SlideShare a Scribd company logo
1 of 6
Download to read offline
Trucking
      industry in
       Thailand:
         no crisis
Solidiance examines the current Thai truck market and growth
                                                perspectives

                                            November 2009
Thailand commercial vehicle market outlook
Trucking Industry in Thailand: resilient to crisis


    Commercial vehicle market in Thailand has shown unexpected resistance to crisis

   The Thailand truck market is relatively modest in terms of
   size; with only 17,620 units sold last year, compared to the                                Market size of commercial trucks, Thailand
   passenger vehicle market with more than 1 million units                 Units                                                                       GDP Growth
   produced and nearly 600,000 units sold in 2008.                      25,000                                                                               6%
   Nevertheless, Thailand is the first market for commercial
                                                                                                                                                             4%
   vehicles in ASEAN, beyond Malaysia and Indonesia.                    20,000
                                                                                                                                                             2%
   Japanese truck manufacturers, who dominate the passenger             15,000
   and commercial vehicle market in Thailand, estimated in                                                                                                   0%
   early 2009 a negative growth of 30% to 40% in the truck              10,000
                                                                                                                                                             -2%
   market. But the situation is not as dramatic as they imagined,
   and mid this year, they have re-forecasted about negative             5,000                                                                               -4%
   5% to 15% growth for the same year.
                                                                            0                                                                                -6%
   Solidiance study shows that in some parts of the country,                        2006        2007     2008    2009F      2010F        2011F     2012F
   truck manufacturers have difficulties to keep up with                                         Fuso     Hino      Isuzu       Others           GDP
   demand of new trucks. For instance, Hino predicted forecast                   Source: DLT Thailand
   according to the Consumer Confidence Index and
   import/export forecast for Thailand. For 2009, Hino
   forecasted negative growth of 30% as compared to 2008
   and ultimately reduced production of trucks by 30% for 2009.
   As of August 2009, Hino already had run out of stock on                       “At the beginning of this year, Hino believed that export
   many models.                                                                  industry which contributes for about 70% of Hino sales
   Sales, which in general have dropped far less than expected                   in Thailand will completely stop expanding. Thus, they
   should rebound in 2010. Many businesses in Thailand have                      decided to decrease their production to 30% of what is
   postponed purchases of new and replacement trucks for the                     normally produced.
   next following years. This is a major force that will push
   sales of trucks to approximately 24,000 by 2012, reaching                     It turned out that a lot of clients here believe that the
   the levels of 2006.
                                                                                 economy will be better by the end of this year, so they
                                                                                 do not stop buying trucks. These cause Hino trucks to
   OEMs in Thailand have underestimated the rebound of                           run out of stock and loose sales opportunities.”
   the Thai commercial vehicle market and are now facing
   difficulties to supply trucks in some parts of the Kingdom                    Hino Dealership Manager in North East Thailand


                                                                    2
Thailand commercial vehicle market outlook
Trucking Industry in Thailand: resilient to crisis


    Duopoly market with 2 Japanese OEM dominating the Thai truck market

   Japanese OEM largely dominate the Thai truck market with
   Isuzu, Hino, Mitsubishi Fuso and Nissan UD heading the                                           Market segmentation by tonnage, 2008
   market position with more than 97% of market share in
   2008. But out of these 4 companies, Isuzu and Hino seem                      Others 3%   Fuso 6%
   to be definite leaders, with 83.8% market share in 2008.                                                      Others 20%               Fuso 10%            Others 14%          Fuso 8%

   LCVs and HCVs are the 2 best selling segments of trucks in
   the Thai market:
   The LCV segment is largely dominated by Isuzu, selling                             LCV                                       MCV                                         HCV
   constantly on average 70% of the 2-4 ton trucks segment in
   the domestic market. Hino comes second selling constantly
                                                                                                                                                Isuzu 31%                           Isuzu 40%
   on average about 60% of the 4-5 ton trucks.                       Hino 41%
                                                                                                 Isuzu 50%
                                                                                                                                                             Hino 38%
                                                                                                                     Hino 39%
   In the MCV segment, Hino has slightly better sales than
   Isuzu. Dealers and end users’ perception of Hino trucks is              LCV (2 – 10 tons)                         MCV (11 – 20 tons)                    HCV (21 tons and above)
   very good, making this brand the best in this segment and             Source: TAI, Solidiance analysis 2009
   offering a wide range of durable and reliable trucks.
   In the HCV segment, Hino and Isuzu also dominate the                                      Ranking of criteria when purchasing imported trucks
   market with an almost equal market share of 40% for Isuzu
   and 38% for Hino.                                                                         1                   2                    3                4                5

   Imported trucks have been slowly gaining presence in
                                                                                     Technology                                           3.8
   Thailand within the MCV and HCV segments. European
   brands like Volvo and Scania are increasing their market
   presence, but it remains small (less than 2% of the market).
   European trucks have a high end image, and are deemed as                          Reliability                                      3.7
   more reliable than Japanese trucks. Their price range is very
   high (tariffs on imported trucks are 40%, taxes are 200%)
   which will continue to limit their sales volumes. European                        Product quality                            3.3
   trucks are used in specific industries in Thailand, for
   transportation of oil and gas products, for instance.
   Chinese brands like Golden Dragon and DFM, are trying to                          Country of origin                                               4.3
   gain presence in Thailand, but their market share is still very
   low. Thai trucks dealers do not believe, for a large majority,                    Price
   in the potential of these trucks which are deemed to be very                                                                           3.8
   far from Japanese trucks in terms of reliability and quality.                     Source: Solidiance analysis 2009    Sample: 50
                                                                     3
Thailand commercial vehicle market outlook
Trucking Industry in Thailand: resilient to crisis


