Automotive

Mitsubishi Mirage First U.S.Bound Vehicle From Thailand

Published

11 years ago

October 14, 2013

Bchcomber

Mitsubishi Mirage hatchbacks are loaded onto a transport ship for export to the United States

Contents

One-Fifth the Cost ‘Land to Expand’

LAEM CHABANG – At this gleaming, barely year-old Mitsubishi assembly plant, it’s the little things that say you’re in Thailand and not Toyota City or Tennessee.

There’s the errant sparrow inside the new cafeteria, apparently trying to nest in an air duct. There are the conspicuous loose and wobbly faucets in the new worker washroom.

Don’t forget the copious curtains of sparks showering clear across the factory aisles. The dearth of robots. Or the legions of workers swarming the line, especially in quality control.

Mitsubishi Motors Corp.’s newest factory may be a little rough around the edges. But it is doing something never done before. It just started exporting vehicles from this hot, humid, sometimes chaotic Southeast Asian emerging market to the United States.

It may be followed by other rivals, as automakers pump up production capacity here and Thai leaders seek to emulate Japan’s export-based growth model of past decades.

Mitsubishi President Osamu Masuko, desperate to cut costs and boost beleaguered U.S. sales, is betting that American customers will like their first taste of Thai-made autos.

The maiden shipment of 1,074 Mitsubishi Mirage subcompact hatchbacks set sail from Laem Chabang port, just south of Bangkok, on Aug. 27. The pint-sized 1.2-liter three-bangers, in a palette of colors such as powder puff magenta and Key lime green, hit U.S. showrooms last month.

Mitsubishi is projecting a scant 7,200 annual U.S. sales for the Mirage. But competitors will be watching the budget-priced hatchback as Thailand blossoms from a regional manufacturing hub into a global auto exporter. Rivals, including Ford, General Motors, Toyota, Nissan and even BMW are adding Thai output to tap Southeast Asia’s booming economy and to free production capacity elsewhere.

That makes it likely that more Thai-made cars will cross the ocean, especially if the proposed Trans-Pacific Partnership free trade pact eventually opens tariff-free trade between Thailand and other nations, including the United States.

Thailand already exports to Japan and Europe, trading on its low costs, government incentives and liberal trade agreements.

In 1995, the country exported barely 8,800 vehicles. Last year, it shipped just over 1 million.

The Thailand-made Mirage is a revived nameplate that succeeds the Mitsubishi Colt small car, previously made in Japan. Mitsubishi decided to move global production offshore, even for Mirages bound for Japan. Meanwhile, Ford will reportedly shift Fiesta small-car production from Mexico to Thailand in 2016, possibly signaling more Thai-made imports to the United States down the road.

Turning to Thailand carries risks. Chief among them is quality. The 14 auto assemblers in Thailand churned out 2.45 million vehicles last year, making it the ninth-largest producer in the world, just behind Mexico and ahead of Canada. But it’s mostly a young industry with a young, inexperienced work force.

Mitsubishi executives, only half-jokingly, say they rescheduled their local factory’s daily flag-raising and national-anthem ceremony so that the compulsively patriotic but not so compulsively punctual Thai workers would show up on time.

“Back in 2001, so many workers came late,” says plant Senior Vice President Yasuhisa Yamamoto, who previously worked at Mitsubishi’s assembly plant in Normal, Ill. “So Japanese members decided to set the exercise time before 8:00. Then at 8:00 the national anthem starts … It’s much better than before.”

J.D. Power and Associates’ country-by-country Initial Quality Study, which measures problems reported by owners in the first nine months of ownership, suggests Thailand still trails in quality.

In the latest studies, Japan’s industry average was 100 problems reported per 100 cars. The Thai average was 116.

J.D. Power said that small cars such as the Mirage fared the worst in Thailand’s study, averaging 132 problems per 100 vehicles. Thai respondents complained about noisy brakes, air conditioner problems and transmission concerns. Still, Thailand’s clichéd mai pen rai mentality — a catchphrase encapsulating the local “no worries” way of life — has taken a back seat as the country rides to prosperity.

