Automotive

Chinese Car Maker SAIC Motor Corp Faces Roadblocks in Thailand

Published

11 years ago

March 5, 2014

Bchcomber

SAIC Motor-CP boss Wu Huan isn’t sure ‘who the real customers of our MG are.’ SAIC Motor-CP

BANGKOK—When SAIC Motor Corp. announced plans to make cars in Thailand by 2014, it was seen as a significant move by the Chinese auto industry to secure a foothold in Southeast Asia’s largest manufacturing hub.

But China’s top auto maker appears to be running into trouble in one of its first major attempts to produce cars outside the mainland.

SAIC, which is joining with CP Group, Thailand’s largest conglomerate, is entering Thailand at a time when car sales are slumping and political unrest has unnerved foreign investors. In a market dominated by Japanese brands, the joint venture said it is struggling to figure out the target customer for its British-designed MG cars.

Meanwhile, CP Group has said that production is scheduled to start in the fourth quarter, according to an email obtained by The Wall Street Journal, a delay from the expected July start date.

CP Group declined to comment on the email, referring questions to Wu Huan, president of the joint venture, SAIC Motor-CP Co.

“Nothing will stop us from launching the car in July,” said Mr. Wu.

But IHS Automotive, a research firm, also expects production to be delayed up to six months “given the domestic market slowdown and sluggish vehicle demand,” said senior analyst Jessada Thongpak.

It is common for car makers to face production hiccups, especially when they are entering a market for the first time. But SAIC’s problems provide a glimpse into the challenges that Chinese car makers face as they venture into Southeast Asia to target the swelling and upwardly mobile middle class in countries from Thailand and Indonesia to Vietnam.

The high-profile union between China’s leading auto maker and a company backed by Thailand’s wealthiest family, the Chearavanonts, faces the challenge of carving a niche for itself in a market where Japanese vehicles have been the mainstay. A handful of senior Thai executives have also left the joint venture in recent months due to conflict with the Chinese staff, according to two sources within the joint venture.

Thailand has long been attractive for car production because of its more than 50-year-old auto supply chain and its central location in the region. Car makers including Toyota Motor Corp. , Honda Motor Co. and Ford Motor Co. manufacture cars in Thailand for export throughout Southeast Asia, a region that global auto makers expect to be a key engine of growth.

SAIC Motor-CP Co. initially plans to bring only the MG brand to Thailand. But the Chinese-Thai company wants to use Thailand as its manufacturing base to export to right-hand-drive markets such as Indonesia and Malaysia.

Chinese car makers, however, have yet to make inroads in the market. Less than 1% of Thailand’s 1.3 million cars sold last year were Chinese brands, while around 90% were Japanese brands, according to LMC Automotive, a consulting firm.

“In countries like Thailand, where Japanese companies already have established sales networks and good reputation, for competitors to enter this market, they have to have very, very low-price cars,” said Shingo Ikeda, a Singapore-based principal at Roland Berger Strategy Consultants.

The SAIC Motor-CP joint venture is a “hugely important” step forward for the Chinese auto industry, according to Uli Kaiser, publisher of the Thai AutoBook 2014, an industry resource. The joint venture shows “they have capital, they are hungry and they are a formidable force,” said Mr. Kaiser. “I expect the Chinese to be extremely successful, but it will take time.”

For now, Chinese auto makers are having difficulty gaining traction in Thailand.

Great Wall Motor Co. said last week it had postponed plans to build a sport-utility vehicle manufacturing plant in Thailand because of the country’s protracted political unrest.

Meanwhile, Dongfeng Motors (Thailand) Co., an independent distributor of China’s Dongfeng brand minivans and minitrucks in Thailand, postponed a $10 million expansion plan last year, citing political unrest and a weak economy. The brand belongs to a unit of Dongfeng Motor Group Co. , China’s second largest auto maker by volume.

China’s Dongfeng isn’t a shareholder in Dongfeng Motors (Thailand).

Pitaya Tanadamrongsak, managing director of Dongfeng Motors (Thailand), said the company is expanding again because of stable demand for compact commercial cars and export opportunities.

For the SAIC Motor-CP Co. joint venture, the decision of whether to import auto parts from China or to procure them locally is likely to be a key issue.

