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A Resilient Thai Auto Industry

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Status of the Thai Auto Industry after the 2011 Flooding. Presentation for AFG Automotive Focus Group Thailand by Khun Charn Saralertsophon, Executive VP from Federation of Thai Industries (FTI).

Status of the Thai Auto Industry after the 2011 Flooding. Presentation for AFG Automotive Focus Group Thailand by Khun Charn Saralertsophon, Executive VP from Federation of Thai Industries (FTI).

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  • 1. A Resilient Thai Automotive IndustryThe Federation of Thai Industries By Mr.Charn Saralertsophon Director General 27th January 2012
  • 2. Global Positioning
  • 3. World ranking of Automotive Production (Jul’11)<x1,000 units> Units10,000 9,000 8,000 7,000 6,000 5,000 Thailand production ranking no.13 globally 4,000 957,846 units in 2011 3,000 2,000 1,000 0 23% rs a ala a Th ssia Br a h ge ia Ru a Ja . Ca ce Tu K. Ko y U. a rm n Cz y d Sp il M ain do ly Fr co Ot ia S.A as re M t in ec an e Ge pa d di in an Ar nes he In It a ys U. an rk na i ex In Ch n ail Source : Fourin 3
  • 4. World ranking of Automotive Sales (Aug’11) Units <x1,000 units>12,00011,00010,000 9,000 8,000 7,000 6,000 Thailand sales ranking no.15 globally 583,957 units in 2011 5,000 4,000 3,000 2,000 1,000 0 rs Au rea Be ina Fr ia Ru a M sia Ko a Ja . 3% 23% ce K. y a U. a n do d Ot d rm il Th ain Ca ly ge o t h um S.A Ge as an pa 20% d di in ali In ilan lan Ar exic ss he It a U. an na ne In Sp nt Ch Br Ne lgi st r er a Source : Fourin 4
  • 5. ASEAN Markets
  • 6. ASEAN Automotive IndustryASEAN Automobile Market Share (Jan – Oct’11) Vietnam, Brunei, 89,858 11,970 Indonesia , Thailand , 4% 746,199 713,842 32% 34% 2% 5% 23% Singapore, 33,648 Philippines, Malaysia, 119,152 503,898 Total sales of 2,218,567 units Source : ASEAN Automotive Federation 6
  • 7. Thai Latitude
  • 8. Thai Automotive Industry Situation Thai Flood 2011<x 1,000 units>2,000 Japan Tsunami & 2010 2011 (adj. Forecasted) Earthquake ?1,800 •  Production 1,645,304 1,400,0001,600 •  Sales: 800,357 700,000 Hamburger crisis •  Export: 895,855 700,0001,400 1 Mil milestone1,2001,000 800 Tom-Yung Kung crisis 600 400 200 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011F 2012E Production Domestic Export 8
  • 9. Thai Automotive Industry Situation Car Production (Jan – Oct’11) Jan – Nov 2011 = 1,358,369 units Target 1.8 mil. Jan – Nov 2010 = 1,507,901 units % Growth = -1% Target 1.4 mil. 500%240 Japan Tsunami Thai Flood 400%200 172 174160 146 300%120 200% 80 100% 89 49 40 23% 24 0% -68% -25% -85% 0 -100% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Production 2010 Production 2011 % 11 vs 10 9
  • 10. Car Production of Dec 2011 Units180,000 172,004 174,212 157,982 153,646 152,689 147,236 153,180160,000 150,743 151,143 146,231 141,416140,000 132,165 148,878 127,849 145,771 141,049 137,403120,000 105,110 103,849 98,804 99,426100,000 89,179 80,000 60,000 49,439 Jan-Dec 2011 = 1,457,795 units 40,000 Jan-Dec 2010 = 1,645,304 units 320 % (Compared Nov’11) % Growth = - 11 % 23,695 - 28 % (Compared Dec’10) Plan 2011 = 1,794,486 units 20,000 - 31 % (Compared Plan) Actual < Plan = 19% 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Production 2011 Plan 2011 Production 2010Source: Automotive Industry Club, FTI
  • 11. Domestic and Export Production of Dec 2011 Jan-Dec 2011 Total = 1,457,795 units Jan-Dec 2010 Total = 1,645,304 units - Domestic = 723,845 units ( 50%) - 4 % -  Domestic = 750,614 units ( 46%) - Export = 733,950 units ( 50%) - 18 % -  Export = 894,690 units ( 54%)Source: Automotive Industry Club, FTI
  • 12. Thai Automotive Industry Situation Car Export Sales (Jan – Nov’11) Central & PPV South 8% America Europe 11% Asia Passenger 32% 10% car 25% Africa 5% Pickup 67% Middle East 21% Oceania 21% Export Sales Jan-Nov’ 11= 700,581 units Jan – Nov 2011 = 700,581 units CBU Value : ~326,335 Mil. Bht Jan – Nov 2010 = 824,830 Total Export Value : ~494,300 Mil. Bht unitsSource: The Thai Automotive Industry Association % Growth = -15% 12
  • 13. Car Domestic Sales of Dec 2011 Units100,000 93,008 93,122 90,000 87,012 72,012 78,874 79,043 80,000 77,213 70,259 72,902 70,557 70,000 68,398 67,283 65,672 68,261 65,724 63,067 62,205 60,000 57,128 55,851 54,175 55,339 49,560 50,000 42,873 40,000 Car Domestic Sales 30,000 112 % (Compared Nov’11) 26,069 - 21 % (Compared with plan) - 41 % (Compared Dec’10) 20,000 Jan-Dec 2011 = 795,250 units - 1 % (Growth of Jan-Dec) 10,000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Year 2011 Plan 2011 Year 2010 MonthSource: Automotive Industry Club, FTI
