July 27, 2012 00:00
By Kanittha Panthong
With the eco-car becoming a roaring success, BoI looks to speed up plans for 'third champion product'
It seems that the rising popularity of the eco-car is driving the Board of Investment (BoI) to accelerate plans for the "third champion product” – the electric car project – that would continue to carry the torch in Thailand’s quest to become an automotive superpower.
More than 200,000 eco-cars have been sold, and there's a waiting list of more than 20,000 for each model. The models in the market are the Nissan March and Almera, the Honda Brio, the Mitsubishi Mirage and the Suzuki Swift.
BoI secretary-general Atchaka Sibunruang told The Nation that once all five manufacturers (the other is Toyota) reach maximum production capacity of 100,000 cars per year, investment in the eco-car project would exceed Bt200 billion. This means that from today, more than Bt100 billion will pour in thanks to the project.
But in terms of maintaining a steady growth for the future, the BoI is looking at the third champion product and is formulating a package in order to create motivation for investors as well as clearly announce investment promotions for automotive companies.
The BoI is already talking with electric car specialists like Mitsubishi and Suzuki to find the right direction, whether in terms of tax structure, investment requirements, production capacity or infrastructure.
Atchaka previously said she and the prime minister had discussed policies of attracting Japanese investors to start off a hybrid battery production base in Thailand. Premier Yingluck Shinawatra is expected to negotiate investment requirements during her next road show to Osaka, Japan.
She said this scheme would follow the eco-car project, which was promoted during the last two years. Electric cars would be ideal as a follow-up project but Thailand must be able to produce the batteries. The BoI is preparing to approach the government concerning the policies and conditions for investment, which should be concluded in the near future.
“All auto manufacturers see the possibility of electric car production, whether it is Mitsubishi or Suzuki or Nissan. If we can finalise the investment details, it would help Thailand become an electric vehicle production base in the near future. When that time arrives, battery technology would have improved and would be much cheaper with mass production. This would drive down the cost of producing electric cars, and demand will follow. The next 2-3 years is the right period for going ahead with the electric car project as the eco-car project is stabilising,” she said.
TAIA: Time to go high-tech
Thai Automobile Industry Association (TAIA) president Piengjai Kaewsuwan said his association has started discussing with auto-makers the direction of the third champion product.
“The TAIA thinks it is time for Thailand to continue on to its next project and produce more advanced vehicles. This would mean much higher value-added activities for the production process by parts makers, while the potential of personnel and workforce will also be developed. There is high possibility that Japanese companies will relocate their factories to Thailand and the Asean region due to the rapid growth in this region and the continuous appreciation of their yen currency,” she said.
Also, a source from the Industry Ministry said investment in an electric car battery base is very possible in the future, as Japan’s automobile production hub is already located in Thailand.
“The infrastructure for charging can be created easily, because most buildings in Thailand use 3-phase electricity, which is high-current electricity,” he said.
The principles and details to be offered to Japanese investors would have to be discussed with the BoI before being presented to Prime Minister Yingluck, he said.
Additional investments for eco-car
Atchaka said that Mitsubishi has decided to raise investment in its eco-car base from Bt7 billion to Bt15 billion, with production to double from 100,000 to 200,000 cars per year.
Mitsubishi has recently commenced export of the Mirage to Japan, but has also announced a recall for approximately 10,000 cars for faulty fuel gauges. Mitsubishi Motors Thailand president Nobuyuki Murahashi said the Mirage would go on sale in Japan from August. Production for Asean started in June this year and the Thai-made Mirage will also be offered in Europe, Australia and North America. A total of 120,000 units are expected to be produced this year. Meanwhile, Suzuki has a production capacity of just 50,000 cars per year and is capable of assembling 15,000 Swifts in 2012.
The company is planning to offer a manual gearbox version of the Swift (in addition to the automatic) starting in October, with a second shift to be introduced at the assembly plant. Suzuki’s target in 2013 is to shorten the customer waiting period to just 1 month.
Nissan announced that come August it would have delivered 100,000 March and Almera cars since the project started around two years ago.
It has been reported that Renault could use the Nissan facility in Thailand to assemble the Renault Clio 4, which would mark the French brand’s return to the Thai market.
But there is a considerable waiting list for eco-cars. The Mirage has more than 25,000 back orders and the waiting period is 5-6 months. The sales targets for the March and Almera are 36,000 and 32,000 respectively. As for the Swift, customers who place an order today will get their car only in April next year.
BoI’s eco-car requirements
1. Investment must be presented as a package.
2. The project cost must be no less than Bt5 billion.
3. True production must reach 100,000 cars per year by the fifth production year.
4. Fuel economy needs to be at least 20km/litre.
5. The cars must have the EURO 4 emission level or better.
6. They should also have UNECE Reg 94 and Reg 95 safety levels.
7. Four of five main components (cylinder head, cylinder block, crankshaft, camshaft and connecting rod) must be produced locally.