Mr. Jessada expects a majority of the MG car components to be imported from China initially. Yet if the cars don’t have at least 40% local content, the joint venture could be heavily taxed on exports from Thailand to Southeast Asia, which could make the cars more expensive for consumers.

“If you have the taxation, you can’t compete,” said Mr. Ikeda, noting that it can be difficult to determine what is considered local content.

Mr. Wu, the SAIC Motor-CP Co. president, said he expects to meet the local-content requirement.

The joint venture’s key challenge, he said, is that “before we sell the car, I’m not quite sure what the real requirements are, who the real customers of our MG are.”

In recent months, the joint venture, 51% owned by SAIC Motor and 49% owned by CP Group, also lost a handful of its senior executives, according to two executives who left. The executives said that Chinese employees were reluctant to listen to the ideas of their Thai colleagues, even those who had been hired from the local auto industry, on how to run the car-making operation. They declined to be named because they aren’t authorized to speak on the record.

An SAIC spokeswoman in China, when asked about personnel issues at its Thailand joint venture Friday, said: “I don’t think that is true.” Later in an emailed response, the spokeswoman wrote: “For both SAIC and CP, our focus is to make the project a success and to build an excellent joint team.”

CP Group referred comments to the joint venture. The joint venture didn’t respond to requests for comment Friday.

Mr. Wu expects its manufacturing plant in eastern Thailand’s Rayong province to be able to produce 25,000 cars in the first year and 50,000 cars in the second year.

But IHS Automotive estimates that the joint venture’s actual production in 2015 will be less than 10,000 cars, and may rise to only 15,000 cars by 2020.

Because Japanese brands are so ubiquitous and accepted, SAIC “may not be very successful in the domestic market” for a while, predicts Mr. Jessada.

Automotive

Russell’s early departure leaves Lando Norris on pole at the Hungarian F1 GP.

Published

7 months ago

July 20, 2024

Salman

(CTN News) – Lando Norris and his McLaren squad survived a tough qualifying session for the Hungarian Grand Prix, but they know they must perform on Sunday.

Contents

McLaren is doing well since Lando Norris won the Miami Grand Prix.Lando Norris completed his best lap despite two crash-related stoppages.

Lando Norris needed to win Budapest after Oscar Piastri locked off the top row in the field’s fastest McLaren. Recent races have been costly owing to wasted opportunities and little mistakes.

He matched Max Verstappen’s pole lap at the Hungaroring, who was unhappy to finish third. In a confident and aggressive approach, the 24-year-old finished more than three tenths ahead of the Dutchman, hitting the apexes.

Piastri followed Lando Norris by two hundredths of a second on the second hot run, demonstrating McLaren’s speed.

McLaren is doing well since Lando Norris won the Miami Grand Prix.

His potential triumphs have been cost by team and driver error, for which both parties have taken responsibility. On Sunday, he and McLaren will know they must do well.

Norris was quietly pleased with his historic first pole in Hungary and third overall. Although confident, McLaren will also be proud of their recent race progress. No one has won the pole in Budapest since Lewis Hamilton won the race and flag in 2012.

Norris and his crew recognize they must capitalize on closing gaps with 12 races left to drive Verstappen to the finish. Lando Norris understands. Behind Verstappen by 84 championship points.

“I know we missed out on some races, but we did the best we could in every one of them, and I don’t want to get back into all that stuff,” he said. I expect Oscar and Max to challenge me in the rear, not a clean weekend.

“Every location and point must be maximized; the more we can do to return to Max and Red Bull, the better.”

Hungary is a great opportunity since Lando Norris Verstappen was plainly unhappy with his car and outperformed. This disappointed him twice because the team had swiftly upgraded this race.

Verstappen had stated that the upgrades will define the second half of the season, but he admitted that he did not think they had gone far enough and could not defeat the McLarens.

“The changes are effective, but we still need more as we are not at the top,” said he. “Despite the imbalance, I liked the laps. I was pushing hard, so you had these little moments. Fast lap times are less crucial today. Simple: we need to work more because we’re moving slower. McLaren’s qualifying performance suggests a lot of ground to cover.

Lando Norris completed his best lap despite two crash-related stoppages.

Verstappen looked great in dry Q3 hot laps. He set a record with a lap time of 1 minute, 15.555 seconds and was quickest through each sector.

