, and that is highly possible. Apart from pickup trucks, the eco-car is another product that will play a major role in our marketing plans,” he said.
Of the 126,000 vehicles it plans to sell in Thailand this year, 55,000 will be Tritons, 25,000 Pajero Sports and 4,000 Lancers and Lancer EXs. The Mirage eco-car will make up the rest,” he said.
Murahashi also revealed that Lancer sales are not growing, while other companies are facing the same situation in the C-segment market, unlike the fast-growing B-segment and eco-car segment that are enjoying benefits from the First Car scheme.
The third plant, which makes the Mirage, will produce 51,000 of the cars for the domestic market, 37,000 for the Japanese market and 34,000 for other overseas markets, he said.
He added that the future for the eco-car market in Thailand is bright and has more growth potential, and the Mirage could be further developed to offer more variants plus the use of alternative energy. It will be important in helping Mitsubishi increase its market share in the future.
“Apart from the 4-door Mirage that will be introduced in the near future, we also plan to introduce other new variants based on the Mirage platform, including electric cars. Although right now we have not received any further word from the Board of Investment concerning the invitation for battery companies to invest in Thailand, we are confident that there is a good future waiting. Thailand has the best capability in this region to produce electric vehicles,” Murahashi said.
Mitsubishi previously announced that its Thai operations would produce a full range of vehicles, and its alternative energy car plan in Thailand would follow the pattern of Mitsubishi Motors Corporation of Japan that wants to eventually produce electric vehicles in the future.
In 2010 Mitsubishi signed an agreement with the Thai government to study the possibility of using electric cars in the Kingdom. In mid-2011, it joined hands with the Metropolitan Electricity Authority and PEA Encom International to prepare the infrastructure for electric vehicles as well as conduct market research.