INVESTMENT OPPORTUNITIES IN THAILAND: AUTOMOTIVES Thailand Board - PowerPoint PPT Presentation

INVESTMENT OPPORTUNITIES IN THAILAND: AUTOMOTIVES Thailand Board of Investment Mr. Vittaya Praisuwan Executive Investment Advisor September 2006 1 1

Thailand: Geared for Excellence Building the Automotive Hub of Asia • Detroit of Asia & investment opportunities • BOI incentives for auto investments 2 2

Investment Opportunities Investment Opportunities in the Detroit of Asia in the Detroit of Asia 3 3

Thailand Auto Facts Thailand Auto Facts • Auto sector: 12% of GDP • World’s 2nd largest consumer, producer of pickup trucks (after U.S.) • Largest auto producer in Southeast Asia, expanding at a rate of 24% in 2004 4 4

Auto Exports & Imports 2004 Auto Exports & Imports 2004 Value Value Top 10 Exports Value Top 10 Imports Value Top 10 Exports US Mil. US Mil. US US Mil. Mil. 1 Crude Oil 10,214 1 Computers & 8,855 1 10,214 1 8,855 components 2 Elect. Machinery, Parts 9,041 2 9,041 2 Autos & parts 5,408 2 5,408 3 Industrial Machinery 9,001 3 9,001 3 3 Integrated circuits 4,735 4,735 4 Chemicals 7,731 4 7,731 4 Rubber 3,267 4 3,267 5 Integrated Circuits 7,004 5 7,004 5 Radios, TVs 3,074 5 3,074 6 Iron and Steel 5,550 6 5,550 6 6 Plastic pellets 2,982 2,982 7 Computers, Parts, 4,619 7 4,619 7 Garments 2,944 Accessories 7 2,944 8 Metal Manufactures 3,268 8 Rice 2,565 8 3,268 8 2,565 9 Gems and jewelry 2,520 9 2,520 9 Jewelry, Silver Bars, Gold 2,840 9 2,840 10 10 Iron and steel 2,396 2,396 10 Auto Parts & Accessories 2,704 10 2,704 5 5

Automotive Industry in Thailand Automotive Industry in Thailand Thousand Units 1,200,000 Production Domestic Export 1,125 1,000,000 Ave. Growth 35% per year Ave. Growth 35% per year 928 (1998 – – 2005) 2005) (1998 800,000 750 703 589 584 571 626 600,000 485 459 559 525 533 411 440 389 409 434 400,000 327 363 332 296 158 262 233 200,000 180 175 218 152 130 144 66 42 21 14 8 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 6 6

Production Capacity in 2004 / 2005 Production Capacity in 2004 / 2005 1 TON P/U Company PC CV TOTAL 1.TOYOTA 126,000 170,000 38,000 334,000 2.MITSUBISHI 50,000 100,000 20,200 170,200 3.ISUZU - 150,000 20,000 170,000 4. AUTO ALLIANCE 2,700 132,300 - 135,000 (Ford& Mazda) 5.HONDA 120,000 - - 120,000 6.NISSAN 33,200 66,400 2,400 102,000 7.GENERAL MOTOR 60,000 40,000 - 100,000 8.HINO - - 28,800 28,800 9.DAIMLERCHRYSLER 16,300 - - 16,300 10.YMC Assembly 12,000 - - 12,000 11.BMW. 10,000 - - 10,000 12.VOLVO 10,000 - - 10,000 TOTAL 440,200 658,700 109,400 1,208,300 7 7

Automobile Production Capacity Plan Automobile Production Capacity Plan 2004- -2007 2007 2004 Capacity 2004 Capacity 2007 Increase Toyota 300,000 500,000 66.7% Nissan 143,900 200,000 40.0% Isuzu 140,000 200,000 42.9% Ford/Mazda 135,000 200,000 48.1% Mitsubishi 126,000 200,000 58.7% Honda 120,000 220,000 83.3% General Motors 110,000 150,000 36.4% Bangchan 20,000 20,000 0.0% Thonburi 19,500 19,500 0.0% Yontrakij 12,000 12,000 0.0% BMW 10,000 10,000 0.0% Hino 9,600 9,600 0.0% Volvo 6,000 6,000 0.0% Total 1,152,000 1,747,100 51.7% 8 8

