Thailand Auto Parts & Accessories (TAPA 2010) - Advantages of Sourcing from Thailand


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Thailand Auto Parts & Accessories (TAPA 2010) - Advantages of Sourcing from Thailand

  1. 1. Thailand Auto Parts & Accessories (TAPA 2010) ASEAN Auto Parts Sourcing Hub The World’s Trusted Source for Auto Parts & Accessories A Frost & Sullivan Whitepaper Prepared for Department of Export Promotion, Ministry of Commerce, Royal Thai Government © 2009 Frost & Sullivan
  2. 2. 1 TABLE OF CONTENT 1.0 ASEAN at a Glance 2.0 Thailand 2.1 Macro Economic Overview 2.2 Automotive Overview 2.3 Automotive Policies 2.4 Automotive Industry Supply Chain Structure 2.5 Thailand Automotive Cluster 2.6 Profile of Automotive Assemblers & Suppliers 3.0 ASEAN as a Sourcing Hub 4.0 Advantages of Sourcing from Thailand 5.0 Thailand Auto Parts & Accessories (TAPA 2010) Exhibition © 2009 Frost & Sullivan
  3. 3. 2 1.0 ASEAN AT A GLANCE The Association of South East Asian Nations (ASEAN) encompasses 10 South East Asian countries that include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. ASEAN region has a population of around 526 million and a combined GDP of US$1, 271 billion with a growth rate of over 5% per annum. The car parc is in the region of 26 million which indicates a car penetration rate of about 25 per 1,000. This shows a tremendous growth potential for this region in the future. Source: Frost & Sullivan © 2009 Frost & Sullivan
  4. 4. 3 Population (Million) Working Population Below national poverty line Unemployment Literacy rate Indonesia 228 66% 17% 10% 90% Philippines 91 60% 41% 7% 93% Vietnam 84 64% 37% 2% 90% Thailand 63 69% 18% 1% 93% My anmar 47. 74 65% 6% 90% Malaysia 27 63% 2% 4% 89% Cambodia 14.24 59% 36% 2% 74% Laos 6.67 55% 45% 1% 69% Singapore 4.59 72% 0% 4% 100% Brunei 0.38 47% 0% 5% 93% Source: Frost & Sullivan ASEAN countries are economically diverse in terms of population, GDP, poverty, unemployment, literacy rates etc. Population varies from 0.34 million (Brunei) to 228 million in Indonesia. GDP varies from US$8.6 billion (Cambodia) to US$428 billion (Indonesia). Per capita GDP varies from US$1800 (Cambodia) to US$51,000 (Brunei). Laos and Cambodia have a high percentage of its population with income below poverty line at 45% and 36% respectively while Brunei and Singapore have almost 0% of its population with income below the poverty line. Almost all the countries in ASEAN region have high literacy rates. © 2009 Frost & Sullivan
  5. 5. 4 Only 5 ASEAN countries have automotive production capabilities. ASEAN Countries on Growth Curve 400 Brunei Car Penetration Per 1000 350 300 Malayasia 250 200 C1 C3 C2 C4 150 Singapore 100 50 Philippines Thailand Indonesia 0 $3,000 $7,000 $10,000 Cluster 4 : Markets of Tomorrow Cluster 3 : High Growth Vietnam Thailand Laos, Cambodia Per Capita GDP (PPP Basis) Cluster 2 : Steady Growth Cluster 1 : Nearing Stagnation Malaysia Brunei, Singapore Indonesia Myanmar $50,000 Philippines Source: Frost & Sullivan Brunei and Singapore are saturated markets due to higher per capita GDP (> US$50,000) and car parc penetration of over 150 per 1000. Malaysia is on the steady growth curve based on per capita GDP of US$10,000 and car parc penetration of US$10,000-US$50,000. Countries such as Indonesia, Thailand and Philippines have a higher growth potential due to considerable per capita GDP of US$7,000US$10,000 and relatively lower car parc penetration (<50 per 1000). Cambodia, Myanmar, Vietnam, Laos have a bright future in the automotive industry due to increased per capita GDP (US$3,000-US$7,000) over the coming years and very low car parc penetration (<25 per 1000). The combined automotive production ASEAN was over 2.59 million vehicles in 2008 with Thailand being the largest production base in ASEAN. © 2009 Frost & Sullivan