Mitsubishi’s new plant opened in March 2012, with capacity of 200,000 units a year.

Combined with two existing plants nearby, Mitsubishi’s Laem Chabang complex is its biggest manufacturing hub in the world, capable of churning out 510,000 units a year. During the fiscal year ended March 31, it produced 394,000 vehicles, excluding vehicles made for other companies.

Part of the quality equation goes: If the cars are good enough for fickle Japanese, they must be good enough for Americans. As Mitsunori Kitao, COO of Mitsubishi Motors Thailand Co., puts it, Americans “aren’t picky; their sense is different.”

In a strategy known as “reverse importing,” Nissan pioneered the importing of Thai-built cars to Japan — starting with the March compact in 2010. Mitsubishi followed by shipping Thailand-made Mirages back to Japan in 2012.

But those cars get exceptional attention.

A special “double-check” subline awaits all Japan-bound cars, while those bound for local markets are shuffled off to the lot. Doting workers preen the vehicles headed to Japan, scan for minor imperfections and buff out any problems that squeaked through.

Initially, even that didn’t satisfy fussy Japanese dealers.

“Our dealers pointed out, especially with the paint quality at the beginning of production, that there was a quality problem because the paint shop was also new,” says Ryujiro Kobashi, U.S. marketing chief for the Mirage. “But after three or four months, there were no complaints. We sent production engineers from Japan to Thailand, and the process was very much improved.”

U.S.-bound cars get this velvet treatment, too — at least for the time being. After six months of working out any kinks, Mitsubishi intends to drop the extra screening for them.

Japan-bound reimports, however, will get vetted indefinitely.

Mitsubishi is banking on its expertise in exporting from Thailand. Indeed, it was the first automaker to do so, in 1988.

The first vehicle was the Lancer Champ, sent to Canada but not the United States. Shipments to North America ended in 1993.

Today, Mitsubishi’s Thailand operations send vehicles — especially pickups — to about 140 countries.

Automakers are flocking to Thailand.

Since 2010, Toyota, Ford, Suzuki, Nissan and Honda have announced plans to either build new factories or expand existing ones. BMW has started making the Mini Countryman here and China’s SAIC Motor Corp. is building an assembly plant to make MG-brand cars for the domestic market and export.

Thai production is skyrocketing. And capacity will grow to just over 3.4 million vehicles a year by 2015, predicts the Thailand Automotive Institute, a government-affiliated foundation that promotes the local industry.

About 40 percent of Thailand’s output is exported.

The bias is spurred partly by government policy that aspires toward replicating Japan’s export-led economic miracle.

“The Thailand market is very small, and we cannot absorb all the production volume we have,” said Tasana Piriyaprut, vice president of the government-affiliated Thailand Automotive Institute. “We are aiming for exports to other countries.”

By 2020, Toyota will remain the biggest local producer with projected output of some 884,000 units, according to IHS Automotive. Mitsubishi will be No. 2 with 457,000 units.

But Ford, GM, Honda, Isuzu and Nissan will each be churning out more than 100,000 units. And new entrants from China, including SAIC, Dongfeng and Great Wall, are expected to join the mix.

“We are a global production base, and our auto industry can match any quality standard,” said Ajarin Pattanapanchai, a senior executive investment adviser at Thailand’s Board of Investment. “The opportunity to grow is still very strong.”

Low labor costs mean less automation and more staff at Mitsubishi’s plant in Laem Chabang, Thailand.

One-Fifth the Cost

Cheap labor is part of the allure. Mitsubishi reckons Thai labor costs about one-fifth as much as it does in Japan.

Wages are about a third of the level in South Korea and even lower than in China, says the Thailand Board of Investment.

That’s why assembly lines are so labor intensive.

At Mitsubishi’s plants in Japan, robots do about 90 percent of the welding. In Thailand, 40 percent. Quality assurance gets about 32 in-line inspectors, compared with around 10 in Japan.