World Production World Production in 2005 in 2005 Target: Country NO. Production Detroit of Asia U.S.A. 1 11,962,152 JAPAN 2 10,729,531 Become a TOP 10 auto GERMANY 3 5,758,710 CHINA 4 5,708,421 producer by year 2010 FRANCE 5 3,628,613 BRASIL 6 2,781,714 SPAIN 2,748,226 7 Produce 2,000,000 CANADA 8 2,693,901 units/yr, >50% for KOREA 9 2,539,865 export ENGLAND 10 1,797,773 MEXICO 11 1,669,563 INDIA 12 1,642,070 RUSSIA 13 1,340,940 THAILAND 14 1,125,316 ITALY 15 1,032,481 9 9

Samples of New 2005 Investments Samples of New 2005 Investments NISSAN HONDA TOYOTA $1 billion investment to Doubling engine Doubling capacity to increase capacity: production 550,000 units/yr by 2007 - Auto parts $1.2 billion to produce Increasing production - Plastic parts 100,000 pickups & SUVs, of engine blocks and - Car body parts sets 224,550 autos, 14 million cylinder heads to - Transmissions auto parts. 300,000/yr (70% for - Diesel and benzene engines export to Asia) $2.2 billion worth of steel, components, electronic Expanding production to parts to be sourced locally 200,000 units/yr from 130,000. HINO By 2008, 10 new models to be introduced to Thailand, most GM Expanding capacity, assembled locally making Thailand its $66 million paint unit in production base for Rayong Asia and Oceania MAZDA Auto production to increase By 2010 will triple to 160,000 units/yr from trucks and buses to Establishing Thailand its 110,000 30,000 units regional ASEAN HQ and export Thailand established as 10 10 hub for parts for light trucks hub for Asia

2005 Auto&Parts Export Value Up 2005 Auto&Parts Export Value Up 46% 46% Company Value # units Increase Total Exports 1 Toyota $ 1,751 151,824 188% $7.4 billion million 2 Mitsubishi $ 930 88,152 0.1% million - 440,715 autos 3 Auto $ 751 77,551 5% Alliance million ($ 5.1 billion) Thailand - Components 4 Honda $ 530 45,216 1.5% million ($ 2.3 billion) 5 GM $ 544 33,836 -25% million 11 11

Targets for Detroit of Asia: Targets for Detroit of Asia: th of the World To be the 10 10 th of the World by 2010 by 2010 To be the SHORT TERM LONG TERM (2006) (2010) 1,000,000 Units 1,800,000 Units VEHICLES -Export 40% -Export 40% -Domestic 60% -Domestic 60% MOTOCYCLES 5,000,000 Units 2005, Achieved -Export 40% 1,125,316 Units -Domestic 60% 1 Year Earlier 200 Billion Baht AUTO PARTS -Export 100% Source: Federation of Thai Industries 12 12

Auto part Suppliers Auto part Suppliers • 1,709 part suppliers operating – 709 OEM part suppliers • 386 makers for automobile • 201 makers for motorcycle • 122 makers for both automobile and motorcycle – 1,000 suppliers for supporting industry & raw materials (mould & die, heat treatment, forging, casting, painting, plastic, rubber etc.) 13 13

Markets Ratio & Local Content Ratio Markets Ratio & Local Content Ratio P/U Ratio = 58% P/U Ratio = 58% Local Content = 80-90% Local Content = 80-90% P/C Ratio = 33% P/C Ratio = 33% Local Content = 30-70% Local Content = 30-70% 14 14

Opportunities: Opportunities: Components not Sufficiently Components not Sufficiently Produced in Thailand Produced in Thailand • Passenger Car Engines • Fuel Injection Pumps * • Transmissions * • Differential Gears • Injection Nozzles * • Electronic Systems • Electronic Control Units* • Turbo Chargers * • Substrates for Catalytic converters • Anti-Lock Brake Systems *Current manufacturers not meeting demand 15 15

Auto & Electrical/Electronics Sectors Investment Opportunities: Investment Opportunities: Mould & Dies / Precision Engineering Mould & Dies / Precision Engineering • Few producers of mould and dies currently in Thailand (high reliance on imports) • Mould & Dies essential for further development of auto and electrical/electronics clusters • Manufacturers being forced to do own precision engineering, mould & dies to meet customer demands and delivery times. This is very expensive. • BOI responding to industry requests to increase incentives and promotions 16 16