Thailand on road to 3 million units a year
The 34th Bangkok International Motor Show which was held from March 25th to April 7th 2103, reflected Thailand’s automotive industry’s positive outlook. Having broken the two million units a year mark for the first time, the country’s motor vehicle production rose by nearly 37% (from February 2012 to February 2013) with vehicle shipments up over 22%. Domestic car sales rose by over 42%.
At the show itself exhibitors sold around 40,000 cars. A total of 34 car and nine motorcycle brands participated in the event, along with manufacturers of car accessories and parts. Sixteen new vehicles were launched and 10 prototypes showcased at the event. The organizers of the Bangkok International Motor Show, Grand Prix International, made this year’s theme “Street Fashion”. According to the show organizers, automotive design is based on ergonomic design that helps improve the comfort level of humans. It takes a combination of the fine arts and industrial design and transportation design to create an automobile. Dr Prachin Eamlumnow, President of Grand Prix International, says he was not surprised by the quick recovery of the Thai auto industry after the flooding in the second half of 2012. A Thai auto industry crisis every five to seven years is, he says, “normal”. Past crises have been caused by tax measures, political conflict, natural disaster and foreign currency exchange problems. “Foreign automotive companies that have invested in Thailand, and especially the Japanese automakers, know the resilience of the Thai people very well, and invest in our country without hesitation.
At present many Japanese companies consider Thailand to offer a strategic point for exports to ASEAN countries and the rest of the world,” he says. But, he cautions, there are challenges ahead. The withdrawal of the tax rebate for first-time car buyers is affecting sales. In response, OEMs have introduced “exciting marketing plans and business strategies to boost their sales,” including the launch of new models. Looking ahead, Eamlumnow says the market in 2013 has been affected by the floods, with manufacturers still catching up on back orders. A clearer picture of the trends will emerge in 2014. He is confident that growth will continue as the industry will be supported by the government’s target of reaching sales of three million units by 2017.
This will be guided by a new master plan devised by the Thailand Automotive Institute (TAI), which steered the country towards production capacity of two million eco-cars a year. “For the new master plan we have to include Myanmar. Having reopened the country to foreign investment the economy is growing very fast. We need to see what types of vehicle Thailand can supply to that market. We must analyze it carefully. Another important issue we need to focus in to develop skilled workers to support new production processes that will use automation systems or robots much more on the production line”. The Bangkok International Motor Show – “the pride of our nation” – will have a greater impact on Thailand’s position in the ASEAN auto manufacturing sector over the next three years as the ASEAN Economic Community (AEC) takes shape. “We will host the Organisation Internationale des Constructeurs d’Automobiles (OICA) congress that will be attended by representatives from 40 countries at the 34th Bangkok International Motor Show in March next year. We are ready to raise the level to be recognized as the Motor Show of ASEAN nations, and show why we have been number one in this region for over three decades”.
Automotive Industries (AI) asked Jaturont Komolmis, Senior Vice President and Chief Director, special activities department of Grand Prix International how successful the 2013 show was.
Komolmis: One cannot judge the success by the total sales, which were down. I focus on the development of the market. This was not the year for eco cars. First car-buyer support was also not available this year. But, the market for middle-class and luxury cars grew. The sales of cars priced at more than 700,000 Thai Baht (US$23,000) increased more than 10% this year. All carmakers are happy with the results and their sales.
AI: How do you see the BIMS growing as Thailand continues to increase its presence as a major automotive player in the ASEAN region?
Komolmis: I am proud to say that the BIMS has always been the trend setter. Our theme and concept for each year has been well-thought and I always make sure that we reflect the automotive trend and technologies for the next few years. We never stop developing. This year all carmakers responded to the concept of “The Street of Automotive Fashion”, because they see it as a future as well. Also, our show is known for its world-class standard with the World’s top Motor Show visitors
AI: What are some of the recent investments that have continued to power the Thai auto industry?
Komolmis: The market is getting more and more competitive. No carmaker wants to lose market share, so they want to retain manufacturing volumes while driving sales through marketing strategies that work. The main activities in the Thai auto industry this year focus on the different ways of implementing public relations programs and offering customers greater choice. Apart from the competitive price in the market, carmakers will export more. For example, Isuzu will change the ratio for domestic sales and exports to 50/50 instead of 60/40 from last year. It is very clear that many more investments will come and they will choose Thailand as the government’s 10-year vision is that Thailand will continue to increase its competence in manufacturing cars. We will move Thai auto industry standard to world-class standard, aiming to be bigger and greater while keeping the industry as eco-friendly as possible.