Lando Norris followed and pushed through the corners with fearlessness, posting a perfect 1:15.227 lap time. Piastri improved to second place on the penultimate laps while Verstappen did not, and Yuki Tsunoda’s crash halted the session.

A tardy coda didn’t matter when practice resumed because the last two minutes on old tires were worthless. McLaren has all the cards, but they must perform at the highest level to prove the legendary brand can win again.

Carlos Sainz of Ferrari was fourth and Lewis Hamilton of Mercedes fifth. George Russell, Sainz’s teammate, was unexpectedly ousted in the first round.

Sergio Pérez of Red Bull struggled again in the first qualifying round. He hit the curb, lost the rear at turn eight, and crashed, interrupting the session.

Poor performance again for the Mexican, whose Red Bull berth is in risk after a succession of poor performances, especially in qualification. His contract, recently extended to 2025, may have a performance clause, and Red Bull is unlikely to tolerate him underperforming for long. He was sixteen.

Russell fell behind because Lando Norris Mercedes didn’t fuel the car until the session ended. The British driver was eliminated in 17th place after staying out when the track dried after the break.

Charles Leclerc of Ferrari placed sixth, Fernando Alonso and Lance Stroll of Aston Martin placed seventh and eighth, Daniel Ricciardo of RB placed nine, and Tsunoda placed tenth.

Nico Hülkenberg and Kevin Magnussen of Haas finished 11 and 15, Valtteri Bottas of Sauber 12 and Alex Albon and Logan Sargeant of Williams 13 and 14. Esteban Ocon and Pierre Gasly placed ninth and twentieth for Alpine, while Guanyu Zhou placed eighth for Sauber.

SOURCE: GN

Automotive

M5 Partially Closed as Cullompton-Exeter Crash Hospitalizes Two

Published

8 months ago

July 12, 2024

Salman

(CTN News) – Two people were sent to the hospital for treatment as a result of the M5 tragic vehicle accident that happened in Devon.

Contents

M5 happened in Exeter, according to reports.Here’s what Devon and Somerset M5 Fire and Rescue Service said:“We know the M5 closure is causing traffic.”

The accident between two vehicles was the cause of the disaster. One more consequence of the crash is that it has left the M5 partially blocked to traffic to this day.

Between junction 28 for Cullompton and junction 29 for Exeter, the highway was blocked in both directions; however, one lane on the southbound carriageway has been opened up for previously closed traffic.

In a statement issued by the South Western Ambulance Service NHS Foundation Trust, they stated that they were notified of a traffic accident that had happened in the Exeter district at 2:29 p.m. on Friday, July 12.

M5 happened in Exeter, according to reports.

Furthermore, information was given to them by the South Western Ambulance Service.

To provide medical assistance to those injured, four land ambulances, each with two crews, an air ambulance, a critical care M5 vehicle, a doctor, an operations officer, and a responding officer were dispatched to the scene of the incident.

Furthermore, a critical care vehicle was dispatched. We also dispatched an air ambulance to the scene of the event.

Two patients were transported to their respective hospitals: one was transported by land ambulance to the Royal Devon and Exeter Hospital, while the second patient was flown there by air ambulance.

After being moved, the two patients were sent to hospitals in Devon and Exeter, respectively. Simultaneously, both patients were transferred to their respective sites at the same time.

Here’s what Devon and Somerset M5 Fire and Rescue Service said:

“We responded to the scene of a road traffic collision on the M5 at 2.30 p.m. today, between junctions 28 and 29.” The statement cited above was part of an official declaration.

A car that had been hit by another car coming from the other direction had two persons inside that had been rescued. It had been traveling in the other direction.

We offered support as the people were being taken out of the car. These people are now receiving medical assistance from the ambulance service in order to fulfill their duties.

The event caused significant delays for the M5 and the routes that pass through Exeter during the period when traffic was being redirected. In order to accommodate the traffic, this was being done.

A southbound vehicle experienced wheel failure, causing it to cross the center reserve and merge with the northbound road approaching. The car was going the wrong way, which is why this happened. The vehicle was traveling southward at that precise moment.

National Highways indicated that based on the facts they have provided, it is expected that the police would begin their investigation into the occurrence given the magnitude of the calamity that occurred. The entity that made this information public was National Highways.

