Country will be among world's Top-10 producers: TAIA chief

She was first elected as TAIA president in early 2010, succeeding Toyota Motor Thailand vice president Suparat Sirisuwannangkura.

It is interesting that Piangjai is the first female president of the TAIA in its 29-year history. She is also expected to run for presidency of the AAF (Asean Automotive Federation) that will convene later this year.

This will help build a strong foundation for Thailand before it becomes part of the Asean Economic Community in 2015 as well as pave the way for the country to be among the world’s top 10 auto-makers in the near future.

The Nation talks to Piangjai about her views on the Thai auto industry.

 

THE SCENARIO

“In 2011 we couldn’t do much, considering that the Thai auto industry was hit twice by major natural disasters – the tsunami in Japan and the massive flood in Thailand. This cost our auto industry as many as 300,000 vehicles worth more than Bt100 billion, not counting the other damages. However, everything is slowly getting back on track with auto-makers renovating their assembly plants and resuming production. That’s why this year will be an outstanding year, especially compared to last year when production dropped to just 1.49 million vehicles [800,000 for the domestic market].”

 

2012 SITUATION 

“I said this would be an outstanding year because after facing various crises during the past year, every single auto-maker could not afford to stay still. Each began trying their best to return to normal production. So during the first quarter of the year auto-makers were able to return to normal production, and now things are clearer as many new models have been launched at regular intervals. In particular, there are eco-car models from Suzuki and Mitsubishi that are creating a strong trend in the market, as well as other models along with the government’s First Car Buyer Programme.

“The TAIA recently raised its auto production forecast to 2.2 million vehicles, up from the original 2.1-million projection announced in early 2012. This shows the activeness of the domestic as well as export markets this year. Production will be equally divided for these two markets.”

 

FIRST CAR PROGRAMME

“The announcement by Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong has led the public sector to ask the government to clarify whether it will extend the First Car Buyer Programme. We had earlier unofficially discussed the matter with the Excise Department and told them we wanted the programme extended for 3-6 months because of the flood crisis in 2011. The department said it would not extend the programme but would allow deliveries three months passed the deadline for brands that are unable to deliver vehicles right away. So if customers place orders in December, they would have the vehicle delivered during the first three months of 2013 and still enjoy tax returns. However, we will take a look at this issue again by the year-end, although everything should proceed as planned. The Excise Department and the public sector has agreed that approximately 400,000 vehicles will come under the programme, which is close to the initial 500,000-vehicle target.”

 

WILL THE PROGRAMME AFFECT 

2013 MARKETING PLANS?

“We must admit that this is a project that would stimulate future demand and not just this year. People are speeding up auto purchases, so although the market may be very good this year, auto-makers must plan harder, check the future scenario, and act accordingly.

“However, after the end of this year, true demand will return and Thailand will still have much room for growth since the auto ownership ratio here is still low.”

 

PRESENT AND FUTURE 

INVESTMENT SCENARIOS

“Although there have been numerous investments by auto-makers totalling as much as Bt500 billion in the past 50 years, there is more room for investment, especially in expanding existing projects for both auto and parts production.

“While Japanese companies face the risk of natural disasters and strengthening of the yen [both uncontrollable factors], they need to lower their risks by looking for new production venues. And Thailand is a country that is attractive for landing investments. But I want to stress that this attractiveness depends on the Thai government’s long-term plan to strengthen investor confidence. Initially, we think that as much as Bt100 billion will be invested.”

URGENT POLICIES

“As we all know, the third ‘champion product’ for Thailand will be low CO2-emitting vehicles – hybrid and full-electric vehicles. Production of these types of vehicles will keep Thailand firmly in the world automotive orbit. We are presently a major pickup truck and eco-car manufacturer, but we must also prepare ourselves to minimise risk. In order for the parts industry to develop along with the auto industry, the government should be aware of the scenario and prepare the country for more investment. We should not walk too fast, but at the same time if we do nothing the country will lose its momentum.

“We recently met with the Senate sub-committee on science and technology and talked about the time needed for Thailand to produce electric cars. Participants were from both government and private sectors, including the Energy Ministry, PTT, Egat, the PEA and the MEA, and everyone was very excited, except the Energy Ministry has not included this project in its 15-20 year master plan. But there should be a good way out if we meet more often. It is up to the government how it wants to move ahead, but right now nothing is clear. Indonesia and Malaysia have already started with the 0% import duty for auto companies bringing in vehicles for research and development. So if the Thai government wants to maintain this industry’s momentum, it needs to speed up the project. Thinking positively, we’ll be driving electric cars in no more than five years.”

 

AUTO INDUSTRY’s FUTURE

“In 2020, global auto production is expected to reach 130 million vehicles per year, and although it would be difficult to predict how much of this will come from Thailand, it should be at least 3 million vehicles per year. At this point, no auto-maker would want to move out of the country, although they have the chance to look at other markets as well. After all, Thailand, as the centre of auto production in Asean, is one of the strongest choices.

“The Asean Economic Community (AEC) will give Thailand, which is the largest auto production base in the region, more advantages than other members. The AEC will spark a sharp rise in Thailand’s domestic and export markets, more than any other Asean 

country. And the auto parts industry will grow accordingly because we have a strong 

industry as well as high use 

of local content.

“The Thai auto industry will be at least five years ahead of other Asean nations, and whether it is in the next 2-3 years or in 2020, we would still be the number one auto producer in Asean. According to our plans, we will produce 2.5 million vehicles per year in the next few years and become one of the world’s top 10 auto producers.”