TOKYO - Thailand, which won
over foreign auto makers and beat out neighbors
Indonesia and Malaysia to become the "Detroit of Asia",
has begun to solidify its position as the leading
automotive country in the region by increasing its
presence as a production and export base, mainly for
pickup trucks.
The auto industry in Thailand is
the country's No 1 manufacturing industry in terms of
value. And thanks to government support, it is now the
fastest-growing car-manufacturing center for various
makes in the Association of Southeast Asian Nations
(ASEAN).
Sales this year are expected to top 1.5
million vehicles, exceeding the peak in 1996 before the
Asian financial crisis, when vehicle sales in Southeast
Asia plummeted from 1.46 million in 1996 to 446,450 in
1998. After the crash, Hyundai pulled out of Thailand
and Mazda and Toyota, among others, scaled back
operations.
On Wednesday, however, Toyota Motor
Corp chose Thailand as the first production site for its
innovative international multi-purpose vehicle (IMV)
project, which aims to build vehicles outside Japan and
export them to countries around the world.
The
Hilux Vigo, Toyota's first vehicle developed completely
outside of Japan, is available in three versions, with
2.5- to three-liter engines, and is priced from 391,000
baht (about US$9,400) for the standard version to
861,000 baht for the top-range model. Toyota began
production of the truck in Thailand this month and
expects to manufacture 280,000 a year, of which half
will be exported to Europe, Australia, and elsewhere in
Asia.
In Thailand, Toyota will produce IMV
pickup trucks and sport-utility vehicles and diesel
engines for the domestic market and for export to Asia.
Last year, Thailand produced a record 750,000
vehicles, nearly half of all those made in Southeast
Asia. This output level is expected to exceed 900,000
this year and is certain to surpass the 1 million mark
in 2005.
The country exported 152,000 finished
vehicles in the first half of this year, a gain of 42%
on the year, and the total exports for related
industries, including auto parts, exceeded 100 billion
baht. Thailand's domestic market is strong as well, with
sales hitting record levels.
While many auto
makers reduced operations after the 1997 crisis, in an
effort to make up for low plant operating rates,
Japanese auto makers boosted Thai production of pickup
trucks, the popularity of which had declined in Japan.
The Thai government supported the expansion of
the pickup-truck market by using investment tax breaks
to attract more foreign firms and by setting commodity
tax rates lower than those for passenger cars.
Mitsubishi Motors Corp now plans to increase
pickup-truck production in Thailand by about 30% on the
year to some 120,000 units in fiscal 2004 to meet rising
demand in Europe.
The auto maker has already
added a painting line and has boosted production of its
Strada one-ton pickup truck from 16 units per hour to 23
units per hour by increasing assembly workers at its
second Thai plant. About 70% of the company's
pickup-truck output in Thailand is exported.
In
addition to using Thailand as a pickup-truck export
base, Mitsubishi Motors aims to build a
product-development system that can rapidly reflect
local needs in its products in an attempt to help
Mitsubishi Motors (Thailand) Co survive.
The
unit rode out the difficult business situation caused by
the Asian currency crisis and returned to profitability
in fiscal 2002. But production of its Lancer passenger
car for the Thai market has remained sluggish.
Other Japanese automobile and auto-parts makers
have also been stepping up production in Thailand. In
addition to Toyota, Isuzu Motors Ltd also is working
toward boosting output in the country, and auto-parts
maker Denso Corp's Thai unit will work to improve
quality while lowering the cost of its products.
The launch of Toyota's IMV project is expected
to have an impact on the way auto-parts makers operate
in Southeast Asia.