    In 2008 & 2009, the largest buyers of trucks are logistics, government and
    construction companies                    40%
   Solidiance study shows that the transportation industry is the           35%
   largest purchaser of trucks in Thailand in 2008 and 2009.                30%                       Usage of trucks per industry, 2008
   This sector reached a market value of USD 5.8 billion in                 25%
   2008. The largest players are DHL, FedEx and UPS with a                  20%
   total share of more than 80% of the whole market.                                   35%
                                                                            15%
   The government represents the second largest purchaser of                10%
   trucks although purchases are made randomly. The Thai                     5%
                                                                                                    14%           13%              12%          12%          11%
   government purchases trucks types such as garbage trucks                                                                                                           3%
                                                                             0%
   or street sweeper trucks.
   Construction companies are also an important segment of
   trucks users, but the difficulty with this sector is that in 2009,
   investments are forecasted to halve.
                                                                            Source: Hino, Fuso, Solidiance analysis 2009



    Fuel efficiency as the first criteria when purchasing trucks
   Study shows that end-users have generally very good                                              Key factors when purchasing a truck
   knowledge regarding trucks. Additionally, most buyers have                      st
                                                                                  1 Choice
   already solid preferences for specific brands and know about
   performance levels of the trucks they are willing to buy.
                                                                                               Fuel efficiency                           Price        Volume Cap.
   Unexpectedly, price was not the first factor quoted when                                         48%                                  17%              11%
   purchasing trucks.
   Fuel efficiency comes as the first criteria of purchase                          nd
   because it constitutes a large percentage of end-user’s                         2 Choice
   operating cost: fuel can represent up to 60% of operating
                                                                                                   Price                      Fuel Efficiency         Customization
   costs.                                                                                          33%                             21%                    12%
   Availability of spare parts comes as a third criteria of
   purchase because it is an important element to ensure                           nd
                                                                                  3 Choice
   business continuity. The two market leaders have 44 and 60
   3S dealerships respectively. It is a key criteria for a large                           Spare parts                     Price                Aftersales
   part of end-users who are particularly concerned with spare                                28%                          20%                     21%
   parts availability.                                                                                                                                  Sample: 50
                                                                               Source: Solidiance analysis 2009
                                                                        4
Thailand commercial vehicle market outlook
Trucking Industry in Thailand: resilient to crisis


    The challenges at stake in the Thai trucking industry in the forthcoming years

   Regulation challenges:                                                   Environment policies and new technologies for trucks:
   Asean member states plan to move another step forward in                 If we exclude Japan, Thailand is at the forefront of
   the liberalization of their trade policies by completely                 environmental policies in Asia in the truck industry,
   eliminating tariffs by 2015. Experts believe that one of the             having changed gas emission standard this summer
   main consequences of this liberalization would be a                      from Euro 2 to Euro 3, a more stringent regulation for
   modification of the power struggle between truck makers                  emissions.
   and dealerships, which means that the leverage which is now
                                                                            However, there is no clear sign that this will impact the
   on the side of manufacturers will switch to truck dealers.
                                                                            type of motorization in the next years. Experts, truck
   As the elimination of tariffs will lead to many more foreign             dealers and end-users interviewed in this study are
   brands imported to Thailand, it will increase competition                doubtful about the NGV trucks imposing their standard
   between manufacturers. Dealers will beneficiate from this                on the Thai market because genuine NG trucks are
   competition and could impose the end of exclusive                        considered too expensive. The consequence is that end-
   dealerships. It would allow them to share brands, services               users are customizing their own trucks to make them
   and parts and to offer to their clients a much wider portfolio           run with gas. This results in poor efficiency and
   of vehicles than now.                                                    increased number of breakdowns which does not give
                                                                            NGV systems a good image. Biodiesel could be an
   Fostering the      added    value    creation     in   the   truck
                                                                            alternative, but industry experts doubt that this can be
   manufacturing
                                                                            widely used as a substitute at the present moment nor
   Thai authorities are currently trying to convince Japanese               in the near future.
   manufacturers to produce more vehicles locally, and to
   transfer more technology and production know-how to
   Thailand. One of the best illustration of this phenomenon is
   the production and design of high value parts which has                  “The price for genuine NGV trucks with
   already switched from Japan to Thailand for the pick ups                 appropriate engine is THB 700,000 more than a
   cars. This trend is growing with other high value models,                classical truck running with gasoline. This is why
   such as the Toyota Camry Hybrid, which is now produced in                there is a lot of customization made by truck end-
   Thailand.                                                                users when buying NGV systems. They adapt it
   Thai authorities are pushing towards the same trend for the              themselves to their trucks which are running with
   truck industry. It has already started with Hino trucks now              the same engine as classical trucks working with
   producing more of their high value parts in Thailand, in                 gasoline”.
   partnership with Toyota. Experts predict this trend will
   continue for the years to come, consolidating the lead of                Owner of a Thai logistics company, running
   Thailand in the region.                                                  600 trucks based in Greater Bangkok

                                                                        5
Thailand commercial vehicle market outlook
         Trucking Industry in Thailand: very resilient to crisis

             Solidiance is a marketing and innovation strategy consulting firm with focus on growth in Asia Pacific. The company works closely with Automotive clients to
             outpace the competition, close gaps in growth and capitalize on market opportunities. With offices in Singapore, India, Thailand and China, Solidiance’s Asia focus
             provides clients with a better understanding of intrinsic Asia issues.
             To subscribe to further white papers and to learn more about Solidiance please visit: www.solidiance.com