  6. 6. 5 Countrywise Production within ASEAN 1,600 1,400 1,200 1,000 800 600 400 200 0 2 006 2007 Malaysia 2008 Indonesia Thailand Philippinnes 2 0 0 9 (est) Vietnam 2.0 THAILAND 2.1 Macro Economic Overview Thailand is an emerging economy that lies in the heart of Southeast Asia and is considered as a newly industrialized country. Thailand is the 21st most populous country in the world with a population of over 65 million and 67% of its population under the age of 39 years old. Country/Territory 2008 Rank 2009 Rank China 1 1 India 2 2 United States 3 3 Indonesia 4 4 Brazil 5 5 Turkey 17 18 Dem.Rep. Of Combo 18 19 Iran 19 20 Thailand 20 21 France 21 22 © 2009 Frost & Sullivan
  7. 7. 6 Thailand’s economy is the 2nd largest economy in ASEAN, growing at an average of 4%-6% over the past 3-5 years mainly due to increased exports in Thai rice, textiles and footwear, fishery products, rubber, jewelry, automobiles, computers and electrical appliances. According to the latest annual World Bank’s Doing Business report, Thailand ranks 13th among over 180 countries and 4th in East Asia in the ease of doing business in 2009. Economy 2006 Rank 2007 Rank 2008 Rank 2009 Rank Singapore 2 1 1 1 New Zealand 1 2 2 2 United Sates 3 3 3 3 Hong Kong, China 7 4 4 4 Denmark 8 5 5 5 Thailand 20 18 15 13 Malaysia 21 25 24 20 Taiwan, China 35 47 50 61 China 91 93 83 83 Vietnam 99 104 91 92 Source: World Bank Group, 2009 2.2 Automotive Overview Growth Zone Analysis Thailand Vs other countries 900 United States Canada United States France 800 Italy Germany Japan Italy Australia Thailand Japan Germany France 600 Car Parc per 1,000 Australia Malaysia 700 Korea Great Britain Canada Great Britain 500 2002 Brazil 400 2030 Korea 300 Malaysia China 200 Thailand Brazil 100 India India China 0 0 10 20 30 Per Capita Income (PPP Basis) (US$ '000) © 2009 Frost & Sullivan 40 50 60
  8. 8. 7 Currently, the automotive industry is the third largest industry in Thailand with an estimated total workforce of more than 300,000 employees. Motor cars, automotive parts and accessories exports generate the second biggest export revenues for Thailand accounting for over US$15.6 billion in 2008. Thailand is named the “Detroit of Asia” being the second largest producer of 1 ton pick-up trucks and the fifth largest automotive assembler in APAC region with an annual production capacity of around 1.89 million vehicles in 2008. Automotive assemblers have invested 77 billion baht in Thailand in 2008 with 251 projects being currently undertaken at present making Thailand the largest automotive producer in Southeast Asia. With a highly developed level of infrastructure and proximity to Asia’s biggest markets, Thailand is a natural regional logistics hub. Geographically, Bangkok is closer to the heart of Asia than any other Asian city aside from Shanghai and Taipei, an incredibly important factor when considering transportation costs, time to delivery of goods, and access to supply and distribution networks. Vehicle production in Thailand is likely to increase from 1.2 million units in 2006 to approximately 2.1 million units in 2016 with forecasted growth of 6%. 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 One ton Pickup Passenger Cars Others Source: Frost & Sullivan Japanese OEMs such as Toyota, Isuzu, Mitsubishi and Honda are likely to have an increased production capacity in 2016 accounting for over 75% total Thailand capacity. © 2009 Frost & Sullivan
  9. 9. 8 Annual Production Capacity by OEM Capacity (Units) in 2008 Capacity (Units) in 2016 Toyota Motor Thailand 550,000 730,000 Isuzu Motors (Thailand) 220,000 265,000 MMC Sittiphol 206,000 208,000 Honda Automobile (Thailand) 120,000 273,000 General Motors Assembly Center 160,000 250,000 Auto Alliance (Thailand) 155,000 275,000 Siam Motor and Nissan 139,000 212,000 Others 75,000 120,000 TOTAL 1,625,000 2,333,000 Assembly Plants Brand Source: Frost & Sullivan 2.3 Automotive Policies Free Trade Agreements of Thailand with other nations Automotive policy regulations are aiding global players to set up their production, assembly, retail base in Thailand. One of the most successful Thailand policy measures has been the Free Trade Agreement (FTA) with other nations such as ASEAN 6, Australia, China, India and New Zealand. Source: Frost & Sullivan © 2009 Frost & Sullivan
