Automotive

How Thailand has Become the ‘Detroit of Asia’

Published

6 years ago

July 11, 2018

Bchcomber

BANGKOK – Thailand has been a stronghold for automobile manufacturing for decades. It nicknamed itself “the Detroit of Asia,” and the moniker stuck, with good reason. It’s currently the 12th most industrious auto manufacturer in the world, and the largest in Southeast Asia.

Japanese makers like Toyota and Mitsubishi have had operations in Thailand since the 1960s. GM, Ford, Mercedes and BMW all followed. A GM spokesperson said that its plant is a major manufacturing hub for the Asia-Pacific region and Africa, and its vehicles are exported to 15 markets, including Australia and New Zealand.

How did Thailand become an Auto-Making Giant?

For three decades, Thailand has imposed an 80% import tariff on cars and 60% on motorcycles, to keep manufacturing within the country. The government offers land ownership rights for foreign investors and smooth visa and permit processes for foreign auto advisers.

Meanwhile, Thailand’s government introduced various tax incentives favorable to foreign investors. Companies relocating to Thailand are exempt from corporate income tax for eight years. In some areas of the country, such as auto-making hub Rayong, where GM and Ford are based, Thailand reduced corporate tax rates by up to 50%.

Thailand is also well located geographically with convenient ports and airports, allowing exporting ease. Unlike in Indonesia and other competing markets, most auto parts are made and sourced internally — with around 1,500 suppliers in Thailand today — so there’s little need to import them. And a free trade agreement with the nine other countries of the Association of Southeast Asian Nations is another bonus: Automakers in Thailand pay zero or highly reduced tariffs for exporting autos within the region.

Labor is cheaper than in developed nations and China, though not as cheap as in surrounding Southeast Asian nations. But the fact that the labor force has amassed skill and experience is critical.

“This has helped to retain investment in the face of competition from markets such as Vietnam or Indonesia that offer lowered labor costs,” said Maxfield Brown, manager of the Business Intelligence Unit at Dezan Shira & Associates.

Exploding Growth

In 2002, the Thai Automotive Institute announced a six-year plan to transform Thailand into “the Detroit of Asia.” Between 2000 and 2017, Thailand’s auto production grew by 383%.

Although exports account for almost 60% of Thai production, the domestic market is showing signs of growth, in part because of the Thai rising middle class. Only 18% of households did not own a vehicle in 2013, according to numbers from the Nielsen Global Survey of Automotive Demand.

Southeast Asia’s middle class will more than double to 400 million by 2020, as predicted by the Organization for Economic Cooperation and Development. That spells huge opportunity for automakers in Thailand.

Thailand excels at making commercial vehicles — specifically, the one-ton pickup truck, such as the Chevrolet Colorado and the Ford Ranger. Thailand is the world’s second-biggest market for pickups, after the United States. Much of the country is rural, and pickups serve as economical vehicles for large families, with children often sitting in the open-air back.

GM only makes two vehicles in Thailand: the Colorado and the Chevy Trailblazer SUV. It said that pickups represent 42% of the market share in Thailand.

“Since 2000, GM has invested more than $2 billion in the manufacturing facilities in Rayong,” a GM spokesman said. “We continue to invest in Thailand through our dealers, products and services.”

Thailand produced 1.2 million commercial vehicles compared to 818,000 cars in 2017. Conversely, growing producer Indonesia made just 234,000 commercial vehicles but 982,000 cars. Still, in the first five months of 2018, overall car sales in Thailand grew by 18%. A spokesperson for Mercedes-Benz, which makes only passenger cars in Thailand, said the company had its biggest year ever in 2017, with 14,000 units sold.

What’s on the Horizon?

To help ensure that wheels keep turning in the future, the government wants to attract eco-friendly and electric car production to Thailand, as part of its ambitious new $45 billion project approved in February, known as the Eastern Economic Corridor.

It comprises numerous trade and development initiatives to further boost its industrial epicenter in Rayong and surrounding provinces. Thailand will continue to provide tax breaks and fast-track visas to investors, as well as the ability to rent land for up to 99 years.

The Federal Thailand Investment Board predicts the country will produce 3 million autos in 2020, which would propel it into 8th place in global production.

But political uncertainty has unsettled investors, notes Josh Kurlantzick, senior fellow for Southeast Asia at the Council on Foreign Relations. Coups in 2006 and 2014 rattled automakers.

“Years of political strife has undercut its appeal,” Kurlantzick said.

Competition from neighboring nations is also growing, though Thailand’s outlook remains bright.

“Indonesia’s domestic automotive market has seen steady growth in recent years but still lags behind Thailand in both volume and supply chain sophistication,” Brown said.

by Talib Visram – CNN

Follow Talib on Twitter

Automotive

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

Published

4 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.

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

4 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.

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

4 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.

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