        Mark Lee- Principal                                                                        Mickael Feige- Senior Consultant

                                                                                                           Mickael Feige is a Senior Strategy Consultant based in
                 Mark is a Principal based in the Singapore office with more
                                                                                                           Bangkok office with more than five years of consulting
                 than eight years of consulting experience. Mark has a strong
                                                                                                           experience. He has led over 50 national and multi-regional
                 focus on quantitative based projects. Previous roles include
                                                                                                           engagements for Fortune 500 clients across Europe, Japan
                 being regional manager for Synovate Business Consulting in
                                                                                                           and south-east Asia. Prior to joining Solidiance, Mickael was
                 Singapore, handling projects for MNCs across Asia, focused
                                                                                                           managing investments and partnerships projects in Europe
                 predominantly on the automotive industry. Mark managed
                                                                                                           for large Japanese MNCs, especially in the automotive
                 most survey-based projects for MNCs where he advised
                                                                                                           industry. With strong experience in combining numerical and
                 international companies on market entry, customer
                                                                                                           qualitative analytics, Mickael specializes in customizing
                 segmentation prioritization and growth strategies. He also
                                                                                                           advanced market segmentation and size forecasting models
                 has ample experience in qualitative research, having
                                                                                                           to help clients identify and prioritize market opportunities to
                 managed various multi-country projects that required a
                                                                                                           develop growth strategies. Mickael has rich experience
                 combination multiple approaches in order to customize
                                                                                                           across automotive industry throughout Europe and Asia
                 results to meet the clients’ needs. Having worked for five
                                                                                                           Pacific, including in Japan where we worked for one of the
                 years in the M&A team of a Korean Conglomerate in Spain,
                                                                                                           top 3 carmaker. He combines sector and cross-industry best
                 Mark also has vast experience with mergers and acquisitions
                                                                                                           practice, leveraging this knowledge to help clients develop
                 in Europe, Asia and Africa. Mark is fluent in Korean, English
                                                                                                           successful market strategies. He holds a Bachelor in
                 and Spanish. He holds a BS in mechanical engineering, from
                                                                                                           marketing (with Honors) from the London Metropolitan
                 the Worcester Polytechnic Institute (United States) and a
                                                                                                           University and a MBA from the Institute of Political Science of
                 MBA from the University of Rochester.
                                                                                                           Lyon (France).



India                                        Thailand                                         Singapore                                        China

    Suite 10-08                                    Suite 32-05, Interchange                        Suite 17-01                                       Suite 801
    A-9, Third Avenue                              399 Sukhumvit Road,                             High Street Center                                Hong Kong Plaza
    Bandh Road,                                    Klongtoey, Wattana,                             1 North Bridge Road                               283 Huaihai Road Central
    New Delhi                                      Bangkok 10110                                   Singapore 179094                                  Shanghai 200021
    Tel: +91 99999 88859                           T. +66 2 660 3638                               Tel: +65 6408 8208                                Tel: +86 21 5168 8905



                                                                                 www.solidiance.com

                                                                             industrial@solidiance.com

More Related Content

More from Solidiance

Iran's Revival : What Will Your Strategy Be?
Iran's Revival : What Will Your Strategy Be?Iran's Revival : What Will Your Strategy Be?
Iran's Revival : What Will Your Strategy Be?Solidiance
 
Role of In Vitro Diagnostics in Saudi Arabia
Role of In Vitro Diagnostics in Saudi ArabiaRole of In Vitro Diagnostics in Saudi Arabia
Role of In Vitro Diagnostics in Saudi ArabiaSolidiance
 
Emerging Opportunities in Myanmar's Diagnostic Imaging and In-Vitro Diagnostics
Emerging Opportunities in Myanmar's Diagnostic Imaging and In-Vitro DiagnosticsEmerging Opportunities in Myanmar's Diagnostic Imaging and In-Vitro Diagnostics
Emerging Opportunities in Myanmar's Diagnostic Imaging and In-Vitro DiagnosticsSolidiance
 
Indonesia's Green Industrial Estates and Best Practices
Indonesia's Green Industrial Estates and Best PracticesIndonesia's Green Industrial Estates and Best Practices
Indonesia's Green Industrial Estates and Best PracticesSolidiance
 
Malaysia's Automation Sector: Pursuit of Opportunities and Shift of Industria...
Malaysia's Automation Sector: Pursuit of Opportunities and Shift of Industria...Malaysia's Automation Sector: Pursuit of Opportunities and Shift of Industria...
Malaysia's Automation Sector: Pursuit of Opportunities and Shift of Industria...Solidiance
 
The New Chemical Era in China
The New Chemical Era in ChinaThe New Chemical Era in China
The New Chemical Era in ChinaSolidiance
 
Myanmar, the Next Manufacturing Hub (focused on Special Economic Zones)
Myanmar, the Next Manufacturing Hub (focused on Special Economic Zones)Myanmar, the Next Manufacturing Hub (focused on Special Economic Zones)
Myanmar, the Next Manufacturing Hub (focused on Special Economic Zones)Solidiance
 
Myanmar Market Entry Support for Japanese companies | ミヤンマー市場機会: 日系企業の参入に向けた分...
Myanmar Market Entry Support for Japanese companies | ミヤンマー市場機会: 日系企業の参入に向けた分...Myanmar Market Entry Support for Japanese companies | ミヤンマー市場機会: 日系企業の参入に向けた分...
Myanmar Market Entry Support for Japanese companies | ミヤンマー市場機会: 日系企業の参入に向けた分...Solidiance
 