  10. 10. 9 Free Trade Agreement Effective Date FTA Effect Thailand - ASEAN January 1993 Autos and auto parts components exports were valued at US$ 1.5 billion to ASEAN region from Thailand. ASEAN’s pursuit of FTAs with major trading partners, Thailand and its foreign investors may gain access to new markets such as South Korea, Japan and India. Thailand - China October 2003 Early harvest agreement on farm trade alone. Auto parts and accessories are not included in the FTA at present. Thailand – India September 2004 Thailand - Australia January 2005 Thai auto components for cars, UVs and commercial vehicles, to be cheaper in Australia, with consumers having wider choice Thailand – New Zealand July 2005 Foreign manufacturers in Thailand, who have set up plants, to have access to New Zealand market in future, mainly for pick-up trucks initially and other vehicle subsequently as the FTA develops Indian component manufacturers expected to set up bases in Thailand to serve domestic and regional economies. FTA also aids in Thailand aftermarket parts to penetrate Indian automotive market. Source: Frost & Sullivan Eco Car: Strategic Initiative from Thailand The eco-car idea was conceived in Thailand in 2007 to reduce energy consumption, preserve the environment and lessen the dependence on foreign oil. The eco-car policy aims to showcase Thailand as the next generation production hub for cars that are environmentally-friendly including alternative fuel cars and hybrids. Seven manufacturers in Thailand have already shown commitment to invest in the eco-car project with an estimated annual capacity of about 700,000 units by 2015. © 2009 Frost & Sullivan
  11. 11.     10     Manufacturer Production target Prod starts Investments (Million baht) Models expected Mitsubishi Motors 107K units 7,700 2010 1.3L sedan Concept CX Asian version, more than 1 model on same platform Toyota Motor Thailand 100K units 6,600 2012 1.1L to 1.3L sedan, rebadged Myvi, 2nd gen Boon Passo, new global A car Tata Motor 100K units 7,300 2010 1L to 1.3L sedan, 1.3L diesel, luxury Nano version, 2 models same platform Suzuki Motors 138K units, 25 to 35K per year 9,500 2010 With GM, Maruti Suzuki global, Wagon R, Suzuki Cervo Siam Nissan Motors 120K units, 20k to 25K per year 5,500 2010 Next Generation of Micra/March at least 2 models on same platform Honda (1st Eco Car) 120K units about 20 to 30K per year 6,700 3Q 2009 1.3L sedan, global WOW concept car, 2/3 models on same platform Ford Mazda (AAT) 100K units, 175K cap additional 140/yr 20,800 2009 Ford Verve concept/Fiesta and Mazda 2 Source: Frost & Sullivan, Eco-cars for exports even to less developed countries have to comply with eco-car specifications to enable manufactures to receive their eco-car incentives. The actual production capacity must not be lower than 100,000 units per year from the fifth year of the projects operation. OEMs have to cater to certain regulations to get incentives from the Royal Thai Government. The main regulation specified that the eco-cars should be fuel efficient, consuming not over 5 liters per 100 kilometers and should have a minimum pollution standard of EURO4 or higher, emitting no more than 120 grams of carbon- di-oxide per kilometer. The car should also satisfy passenger safety standards for both front and side impact as specified by UNECE Reg. 94 and Reg.95 respectively. Eco-Cars (700k) CBU Export (70%) • Model variants of similar platform acceptable • But as per specifications and requirements of Eco car regardless of destinations • Meets stringent EU standards CKD Export (20%) • CKD parts have to be the key engine components manufactured in Thailand specifically for eco car. • 40% local or ASEAN content in order to export to ASEAN under AFTA • ASEAN country like Indonesia may choose this to support local industries Domestic Market (10%) • Fuel efficient • Environment friendly • First time buyers likely to be attracted   Source: Frost & Sullivan © 2009 Frost & Sullivan     