Because Thai operations aren’t as automated, the pace of work is slower and the workload about 25 percent lighter than in the United States, estimates Kenneth Minielly, president of AutoAlliance Thailand Co., the joint venture Ford established with Mazda in 1995.

“The jobs are set up in North America and Japan more efficiently than here,” Minielly said. “And again what drives that is cost. And that takes time to instill that kind of productivity.”

He likened AutoAlliance Thailand to a Ford plant in the United States “four decades ago.” Yet, Ford’s rapid expansion in Thailand and its recent construction of a new plant there show how automakers are turning the country into an export engine.

AutoAlliance Thailand is just an hour drive inland from Mitsubishi’s factory. It lies in an industrial park bristling with plants operated by GM, BMW, Suzuki and myriad suppliers.

Ford opened its second plant — this time all its own — in May 2012 just down the road from AutoAlliance Thailand. That factory has initial capacity for 150,000 units. But there’s plenty of room to grow.

At the port of Laem Chabang, Thai-built vehicles await export. Thai production is surging as the government seeks to maximize exports.

‘Land to Expand’

Capacity at the new plant, Ford Thailand Manufacturing, could be expanded to around 300,000. And Ford just bought a huge tract next door to store export vehicles, plant director Trevor Negus said. “We’ve got enough land to expand substantially,” he said.

Already, 80 percent of its output is exported.

It makes the Focus small car for Thailand, Indonesia, Malaysia and the Philippines. But it also ships far beyond the region, to Australia, New Zealand, Japan and South Africa. It will soon add the EcoSport small crossover.

First and foremost, Ford’s Thailand operations feed the surging growth in Asia Pacific, says Matt Bradley, president of Ford’s operations in Southeast Asia. He watches over the flourishing Association of Southeast Asian Nations region that encompasses Thailand and nine other countries and accounts for nearly 10 percent of the world’s population.

ASEAN light-vehicle sales will surge 40 percent to 4.6 million units in 2020, from an expected 3.29 million this year, forecasts LMC Automotive. Regional production is expected to climb 53 percent to 6.41 million vehicles in that time.

ASEAN ascending

Light-vehicle sales
	2012	2013*	2020*
Thailand	1,402,804	1,272,843	1,507,750
Indonesia	1,013,206	1,088,735	1,846,181
Malaysia	624,111	633,824	798,881
Philippines	180,908	199,721	237,918
Vietnam	81,779	98,680	207,572
Total	3,302,808	3,293,803	4,598,302

Light-vehicle production

	2012	2013*	2020*
Thailand	2,259,097	2,439,191	3,687,207
Indonesia	963,651	1,101,753	1,885,759
Malaysia	566,343	588,104	750,193
Philippines	73,272	74,145	87,758
Total	3,862,363	4,203,193	6,410,917
*Projection Source: LMC Automotive

Ford’s Bradley: Southeast Asia is main target.

In May, The Detroit News reported Ford plans to shift Fiesta production to Thailand from Cuautitlan, Mexico, where Ford built 138,450 Fiestas in 2012. Ford also builds the Fiesta in nine other plants. Ford officials declined to comment on the story. And Bradley dismissed suggestions Ford might reimport the car to the United States, saying it wasn’t under study

Yet some analysts see a case for it.

“It is possible over the longer term that Ford may want to utilize its capacity at the plant, and exporting the Fiesta back to the U.S. might be a possibility,” said Ammar Master, manager for Southeast Asia markets at LMC Automotive. “They may look to capitalize on the low cost base in emerging markets.”

The Fiesta is already made at AutoAlliance Thailand. Last year, the car was Ford Thailand’s best selling nameplate, with sales of 28,645 units.

Bradley said that Ford’s factories here are ready to compete on the global field, thanks to the company’s One Ford global product strategy and its adoption of flexible assembly plants.

“Certainly we could export beyond ASEAN as we do today, if needed,” Bradley said. And he certainly doesn’t see any reason why a Thailand-made car couldn’t succeed in the United States or any other market.

“There’s not as much relevance to where the car’s built,” he says. “There’s much more relevance to what the car delivers.”

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.

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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

7 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.

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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