The Devon and Cornwall Police Department issued the following statement:

“We know the M5 closure is causing traffic.”

The statement that was released is located beneath you. “We will get people moving safely when we can but please bear with us while we deal with the incident and causalities at the scene.”

In order to accommodate cars and other small vehicles that were traveling on the now-closed northern route towards M5 Taunton and Bristol, the back of the line has been shifted.

This was done to create space for these cars, which were heading towards Taunton and Bristol. The purpose of this activity was to provide space for larger cars. At this point, it seems like more and more vehicles are being stopped from going forward.

Due to this incident, a second lane has been opened up for use by any and all vehicles traveling southward.

SOURCE: ITV

Automotive

Honda to Cease Production at One of its Thailand Auto Factories

Published

8 months ago

July 10, 2024

Salman

(CTN News) – The Japanese vehicle firm Honda Motor made the news in a statement that was posted on Tuesday. The statement stated that the company intends to center its production at the site that it operates in the province of Prachinburi.

Contents

This is according to Honda’s spokeswoman.Currently, Honda has no plans to invest in Thailand.

As a consequence of this, the production of automobiles will be halted at the facility that it operates in the province of Ayutthaya in Thailand by the year 2025.

The more difficult circumstances that the second-largest car manufacturer in Japan is facing in the country of Thailand, which is located in Eastern Southeast Asia, are exemplified by this move. Thailand is located in Southeast Asia.

There are several reasons for this, including the fact that Chinese firms are determined to grow their market share in Thailand, and a growing number of consumers are expressing an interest in electric vehicles (EVs). They both play a role in contributing to the problem.

The combined output of automobiles produced by Honda’s two facilities has fallen throughout the course of the succeeding four years, going from 228,000 vehicles in 2019 to less than 150,000 vehicles annually. This downward trend has occurred during the course of the past four years.

The preceding four years have been the time period during which this decline has taken place. With regard to the sales that the company has made in Thailand throughout the course of the past four years, there has been a consistent range of less than 100,000 to less than 100,000 for the entirety of this time period.

This is according to Honda’s spokeswoman.

When the factory first opened its doors in 1996, the company anticipates that it would continue to manufacture vehicle components at that location. When the firm finishes manufacturing vehicles at the Ayutthaya facility in the next year, the spokesperson stated that the company intends to continue producing automobile components at the plant.

In accordance with the statement that was given by the spokesman, the Prachinburi factory, which was built in 2016, will be utilized for the purpose of integrating the facilities with which automobiles are created. This was said in the statement. There are only two factories in Thailand that are owned and operated by the vehicle manufacturer, and these two factories are the only ones in the country.

According to the statement made by a spokeswoman for Honda in Thailand, the company’s goal is to reduce the disparity between the number of automobiles it produces and the number of sales it has experienced in the nation.

According to the remark that was made by the spokesman for the company, the automobile manufacturer are already exporting their products from Thailand, particularly to other Southeast Asian countries such as Indonesia and the Philippines. According to a statement that was sent by a spokeswoman for the company.

Currently, Honda has no plans to invest in Thailand.

When it comes to mainland China, Honda and Nissan Motor, a Japanese automobile manufacturer that competes with Honda, have been hit particularly hard by competition from rising Chinese manufacturers.

Nissan Motor is a competitor of Honda. As a result of the fact that these businesses provide reasonably priced plug-in hybrids and electric vehicles that are loaded with software, a significant number of customers have been drawn to them.

Now, Japanese automobile manufacturers are at risk of losing clients in countries outside of China, such as those in Southeast Asia, to Chinese companies that are increasingly attempting to increase the quantity of automobiles they export and build up operations outside of China.

As a result, Honda Japanese automobile manufacturers are facing a potential loss of customers. They are exposed to this danger as a result of the fact that Japanese brands compete with Chinese brands in these locations.

BYD, a Chinese manufacturer of electric vehicles, recently launched a plant in Thailand that will be responsible for the production of automobiles that are powered by electronic batteries.

This plant was established last week. The Chinese electric car manufacturers are beginning to establish facilities in the country, and this factory is a component of the wave of investments that they are making in the country. These investments have a total value that is greater than 1.44 billion dollars together.

SOURCE |SCMP