  12. 12.     11     Thailand Automotive Industry Master Plan Thailand’s master plan for the automotive industry aims to create a predictable environment for business operations within Thai automotive industry. Thailand’s vision is to position itself as the production hub in Asia that adds value to the country in terms of having a strong domestic supplier base by 2011. Master Plan for Automotive Industrial Development (2008-2011) Automotive Motorcycles • • Produce vehicle more than 2 million units per year in 2011 • • Export market to be more than 55% • • Component Parts Production value of more than 1 trillion baht • Auto Parts suppliers to use at least 70 percent local content • Production of more than 4 million units per year Export of over 2 million units Produce OEM & REM Parts with high quality standards and reach an export value more than 400,000 million baht per yr. Develop capability in design, research and development Source: Frost & Sullivan 2.4 Auto Industry Supply Chain Structure Thailand has about 16 automotive and 7 motorcycle assemblers at the top of the supply chain that is driving the growth in the automotive sector. Vehicle assemblers are all large scale enterprises that are joint ventures or foreign owned. Furthermore, the value chain consists of around 648 large, medium and small scale tier- 1 suppliers that are either foreign majority-owned company, Thai majority-owned company or wholly Thai owned company. Foreign majority-owned suppliers contribute the bulk of Tier-1 suppliers with a percentage share of approximately 47% while Thai majority-owned companies account for around 30% and wholly owned Thai companies share is minimal with 23% in Tier-1 suppliers category. Almost 80% of foreign majority-owned Tier-1 suppliers are Japanese firms belonging to keiretsu groups since assemblers at the top of the value chain are mostly Japanese OEMs. Japanese tier-1 companies can be categorized into three groups: a member in Japanese family companies, a joint venture with Japanese technology owners, and a company having technical assistance or licensing agreements with Japanese firms. At the bottom end of the value chain, there are more than 1,100 small and medium local Thai enterprises producing replacement parts. © 2009 Frost & Sullivan     
  13. 13.       12   Source: Thailand Automotive Industry Directory The past few years has seen an increase in the number of non-Japanese auto parts manufacturers because of investments from Ford and General Motors in Thailand’s automotive industry. The American assemblers have brought a number of their own Tier-1 suppliers to Thailand. Though European assemblers have entered the Thai market earlier, they tend to have fewer local part suppliers due to their small assembling volume. In recent years, many new overseas joint ventures companies were set up to supply parts and accessories to the global manufacturers. The replacement market (REM) has greater volume consumption from independent Thai companies while the rest of the output is consumed by original equipment manufacturers (OEM). The local part manufacturers supply approximately 80% of all parts used for assembly of pick-up trucks, around 55% is supplied for passenger cars and nearly 100% for motorcycles manufacture and assembly. Locally produced or assembled parts include engines, suspension control and spring, axles, hubs, propellers shaft, brakes, clutches, steering system, body parts, electronic parts, air conditioning, tires, wheels, internal and external trim components and glass. © 2009 Frost & Sullivan     
  14. 14.     13     2.5 Thailand Automotive Cluster Steel Plastics Assemblers Motorcycles Passenger Cars Distribution Pick up Trucks Finance Rubber & Tires Testing Electronics Components and Module Makers (Tier-1) Glass Specialised Consultants Engines, Drivetrains, Steering, Suspension, Brake, Wheel, Tire, Bodyworks, Interiors, Electronics and Electrical Systems Services Leather & Fabric Parts (Tier-2 and Tier-3) Machinery Stamping, Plastics, Rubber, Machining, Casting, Forging, Function, Electrical, Trimming Globally Competitive Tools Mold & Die Regionally Competitive Government Educational and Technical Institutions Associations Nationally Significant Nationally Insignificant Jigs & Fixture   Source: Team revision of Christian Ketels, “Thailand’s Competitiveness: Key Issues in Five Clusters”, ISC/HBS Thailand Automotive Cluster comprises assemblers, components and module makers, parts suppliers, associations, government, educational