The market for Green Buildings in Vietnam | www.solidiance.com |
The market for Green Buildings in Vietnam | www.solidiance.com  |The market for Green Buildings in Vietnam | www.solidiance.com  |
The market for Green Buildings in Vietnam | www.solidiance.com |Solidiance
 
The China market for renewable energy: boom or bust ? | www.solidiance.com
The China market for renewable energy: boom or bust ? | www.solidiance.comThe China market for renewable energy: boom or bust ? | www.solidiance.com
The China market for renewable energy: boom or bust ? | www.solidiance.comSolidiance
 
4G Business Readiness: LTE Opportunities and Challenges in Asia | www.solidi...
4G Business Readiness: LTE Opportunities and Challenges in Asia |  www.solidi...4G Business Readiness: LTE Opportunities and Challenges in Asia |  www.solidi...
4G Business Readiness: LTE Opportunities and Challenges in Asia | www.solidi...Solidiance
 
Myanmar Market Entry: Time to invest or investigate ? www.solidiance.com
Myanmar Market Entry: Time to invest or investigate ?  www.solidiance.comMyanmar Market Entry: Time to invest or investigate ?  www.solidiance.com
Myanmar Market Entry: Time to invest or investigate ? www.solidiance.comSolidiance
 
China's Manufacturing Sector - the End of a Great Growth Era? www.solidiance.com
China's Manufacturing Sector - the End of a Great Growth Era? www.solidiance.comChina's Manufacturing Sector - the End of a Great Growth Era? www.solidiance.com
China's Manufacturing Sector - the End of a Great Growth Era? www.solidiance.comSolidiance
 
Japanese Green Building Construction Materials in Singapore - Do they stand a...
Japanese Green Building Construction Materials in Singapore - Do they stand a...Japanese Green Building Construction Materials in Singapore - Do they stand a...
Japanese Green Building Construction Materials in Singapore - Do they stand a...Solidiance
 
The Electrical Vehicle Market in China - The next wave ? www.solidiance.com
The Electrical Vehicle Market in China - The next wave ? www.solidiance.com The Electrical Vehicle Market in China - The next wave ? www.solidiance.com
The Electrical Vehicle Market in China - The next wave ? www.solidiance.com Solidiance
 
Top 10 Asia Green Cities - Asian Green City Index - www.solidiance.com
Top 10 Asia Green Cities -  Asian Green City Index - www.solidiance.com Top 10 Asia Green Cities -  Asian Green City Index - www.solidiance.com
Top 10 Asia Green Cities - Asian Green City Index - www.solidiance.com Solidiance
 
Asia Preventive Healthcare - www.solidiance.com
Asia Preventive Healthcare - www.solidiance.comAsia Preventive Healthcare - www.solidiance.com
Asia Preventive Healthcare - www.solidiance.comSolidiance
 
Asia Mobile Telecom Innovations Solidiance MMA
Asia Mobile Telecom Innovations  Solidiance  MMAAsia Mobile Telecom Innovations  Solidiance  MMA
Asia Mobile Telecom Innovations Solidiance MMASolidiance
 
How global warming will affect your Asia business - www.solidiance.com
How global warming will affect your Asia business - www.solidiance.comHow global warming will affect your Asia business - www.solidiance.com
How global warming will affect your Asia business - www.solidiance.comSolidiance
 
China Software Outsourcing Industry - www.solidiance.com
China Software Outsourcing Industry -  www.solidiance.comChina Software Outsourcing Industry -  www.solidiance.com
China Software Outsourcing Industry - www.solidiance.comSolidiance
 

More from Solidiance (20)

Iran's Revival : What Will Your Strategy Be?
Iran's Revival : What Will Your Strategy Be?Iran's Revival : What Will Your Strategy Be?
Iran's Revival : What Will Your Strategy Be?
 
Role of In Vitro Diagnostics in Saudi Arabia
Role of In Vitro Diagnostics in Saudi ArabiaRole of In Vitro Diagnostics in Saudi Arabia
Role of In Vitro Diagnostics in Saudi Arabia
 
Emerging Opportunities in Myanmar's Diagnostic Imaging and In-Vitro Diagnostics
Emerging Opportunities in Myanmar's Diagnostic Imaging and In-Vitro DiagnosticsEmerging Opportunities in Myanmar's Diagnostic Imaging and In-Vitro Diagnostics
Emerging Opportunities in Myanmar's Diagnostic Imaging and In-Vitro Diagnostics
 
Indonesia's Green Industrial Estates and Best Practices
Indonesia's Green Industrial Estates and Best PracticesIndonesia's Green Industrial Estates and Best Practices
Indonesia's Green Industrial Estates and Best Practices
 
Malaysia's Automation Sector: Pursuit of Opportunities and Shift of Industria...
Malaysia's Automation Sector: Pursuit of Opportunities and Shift of Industria...Malaysia's Automation Sector: Pursuit of Opportunities and Shift of Industria...
Malaysia's Automation Sector: Pursuit of Opportunities and Shift of Industria...
 
The New Chemical Era in China
The New Chemical Era in ChinaThe New Chemical Era in China
The New Chemical Era in China
 
Myanmar, the Next Manufacturing Hub (focused on Special Economic Zones)
Myanmar, the Next Manufacturing Hub (focused on Special Economic Zones)Myanmar, the Next Manufacturing Hub (focused on Special Economic Zones)
Myanmar, the Next Manufacturing Hub (focused on Special Economic Zones)
 
Myanmar Market Entry Support for Japanese companies | ミヤンマー市場機会: 日系企業の参入に向けた分...
Myanmar Market Entry Support for Japanese companies | ミヤンマー市場機会: 日系企業の参入に向けた分...Myanmar Market Entry Support for Japanese companies | ミヤンマー市場機会: 日系企業の参入に向けた分...
Myanmar Market Entry Support for Japanese companies | ミヤンマー市場機会: 日系企業の参入に向けた分...
 
