CNH Industrial, a US-based manufacturer of agricultural and construction equipment and commercial vehicles, yesterday opened its regional headquarters in Bangkok in a move that recognises the importance of the Thai domestic market and the country’s hub status within Asean.
CNH Industrial said the Thai corporate entity was set up with registered capital of US$10 million, with Thailand to serve as an operational base for the Southeast Asian market.
It said the establishment of the regional headquarters in Bangkok was in line with a strategic plan to cash in on the double-digit sales growth seen in developing markets, especially those in Latin America and the Asia-Pacific region. The push into these growth markets is also aimed at offsetting the company’s flat revenue in developed markets, such as in Europe and North America.
Listed on stock exchanges in New York and Milan, CNH Industrial claims it is a global leader in the capital-goods sector. The company designs, produces, and sells agricultural and construction equipment, trucks, commercial and speciality vehicles, and buses, in addition to a range of powertrain applications.
The company has 64 manufacturing plants and 49 research and development centres, with almost 63,000 workers.
CNH Industrial last year posted revenue of $24.87 billion, with $3 billion of that coming from the Asia-Pacific region. The company has 12 brands in its portfolio, of which nine are in Southeast Asia, including New Holland Agriculture, Case IH, and Steyr in agricultural equipment; Case and New Holland Construction in construction business; and Iveco, Iveco Astra, Iveco Bus, Heuliez Bus, and Magirus in commercial vehicles.
Mark Brinn, CNH Industrial’s managing director for Southeast Asia, Pakistan and Japan, said the Bangkok regional base would handle direct distribution and provide maintenance and training services, with its main focus on agricultural equipment.
He said the company planned to integrate its construction and commercial-vehicles businesses within the portfolio of the Thai operations in the near future.
“We are also investigating and looking for investment possibilities to set up a manufacturing facility for commercial vehicles in Thailand due to its high import duty when compared [with] those for agricultural vehicles,” he said.
Brinn said that in addition to the regional headquarters for Southeast Asia in Bangkok, the company had two operational hubs in Asia. A South Korean operation serves its Iveco vehicles business and an Indonesian base handles sales of parts and service.
Emre Karazli, CNH Industrial’s business director for agriculture in Southeast Asia, Pakistan and Japan, said the Bangkok operation would take over full distribution of the company’s agricultural equipment across Thailand.
He said the company’s major agricultural-equipment brand, New Holland Agriculture, first entered the Thai market in 1952 through a local distributor, moving to a distribution agreement with Asia Pacific Agricultural Machinery (Apam) in 2011.
The decision to set up CNH Industrial’s regional operations in Bangkok followed a mutual agreement that ended the distribution agreement with Apam.
Karazli said that about 45 per cent of CNH Industrial’s revenue in the Asia-Pacific region came from its agricultural business. He said New Holland Agriculture was the leader in the high-horsepower tractor market and that it had pioneered biomass collection.
“Thailand remains the biggest market in Southeast Asia for agricultural tractors and New Holland is a leading Western brand in this sector,” he said, adding that the Thai market for agricultural equipment, particularly tractors, was about 40,000 units a year.