and technical institutions with support in terms of distribution, finance, testing, specialized consultants and services. The cluster continuously studies the shortcomings of the automotive industry in Thailand and improvements that are needed to make Thai automotive industry globally competitive. Presently, the pickup truck is the only segment in Thailand that is globally competitive in the automotive sector. However, the Thai automotive cluster is trying to address some of the issues in terms of scarcity of skilled workers and low management abilities in the area of quality control to match international standards. Another major issue facing the cluster is the inability of Thai parts companies to compete with international firms in terms of technology and quality standards. Some of the issues faced have been solved with the support of foreign automotive companies in Thailand. For example, Toyota has engaged more local suppliers and helped them move upwards in value chain. Thailand has already started moving in this direction by leveraging the existing presence of MNCs to deepen its cluster by inviting them to set up more local R&D facilities, product development and marketing activities thereby improving the skill sets of employees and hence projecting Thailand as an attractive destination for setting up automotive assembly, parts and service centers in the Asia Pacific region. © 2009 Frost & Sullivan     
  15. 15.     14     2.6 Profile of Automotive Assemblers and Supplier Bases in Thailand The Thai automotive industry is clustered around industrial estates in Bangkok and surrounding areas provinces especially in Samut Prakan, Chachoengsao, Chonburi and Rayong. The largest number of automotive assemblers are located in Samut Prakarn province followed by Rayong. Northern Northeast Bangkok Rayong Samut Prakarn Samut Sakhon Nakhon Pathom Nonthaburi Pathum Thani Central South Source: Frost & Sullivan The industrial estates in the Central province are mostly designed to serve the automotive industry with easy to access infrastructure such as local roads, highways, railways and nearby ports. Some manufacturers have established their own components market with local suppliers and taking care of the delivery themselves to ensure that their production is not delayed. For overseas exports, finished goods are shipped through ports located in Bangkok, Chonburi and Rayong. Most automotive suppliers are located near the vehicle assemblers. Most of Thai suppliers have a strong portfolio in the automotive body parts segment due to lack of skills required in this segment compared to other auto parts. Bangkok has the highest number of concentration with approximately 230 suppliers followed by Samut Prakarn with 158 suppliers.   © 2009 Frost & Sullivan     
  16. 16. 15 Pathumthani Total Suppliers : 39 Body Parts Engine Parts Chonburi Total Suppliers : 55 18% 13% Electrical Parts Bangkok Total Suppliers : 232 13% 22% Tran & Steering Parts 8% 25% En g i ne Parts Tran & Steering Parts Bo d y Parts 15% Electrical Parts 9% 5% 10% 9% 6% Suspension & Brake Parts 4% Tran & Steering Parts 8% Suspension & Brake Parts Bo d y Parts Engine Parts Accessories Ac c es s ories 6% Mo l d & Di e 4% Electrical Parts 6% Accessories 6% Suspension & Brake Parts 4% Mo l d & Di e 3% Rayong Total Suppliers : 41 Samut Prakarn Total Suppliers : 158 Bo d y Par ts 22% Bo d y Parts 24% En g i ne Parts 8% En g i ne Par ts 15% Tran & Steering Parts 8% Tran & Steering Parts 15% El ec tr i c al Parts 15% Electrical Parts 10% Ac c es s ories 7% Suspension & Brake Parts 3% Mo l d & Di e 4% Ac c es s ories 7% Suspension & Brake Parts 12% Mo l d & Di e 2% Source: Thai Automotive Institute Auto parts and accessories exports have increased over the past few years and accounted for US$8.4 billion in 2008. Parts and accessories contributed almost 60% of the revenues while piston engine and accessories (25%), motorcycle parts and accessories (9%), ignition parts for engines (2%), bicycle parts (1%) and other vehicle parts and accessories (2%) contributed for remaining export revenues. Indonesia was the largest export destination for Thailand auto parts and accessories in 2008 contributing 20% of the export revenues. Source: Department of Export Promotion, Ministry of Commerce, Royal Thai Government © 2009 Frost & Sullivan