The market for Green Buildings in Vietnam | www.solidiance.com |
The market for Green Buildings in Vietnam | www.solidiance.com  |The market for Green Buildings in Vietnam | www.solidiance.com  |
The market for Green Buildings in Vietnam | www.solidiance.com |
 
The China market for renewable energy: boom or bust ? | www.solidiance.com
The China market for renewable energy: boom or bust ? | www.solidiance.comThe China market for renewable energy: boom or bust ? | www.solidiance.com
The China market for renewable energy: boom or bust ? | www.solidiance.com
 
4G Business Readiness: LTE Opportunities and Challenges in Asia | www.solidi...
4G Business Readiness: LTE Opportunities and Challenges in Asia |  www.solidi...4G Business Readiness: LTE Opportunities and Challenges in Asia |  www.solidi...
4G Business Readiness: LTE Opportunities and Challenges in Asia | www.solidi...
 
Myanmar Market Entry: Time to invest or investigate ? www.solidiance.com
Myanmar Market Entry: Time to invest or investigate ?  www.solidiance.comMyanmar Market Entry: Time to invest or investigate ?  www.solidiance.com
Myanmar Market Entry: Time to invest or investigate ? www.solidiance.com
 
China's Manufacturing Sector - the End of a Great Growth Era? www.solidiance.com
China's Manufacturing Sector - the End of a Great Growth Era? www.solidiance.comChina's Manufacturing Sector - the End of a Great Growth Era? www.solidiance.com
China's Manufacturing Sector - the End of a Great Growth Era? www.solidiance.com
 
Japanese Green Building Construction Materials in Singapore - Do they stand a...
Japanese Green Building Construction Materials in Singapore - Do they stand a...Japanese Green Building Construction Materials in Singapore - Do they stand a...
Japanese Green Building Construction Materials in Singapore - Do they stand a...
 
The Electrical Vehicle Market in China - The next wave ? www.solidiance.com
The Electrical Vehicle Market in China - The next wave ? www.solidiance.com The Electrical Vehicle Market in China - The next wave ? www.solidiance.com
The Electrical Vehicle Market in China - The next wave ? www.solidiance.com
 
Top 10 Asia Green Cities - Asian Green City Index - www.solidiance.com
Top 10 Asia Green Cities -  Asian Green City Index - www.solidiance.com Top 10 Asia Green Cities -  Asian Green City Index - www.solidiance.com
Top 10 Asia Green Cities - Asian Green City Index - www.solidiance.com
 
Asia Preventive Healthcare - www.solidiance.com
Asia Preventive Healthcare - www.solidiance.comAsia Preventive Healthcare - www.solidiance.com
Asia Preventive Healthcare - www.solidiance.com
 
Asia Mobile Telecom Innovations Solidiance MMA
Asia Mobile Telecom Innovations  Solidiance  MMAAsia Mobile Telecom Innovations  Solidiance  MMA
Asia Mobile Telecom Innovations Solidiance MMA
 
How global warming will affect your Asia business - www.solidiance.com
How global warming will affect your Asia business - www.solidiance.comHow global warming will affect your Asia business - www.solidiance.com
How global warming will affect your Asia business - www.solidiance.com
 
China Software Outsourcing Industry - www.solidiance.com
China Software Outsourcing Industry -  www.solidiance.comChina Software Outsourcing Industry -  www.solidiance.com
China Software Outsourcing Industry - www.solidiance.com
 

Recently uploaded

MSA Website Sldccdddddddddddddddfgew rgawrgkhrawg
MSA Website Sldccdddddddddddddddfgew rgawrgkhrawgMSA Website Sldccdddddddddddddddfgew rgawrgkhrawg
MSA Website Sldccdddddddddddddddfgew rgawrgkhrawgmsaucla
 
Trustworthy Solutions for Volvo Exhaust Repair and Performance Enhancement
Trustworthy Solutions for Volvo Exhaust Repair and Performance EnhancementTrustworthy Solutions for Volvo Exhaust Repair and Performance Enhancement
Trustworthy Solutions for Volvo Exhaust Repair and Performance EnhancementA&M Auto Service
 
EV Adoption For Taxi/Rideshare Drivers by Jarvis Murray
EV Adoption For Taxi/Rideshare Drivers by Jarvis MurrayEV Adoption For Taxi/Rideshare Drivers by Jarvis Murray
EV Adoption For Taxi/Rideshare Drivers by Jarvis MurrayForth
 
APACHE RTR200 4V ABS PARTS CATALOGUE.pdf
APACHE RTR200 4V ABS PARTS CATALOGUE.pdfAPACHE RTR200 4V ABS PARTS CATALOGUE.pdf
APACHE RTR200 4V ABS PARTS CATALOGUE.pdfyashwanthsh1
 
Commercial Movers Near Me Best Commercial Moving Company.pptx
Commercial Movers Near Me  Best Commercial Moving Company.pptxCommercial Movers Near Me  Best Commercial Moving Company.pptx
Commercial Movers Near Me Best Commercial Moving Company.pptxThree Movers
 
Leading Garage In Canoga Park To Address BMW PCV Valve Failure
Leading Garage In Canoga Park To Address BMW PCV Valve FailureLeading Garage In Canoga Park To Address BMW PCV Valve Failure
Leading Garage In Canoga Park To Address BMW PCV Valve FailureEuro Plus Automotive
 