  • 14. Car Domestic Sales of Jan-Dec 2011 P-Car: Jan-Dec’11 = 335,202 units Jan-Dec’10 = 343,821 units % Growth = -3% Eco-Car: Jan-Dec’11 = 41,184 units Jan-Dec’10 = 18,740 units % Growth = 120 % P/U 1t: Jan-Dec’11 = 327,675 units Jan-Dec’10 = 347,314 units % Growth = -6% PPV: Jan-Dec’11 = 38,173 units Jan-Dec’10 = 40,479 units % Growth = - 6 % Other: Jan-Dec’11 = 52,611 units Jan-Dec’10 = 50,003 units % Growth = 5 % Jan - Dec’11 = 795,250 unitsSource: Automotive Industry Club, FTI
  • 15. Thai Automotive Industry Situation Contribution to Thai Economics To Manufacturing GDP Strong Suppliers Network Automotive Industry Assembler 10% (Car 16 Companies, Foreign Motorcycle 7 Companies) Joint Venture Foreign Thai Pure Tier 1 Manufacturing Majority Majority Thai (Total 690 GDP 54% 23% 23% Companies) Tier 2,3 Local Supplier (1,700 Companies) Thai Automotive Industry has huge contribution to Thai economy, supported by a strong supplier network.Source : Economist Intelligence Unit, UK TAI 2010 15
  • 16. Car Production of Dec 2011 Units180,000 172,004 174,212 157,982 153,646 152,689 147,236 153,180160,000 150,743 151,143 146,231 141,416140,000 132,165 148,878 127,849 145,771 141,049 137,403120,000 105,110 103,849 98,804 99,426100,000 89,179 80,000 60,000 49,439 Jan-Dec 2011 = 1,457,795 units 40,000 Jan-Dec 2010 = 1,645,304 units 320 % (Compared Nov’11) % Growth = - 11 % 23,695 - 28 % (Compared Dec’10) Plan 2011 = 1,794,486 units 20,000 - 31 % (Compared Plan) Actual < Plan = 19% 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Production 2011 Plan 2011 Production 2010Source: Automotive Industry Club, FTI
  • 17. The Trend
  • 18. Automotive trendTechnological Direction for Vehicles Thailand is here! 18 18
  • 19. Hybrid in Thailand Hybrid Share HV Sales (Jan-Jun 2011) Local HV produced HV Imported Cars starts 0.1% 6,821 CNG E10Bio-Diesel 5.6% 9.2% 47.9% 4,901 E20 13 36.8% 8 E85 3 4 0.4% Total 432,012 units 2005 2006 2007 2008 2009 2010 <units>   Hybrid in Thai market is the smallest section, but its sales has dramatically increased since its introduction phase. 19
  • 20. 2011 Flood &Rehabilitations
  • 21. Thai Government Supportive Policies in Flood 2011Government promptly support the flood victims in automotiveindustry1.  Exempt import duty of machineries.2.  Exempt import duty of auto-parts.3.  Exempt import duty of CBUs for factory that was flooded.4.  Provide soft loan to flood victims.5.  Commercial bank to relax and delay paying loan.6.  Support on moving machineries, tools and products out from flood area.7.  Facilitate in issuing visa of foreign specialists who seek support on flood matters.8.  Relax practices according to Alien Act. to enable foreign company to help local flood victims. 21
  • 22. Thai Government Supportive Policies in Flood 2011 22
  • 23. Yes Thailand
  • 24. Thai Automotive Outstanding Points Hub of Pickup Unique environmental Unique Eco-Car friendly vehicle (Eco-Car) created by Thai govt. Local Hybrid Vehicle Hybrid Vehicle production ie. Camry hybrid, local production Prius and others are coming. -  Toyota Motor Asia Pacific Engineering & Manufacturing Hub of -  Honda R&D Asia Pacificautomobiles & partsRegional R&D center -  Denso International Asia (R&D) -  Isuzu R&D -  Others 24
  • 25. Thailand has largest and expanding production 25
  • 26. Strength and Weakness of Thai Automotive IndustryStrengths•  Thailand is the hub of pickup and derivatives (Niche Product) of the world.•  Regional market is plentiful.•  Government has firm and consistent supportive policies ever since.•  Long experiences of basic technology and skilled labor force.•  Strong supplier networks.•  Industrial estates and infrastructure are well coordinated.•  (Peaceful political situation)Weaknesses•  Disunity of government policies.•  Lack of own technology. (Innovation)•  Raw material and machineries. (R&D)•  Human resources. (Vocational skills) 26
  • 27. SummaryGood Supportive Factors that Thailand is more attractive for investment Government   Attractive government incentives Market   Considerable market size (65 Mil people)   Gateway to 580 million people of ASEAN   Spring board to China & India, GMS and BIMSTEC Infrastructure   Good infrastructure network Supplier   Rich pool of supporting industries   Good access to raw materials   Abundant quality labor forces People   Hospitality, friendly attitude and flexibility Amenity   Low cost of living   Delicious foods and Rich Culture, Arts & Craft.   Attractive Heritage sites 27
  • 28. 28