  17. 17.     16     Export Revenues (Million USD) In the last 5 years, Thailand has witnessed an increase in investments in its automotive parts segment. Most of the international Tier 1 suppliers now have plants in Thailand. Auto Alliance (Thailand) currently purchases approximately Bt 60 million worth of components annually from 177 different suppliers, of which 90% are local. 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 2006 2007 2008 CBU Engines Spare Parts Jig and Die OEM Parts ‐ Body OEM Parts ‐ Component   Source: The Thai Automotive Industry Association There has been an increase in investments and sales related to motorcycles, parts and accessories in Thailand. Production Export Sales Year Total Units Moped Units Sport Units Total Amount CBU & CKD OEM & Parts Spare Part Total Units 2005 2,309,214 2,218,959 90,255 1,027.0 22,768.99 11,428.22 729.56 2,112,426 2006 2,075,579 2,000,617 74,962 1,126.5 24,797.24 13,652.26 690.98 2,054,588 2007 1,652,773 1,563,434 89,339 1,244.2 27,298.42 14,008.11 1,007.97 1,598,613 2008 1,923,651 1,767,429 156,222 1,384.2 26,414.69 20,022.56 638.82 1,703,376 Amount : million USD Source: The Thai Automotive Industry Association Most of the suppliers in Thailand are certified with QS 9000 certification for quality. Systems used in auto parts assembling, parts and servicing are ISO 9000 certified for quality. Surveillance audits are conducted once every 6 months to check for quality compliance. Assemblers and parts suppliers in Thailand are also striving to comply © 2009 Frost & Sullivan     
  18. 18. 17 with non-quality standards to improve the outlook of the automotive industry. Some of the non-quality certifications include ISO 14001 (Environmental – most of the assemblers and component suppliers have this certification in Thailand), OHSAS 18001 (Operational safety aspects – still at a nascent stage), SA8000 (Social aspects – child labour law, labour law compliance) safety and emissions test compliance. “It is a standard for suppliers in Thailand to be ISO certified. If you are not certified, then suppliers will have a tough time competing in Thai parts and accessories market” General Motors, Thailand Parameters T ier -1 Supplier Sales $10 - $60 Million Structure 3 – 5+ Plants T op Management F amily Owned, Entrepreneurial, Multinational, Some Joint Ventures Manager ial Masters Degree, MBA Workf orce 85% High School Graduates, Vocational T r aining Maintenance / Skilled T r ades Diploma or Vocational Certif icates Quality <100ppm (f or top tier- 1 suppliers) >1000ppm (for other tier-1 suppliers) >5000ppm (for most of the supply base) Delivery Some OEMs pushing f or Just In T ime Cost F iercely cost competitive industry Inventory Higher than the benchmark f igures Quality Awar eness and Systems Implemented IMS, T QM/T PM, Six Sigma Source: OMEX Co Ltd © 2009 Frost & Sullivan
  19. 19.       18   3.0 SOURCING FROM ASEAN ASEAN has the potential to be an auto parts and accessories sourcing hub. As a group, ASEAN-member countries can provide a wide range of components and assemblies to OEMs. Toyota and Honda recognized the importance of ASEAN and have strong supply chain management in the region. Source: Frost & Sullivan Since Thailand is the largest production base in ASEAN, naturally it becomes the nerve center of the supply chain for most automotive companies. There are several advantages of sourcing from Thailand. Thailand as a Sourcing Hub Global Automotive Suppliers Operating in Thailand Almost all the top global automotive suppliers operate in Thailand with Japanese players being the most dominant mainly due to Japanese OEMs driving the market. However, US and European suppliers are not far behind and are having a considerable presence in the Thai automotive market. © 2009 Frost & Sullivan     