Suspension Mastery Unleashing Peak Performance for Your BMW in Dallas, TX
Suspension Mastery Unleashing Peak Performance for Your BMW in Dallas, TXSuspension Mastery Unleashing Peak Performance for Your BMW in Dallas, TX
Suspension Mastery Unleashing Peak Performance for Your BMW in Dallas, TXLouden Motorcar Services Inc
 
My CV/Resume (Updated on March 13, 2024)
My CV/Resume (Updated on March 13, 2024)My CV/Resume (Updated on March 13, 2024)
My CV/Resume (Updated on March 13, 2024)AaronSanchez54
 
Portland Electric Ways to Work by Amy Corbett
Portland Electric Ways to Work by Amy CorbettPortland Electric Ways to Work by Amy Corbett
Portland Electric Ways to Work by Amy CorbettForth
 
Accelerating EV Adoption for Gig Drivers by Ian Sergeant
Accelerating EV Adoption for Gig Drivers by Ian SergeantAccelerating EV Adoption for Gig Drivers by Ian Sergeant
Accelerating EV Adoption for Gig Drivers by Ian SergeantForth
 
Timeless Elegance Restored Classic Car Restoration Excellence in Boca Raton, FL
Timeless Elegance Restored Classic Car Restoration Excellence in Boca Raton, FLTimeless Elegance Restored Classic Car Restoration Excellence in Boca Raton, FL
Timeless Elegance Restored Classic Car Restoration Excellence in Boca Raton, FLWorld Class Auto - Classic Car Restoration
 
Change Management Systm Presentation.pdf
Change Management Systm Presentation.pdfChange Management Systm Presentation.pdf
Change Management Systm Presentation.pdfssuser6ef45a
 

Recently uploaded (12)

MSA Website Sldccdddddddddddddddfgew rgawrgkhrawg
MSA Website Sldccdddddddddddddddfgew rgawrgkhrawgMSA Website Sldccdddddddddddddddfgew rgawrgkhrawg
MSA Website Sldccdddddddddddddddfgew rgawrgkhrawg
 
Trustworthy Solutions for Volvo Exhaust Repair and Performance Enhancement
Trustworthy Solutions for Volvo Exhaust Repair and Performance EnhancementTrustworthy Solutions for Volvo Exhaust Repair and Performance Enhancement
Trustworthy Solutions for Volvo Exhaust Repair and Performance Enhancement
 
EV Adoption For Taxi/Rideshare Drivers by Jarvis Murray
EV Adoption For Taxi/Rideshare Drivers by Jarvis MurrayEV Adoption For Taxi/Rideshare Drivers by Jarvis Murray
EV Adoption For Taxi/Rideshare Drivers by Jarvis Murray
 
APACHE RTR200 4V ABS PARTS CATALOGUE.pdf
APACHE RTR200 4V ABS PARTS CATALOGUE.pdfAPACHE RTR200 4V ABS PARTS CATALOGUE.pdf
APACHE RTR200 4V ABS PARTS CATALOGUE.pdf
 
Commercial Movers Near Me Best Commercial Moving Company.pptx
Commercial Movers Near Me  Best Commercial Moving Company.pptxCommercial Movers Near Me  Best Commercial Moving Company.pptx
Commercial Movers Near Me Best Commercial Moving Company.pptx
 
Leading Garage In Canoga Park To Address BMW PCV Valve Failure
Leading Garage In Canoga Park To Address BMW PCV Valve FailureLeading Garage In Canoga Park To Address BMW PCV Valve Failure
Leading Garage In Canoga Park To Address BMW PCV Valve Failure
 
Suspension Mastery Unleashing Peak Performance for Your BMW in Dallas, TX
Suspension Mastery Unleashing Peak Performance for Your BMW in Dallas, TXSuspension Mastery Unleashing Peak Performance for Your BMW in Dallas, TX
Suspension Mastery Unleashing Peak Performance for Your BMW in Dallas, TX
 
My CV/Resume (Updated on March 13, 2024)
My CV/Resume (Updated on March 13, 2024)My CV/Resume (Updated on March 13, 2024)
My CV/Resume (Updated on March 13, 2024)
 
Portland Electric Ways to Work by Amy Corbett
Portland Electric Ways to Work by Amy CorbettPortland Electric Ways to Work by Amy Corbett
Portland Electric Ways to Work by Amy Corbett
 
Accelerating EV Adoption for Gig Drivers by Ian Sergeant
Accelerating EV Adoption for Gig Drivers by Ian SergeantAccelerating EV Adoption for Gig Drivers by Ian Sergeant
Accelerating EV Adoption for Gig Drivers by Ian Sergeant
 
Timeless Elegance Restored Classic Car Restoration Excellence in Boca Raton, FL
Timeless Elegance Restored Classic Car Restoration Excellence in Boca Raton, FLTimeless Elegance Restored Classic Car Restoration Excellence in Boca Raton, FL
Timeless Elegance Restored Classic Car Restoration Excellence in Boca Raton, FL
 
Change Management Systm Presentation.pdf
Change Management Systm Presentation.pdfChange Management Systm Presentation.pdf
Change Management Systm Presentation.pdf
 