  20. 20.     19     Japanese Global Suppliers Japanese Global Suppliers •Aisin Seiki •Alpine •Asahi Glass • Bridgestone Corporation • Calsonic Kansei Corporation • Clarion • Daido Metal • Denso Corporation • Exedy Corporation • Fujitsu Ten • Hitachi • Kayaba Industry • Keihin Corporation • Koito Manufacturing Company • Koyo Seiko • Matsushita Communication Ind • Mitsuba Corporation • NGK Spark Plug Company • NHK Spring • Nichirin • Nippon Seiki • NOK Corporation •NSK • NTN • Showa Aluminium Corporation • Stanley Electric Company • Sumitomo Electric Industries • Sumitomo Rubber Industries •Takata Corporation • Tokico European Global Suppliers •Autoliv • Bosch • Draxmaier Gruppe • GKN • Hella • Mahle • Michelin • Saint Gobain • SKF Other Global Suppliers •Arvin Meritor • Dana Corporation • Delphi Automotive Systems • Engelhard Corporation • Exide Technologies • Federal-Mogul Corporation • Goodyear Tire and Rubber Co • Hayes Lemmerz • Johnson Controls • Lear Corporation • TRW • Valeo • Visteon Source: SVI 4.0 ADVANTAGES OF SOURCING FROM THAILAND Module Production System, Pick-up and Eco car production base, Global Supplier network HRD Collaboration – Research Institute, Education System, Training System and Certification Free Trade Agreements (FTAs) within ASEAN and other regions Thailand parts and accessory suppliers cater to international energy and environment Standards Centralised location of OEMs and suppliers Source: Frost & Sullivan © 2009 Frost & Sullivan     
  21. 21.        20   Module Production System, Pick-up and Eco-Car Production Base, Global Supplier Network Thailand is the second largest producer of pick-up trucks with an annual production of over 1 million units in 2008 and will likely be the future production base for eco-cars with annual production capacity of 700,000 units in 2015. Thailand also has the advantage of having a global supplier network and local Thai companies are acquiring the technology, production expertise from OEMs and suppliers to improve the quality, production lead times and increased productivity. Thailand has good production control processes and good systematic checks and procedures that will help to continuously improve quality and productivity.  Human Resource Development (HRD) Collaboration – Research Institute, Education System, Training System and Certification Skilled workforce improves the quality of products and is very critical in the auto parts industry. Thailand already has HRD collaboration with different research and education institutes for this purpose so that the workforce is groomed right from the early stages. Also, the workers are being trained and certified to be globally competitive. For example, Nissan’s skill certification system in Thailand enables workers to acquire basic skills required for the job and all the workers are required to attain certain skills to be able to perform a particular job.  Free Trade Agreements (FTAs) within ASEAN and other regions FTAs are likely to act as a major driver to increase sourcing from Thailand. Thailand’s auto parts and accessories have subsidized tariffs under FTA agreement. For example, the FTA signed between Thailand and Australia will see tariffs on all automotive parts, components and accessories phased to zero in 2010 from 20% currently.. These incentives are likely to act as a driver for sourcing from Thailand.  Thailand Auto Parts and Accessories Suppliers Cater to International Energy and Environment Standards Almost all the suppliers in Thailand are QS 9000 and ISO 9000 certified for quality that will enable easier sourcing since the quality of assembling products, production systems are based on international standards with minimal defects. Suppliers in Thailand are also striving to achieve non-quality certifications such as ISO 14001 (Environmental – Most of the assemblers and component suppliers have this certification in Thailand). © 2009 Frost & Sullivan     
  22. 22.        21   Centralized Location of OEMs and Suppliers Thailand has a much centralized value chain when it comes to auto parts and vehicle assembly. Most of the auto companies and suppliers are located close to Bangkok and Rayong and hence sourcing of components will be easier from a central location. Thailand is a “One Stop Center” for sourcing auto parts and components. 5.0 THAILAND AUTO PARTS & ACCESSORIES EXHIBITION (TAPA 2010) The 4th Thailand Auto Parts & Accessories (TAPA 2010) exhibition is set to be held from April 28 to May 2, 2010 at Bangkok International Trade & Exhibition Center (BITEC), Bangna, Bangkok. The event will be ASEAN’s largest auto parts and accessories show. The exhibition brings together Thai and regional manufacturers (OEM/REM) of vehicles, auto parts, spare parts and accessories to meet buyers from around the world. As a regional automotive manufacturing hub, Thailand’s automotive suppliers have the expertise to meet international standards in terms of quality, delivery and cost for both original equipment and replacement markets (OEM/REM). The export-oriented nature of the industry gives it the necessary scale and advantage to be price competitive, while providing the engineering design capabilities to develop automotive parts for global needs. TAPA 2010 will be the best place to source for auto parts and accessories from ASEAN. It will be your one-stop center to source for a variety of automotive parts and accessories. TAPA 2010 is designed to meet the expansive sourcing needs of the automotive and accessories industry. It is expected to be ASEAN’s premier sourcing exhibition. ASEAN has many quality auto part and accessories companies and they have been recognized worldwide for their high standards whether in OEM/REM parts, spare parts or accessories. The Department of Export Promotion, Ministry of Commerce, Royal Thai Government is keen to work together with other countries in ASEAN to promote this region as the auto parts sourcing hub of the world. TAPA 2010 will see about 500 qualified exhibitors across ASEAN displaying their products at more than 10,000 square meters at BITEC, Bangna. More than 16,000 visitors from ASEAN, Africa, India, Bangladesh, China, Japan, Middle East, Europe, Latin America and USA are expected to attend the exhibition. © 2009 Frost & Sullivan     
  23. 23.       22   One Stop Center With an extensive list of exhibitors from around the world, TAPA 2010 guarantees excellent opportunities to meet quality exhibitors and network with trade partners, suppliers, government officials and media. Visit and see the latest innovative products and technologies in the auto industry. Excellent Opportunities Organized by the Department of Export Promotion, Ministry of Commerce, Royal Thai Government biennially, TAPA is the most comprehensive, innovative and exciting automotive exposition ever staged in Asia, providing the best global sourcing in the automotive industry, including advanced auto parts. This event provides up-todate information, new trends as well as product designs. It brings together Thai and regional manufacturers (OEM/ REM) of vehicles, auto parts, spare parts and accessories to meet buyers from around the world. Buyer’s Pavilion Purpose of this space • Buyers have a convenient space to meet sellers and hold discussions • They can also display some publicity material and brand the stall Town Hall Sessions on Day 1 for Key Buyers • Buyers to hold 1 hour open presentations about their sourcing plans for ASEAN • They can specify the components they are looking for, profile of prospective vendors, their requirements and procedures • Exhibitors can register for such sessions and attend them free of cost • Interested exhibitors can later seek appointments with relevant Buyers © 2009 Frost & Sullivan     
  24. 24. For more information on TAPA 2010, please contact: Department of Export Promotion, Office of Export Service 2 Tel +66 (0) 2512-0093 ext.272, 250, 285 Fax. +66(0) 2513 1565, 2512-2234 E-mail:, Website:, About Department of Export Promotion Thailand's Department of Export Promotion is functioned as the trade information service provider for Thai manufacturers and exporters as well as foreign importers. The Department is responsible to develop and perform activities that promote Thailand’s company and trade and increase the competitiveness of the export sector for instance, the expansion of production bases overseas. About Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 35 offices on six continents. To join our Growth Partnership, please visit © 2009 Frost & Sullivan