Thailand Trucking Market 2009 www.solidiance.com

  • 1. Trucking industry in Thailand: no crisis Solidiance examines the current Thai truck market and growth perspectives November 2009
  • 2. Thailand commercial vehicle market outlook Trucking Industry in Thailand: resilient to crisis Commercial vehicle market in Thailand has shown unexpected resistance to crisis The Thailand truck market is relatively modest in terms of size; with only 17,620 units sold last year, compared to the Market size of commercial trucks, Thailand passenger vehicle market with more than 1 million units Units GDP Growth produced and nearly 600,000 units sold in 2008. 25,000 6% Nevertheless, Thailand is the first market for commercial 4% vehicles in ASEAN, beyond Malaysia and Indonesia. 20,000 2% Japanese truck manufacturers, who dominate the passenger 15,000 and commercial vehicle market in Thailand, estimated in 0% early 2009 a negative growth of 30% to 40% in the truck 10,000 -2% market. But the situation is not as dramatic as they imagined, and mid this year, they have re-forecasted about negative 5,000 -4% 5% to 15% growth for the same year. 0 -6% Solidiance study shows that in some parts of the country, 2006 2007 2008 2009F 2010F 2011F 2012F truck manufacturers have difficulties to keep up with Fuso Hino Isuzu Others GDP demand of new trucks. For instance, Hino predicted forecast Source: DLT Thailand according to the Consumer Confidence Index and import/export forecast for Thailand. For 2009, Hino forecasted negative growth of 30% as compared to 2008 and ultimately reduced production of trucks by 30% for 2009. As of August 2009, Hino already had run out of stock on “At the beginning of this year, Hino believed that export many models. industry which contributes for about 70% of Hino sales Sales, which in general have dropped far less than expected in Thailand will completely stop expanding. Thus, they should rebound in 2010. Many businesses in Thailand have decided to decrease their production to 30% of what is postponed purchases of new and replacement trucks for the normally produced. next following years. This is a major force that will push sales of trucks to approximately 24,000 by 2012, reaching It turned out that a lot of clients here believe that the the levels of 2006. economy will be better by the end of this year, so they do not stop buying trucks. These cause Hino trucks to OEMs in Thailand have underestimated the rebound of run out of stock and loose sales opportunities.” the Thai commercial vehicle market and are now facing difficulties to supply trucks in some parts of the Kingdom Hino Dealership Manager in North East Thailand 2
  • 3. Thailand commercial vehicle market outlook Trucking Industry in Thailand: resilient to crisis Duopoly market with 2 Japanese OEM dominating the Thai truck market Japanese OEM largely dominate the Thai truck market with Isuzu, Hino, Mitsubishi Fuso and Nissan UD heading the Market segmentation by tonnage, 2008 market position with more than 97% of market share in 2008. But out of these 4 companies, Isuzu and Hino seem Others 3% Fuso 6% to be definite leaders, with 83.8% market share in 2008. Others 20% Fuso 10% Others 14% Fuso 8% LCVs and HCVs are the 2 best selling segments of trucks in the Thai market: The LCV segment is largely dominated by Isuzu, selling LCV MCV HCV constantly on average 70% of the 2-4 ton trucks segment in the domestic market. Hino comes second selling constantly Isuzu 31% Isuzu 40% on average about 60% of the 4-5 ton trucks. Hino 41% Isuzu 50% Hino 38% Hino 39% In the MCV segment, Hino has slightly better sales than Isuzu. Dealers and end users’ perception of Hino trucks is LCV (2 – 10 tons) MCV (11 – 20 tons) HCV (21 tons and above) very good, making this brand the best in this segment and Source: TAI, Solidiance analysis 2009 offering a wide range of durable and reliable trucks. In the HCV segment, Hino and Isuzu also dominate the Ranking of criteria when purchasing imported trucks market with an almost equal market share of 40% for Isuzu and 38% for Hino. 1 2 3 4 5 Imported trucks have been slowly gaining presence in Technology 3.8 Thailand within the MCV and HCV segments. European brands like Volvo and Scania are increasing their market presence, but it remains small (less than 2% of the market). European trucks have a high end image, and are deemed as Reliability 3.7 more reliable than Japanese trucks. Their price range is very high (tariffs on imported trucks are 40%, taxes are 200%) which will continue to limit their sales volumes. European Product quality 3.3 trucks are used in specific industries in Thailand, for transportation of oil and gas products, for instance. Chinese brands like Golden Dragon and DFM, are trying to Country of origin 4.3 gain presence in Thailand, but their market share is still very low. Thai trucks dealers do not believe, for a large majority, Price in the potential of these trucks which are deemed to be very 3.8 far from Japanese trucks in terms of reliability and quality. Source: Solidiance analysis 2009 Sample: 50 3
  • 4. Thailand commercial vehicle market outlook Trucking Industry in Thailand: resilient to crisis In 2008 & 2009, the largest buyers of trucks are logistics, government and construction companies 40% Solidiance study shows that the transportation industry is the 35% largest purchaser of trucks in Thailand in 2008 and 2009. 30% Usage of trucks per industry, 2008 This sector reached a market value of USD 5.8 billion in 25% 2008. The largest players are DHL, FedEx and UPS with a 20% total share of more than 80% of the whole market. 35% 15% The government represents the second largest purchaser of 10% trucks although purchases are made randomly. The Thai 5% 14% 13% 12% 12% 11% government purchases trucks types such as garbage trucks 3% 0% or street sweeper trucks. Construction companies are also an important segment of trucks users, but the difficulty with this sector is that in 2009, investments are forecasted to halve. Source: Hino, Fuso, Solidiance analysis 2009 Fuel efficiency as the first criteria when purchasing trucks Study shows that end-users have generally very good Key factors when purchasing a truck knowledge regarding trucks. Additionally, most buyers have st 1 Choice already solid preferences for specific brands and know about performance levels of the trucks they are willing to buy. Fuel efficiency Price Volume Cap. Unexpectedly, price was not the first factor quoted when 48% 17% 11% purchasing trucks. Fuel efficiency comes as the first criteria of purchase nd because it constitutes a large percentage of end-user’s 2 Choice operating cost: fuel can represent up to 60% of operating Price Fuel Efficiency Customization costs. 33% 21% 12% Availability of spare parts comes as a third criteria of purchase because it is an important element to ensure nd 3 Choice business continuity. The two market leaders have 44 and 60 3S dealerships respectively. It is a key criteria for a large Spare parts Price Aftersales part of end-users who are particularly concerned with spare 28% 20% 21% parts availability. Sample: 50 Source: Solidiance analysis 2009 4
  • 5. Thailand commercial vehicle market outlook Trucking Industry in Thailand: resilient to crisis The challenges at stake in the Thai trucking industry in the forthcoming years Regulation challenges: Environment policies and new technologies for trucks: Asean member states plan to move another step forward in If we exclude Japan, Thailand is at the forefront of the liberalization of their trade policies by completely environmental policies in Asia in the truck industry, eliminating tariffs by 2015. Experts believe that one of the having changed gas emission standard this summer main consequences of this liberalization would be a from Euro 2 to Euro 3, a more stringent regulation for modification of the power struggle between truck makers emissions. and dealerships, which means that the leverage which is now However, there is no clear sign that this will impact the on the side of manufacturers will switch to truck dealers. type of motorization in the next years. Experts, truck As the elimination of tariffs will lead to many more foreign dealers and end-users interviewed in this study are brands imported to Thailand, it will increase competition doubtful about the NGV trucks imposing their standard between manufacturers. Dealers will beneficiate from this on the Thai market because genuine NG trucks are competition and could impose the end of exclusive considered too expensive. The consequence is that end- dealerships. It would allow them to share brands, services users are customizing their own trucks to make them and parts and to offer to their clients a much wider portfolio run with gas. This results in poor efficiency and of vehicles than now. increased number of breakdowns which does not give NGV systems a good image. Biodiesel could be an Fostering the added value creation in the truck alternative, but industry experts doubt that this can be manufacturing widely used as a substitute at the present moment nor Thai authorities are currently trying to convince Japanese in the near future. manufacturers to produce more vehicles locally, and to transfer more technology and production know-how to Thailand. One of the best illustration of this phenomenon is the production and design of high value parts which has “The price for genuine NGV trucks with already switched from Japan to Thailand for the pick ups appropriate engine is THB 700,000 more than a cars. This trend is growing with other high value models, classical truck running with gasoline. This is why such as the Toyota Camry Hybrid, which is now produced in there is a lot of customization made by truck end- Thailand. users when buying NGV systems. They adapt it Thai authorities are pushing towards the same trend for the themselves to their trucks which are running with truck industry. It has already started with Hino trucks now the same engine as classical trucks working with producing more of their high value parts in Thailand, in gasoline”. partnership with Toyota. Experts predict this trend will continue for the years to come, consolidating the lead of Owner of a Thai logistics company, running Thailand in the region. 600 trucks based in Greater Bangkok 5
  • 6. Thailand commercial vehicle market outlook Trucking Industry in Thailand: very resilient to crisis Solidiance is a marketing and innovation strategy consulting firm with focus on growth in Asia Pacific. The company works closely with Automotive clients to outpace the competition, close gaps in growth and capitalize on market opportunities. With offices in Singapore, India, Thailand and China, Solidiance’s Asia focus provides clients with a better understanding of intrinsic Asia issues. To subscribe to further white papers and to learn more about Solidiance please visit: www.solidiance.com Mark Lee- Principal Mickael Feige- Senior Consultant Mickael Feige is a Senior Strategy Consultant based in Mark is a Principal based in the Singapore office with more Bangkok office with more than five years of consulting than eight years of consulting experience. Mark has a strong experience. He has led over 50 national and multi-regional focus on quantitative based projects. Previous roles include engagements for Fortune 500 clients across Europe, Japan being regional manager for Synovate Business Consulting in and south-east Asia. Prior to joining Solidiance, Mickael was Singapore, handling projects for MNCs across Asia, focused managing investments and partnerships projects in Europe predominantly on the automotive industry. Mark managed for large Japanese MNCs, especially in the automotive most survey-based projects for MNCs where he advised industry. With strong experience in combining numerical and international companies on market entry, customer qualitative analytics, Mickael specializes in customizing segmentation prioritization and growth strategies. He also advanced market segmentation and size forecasting models has ample experience in qualitative research, having to help clients identify and prioritize market opportunities to managed various multi-country projects that required a develop growth strategies. Mickael has rich experience combination multiple approaches in order to customize across automotive industry throughout Europe and Asia results to meet the clients’ needs. Having worked for five Pacific, including in Japan where we worked for one of the years in the M&A team of a Korean Conglomerate in Spain, top 3 carmaker. He combines sector and cross-industry best Mark also has vast experience with mergers and acquisitions practice, leveraging this knowledge to help clients develop in Europe, Asia and Africa. Mark is fluent in Korean, English successful market strategies. He holds a Bachelor in and Spanish. He holds a BS in mechanical engineering, from marketing (with Honors) from the London Metropolitan the Worcester Polytechnic Institute (United States) and a University and a MBA from the Institute of Political Science of MBA from the University of Rochester. Lyon (France). India Thailand Singapore China Suite 10-08 Suite 32-05, Interchange Suite 17-01 Suite 801 A-9, Third Avenue 399 Sukhumvit Road, High Street Center Hong Kong Plaza Bandh Road, Klongtoey, Wattana, 1 North Bridge Road 283 Huaihai Road Central New Delhi Bangkok 10110 Singapore 179094 Shanghai 200021 Tel: +91 99999 88859 T. +66 2 660 3638 Tel: +65 6408 8208 Tel: +86 21 5168 8905 www.solidiance.com industrial@solidiance.com