AutomotiveAutomotive InnovationInnovation ForumForum AsiaAsia 20072007 ThailandThailand Ms. Sudjit Inthaiwong Deputy Secretary Geneal Thailand Board of Investment Bangkok, 2007 1 AA CompetitiveCompetitive LocationLocation ThailandThailand ForefrontForefront forfor investmentinvestment World Bank Ease of Doing Business, Thailand ranks #18 in the world UNCTAD Global Investment Prospects Assessment, FDI prospects in Asia 2005 – 2008: Thailand ranks #3 JBIC 2006 Survey on promising countries for overseas business operations over next 3 years: Thailand ranks #4 JBIC 2006 Survey on promising countries for SMEs over next 3 years: Thailand ranks #4 Grant Thornton International Business Owners Survey 2006:“Thailand’s assets include an entrepreneurial population, abundant natural resources and a wonderful lifestyle and, if these strengths are promoted and supported, the country will continue to be a great place to do business” JBICJBIC FYFY 20062006 SurveySurvey When asked about profitability for each region, including Japan, “the percentage of companies answering “higher” was greatest for Thailand” Automotives, “strengthen or expand” response stronger in Thailand than any other region, including southern China and North America. JBICJBIC Survey:Survey: CompaniesCompanies LookingLooking toto StrengthenStrengthen oror ExpandExpand inin ASEANASEAN--44 250 238 200 150 Thailand Vietnam 118102 Indonesia 100 86 Malaysia 55 Philippines 50 50 33 31 22 12 24 10 15 105 0 All Industries E&E Automobile Source: JBIC 18th Annual Survey Report on Overseas Operations by Japanese Manufacturing Companies ComparisonComparison ofof LandLand andand OfficeOffice PricesPrices Bangkok Beijing Hanoi Jakarta Kuala Manila Singapore Lumpur Industrial 61.60 57 - 70 No Land 40 – 45 5.5 -11 45 - 50 79.54 - Estate Purchase 241.82 Purchase Rate (per sq/m) Monthly 5.2 - 5.5 6 - 9 0.16 - 4.1 – 4.6 --- 1 5.40 - Industrial 0.23 13.64 Estate Rents (per sq/m) Office Rent 13.69 39 - 45 22 - 45 23 – 26 10.36 - 7.02 – 22 - 83 (per sq/m) 15.11 8.03 Monthly 1,779 2,300 – 3,200 1,850 – 879 – 1,404 – 1,924 – Housing for 6,000 2,100 1,236 1,605 3,849 Foreigners Source: JETRO 17th Survey of Investment-Related Cost Comparison in Major Cities and Regions in Asia; prices are in US dollars AA CostCost--EffectiveEffective WorkforceWorkforce ThailandThailand ThaiThai LaborLabor ForceForce Average Thai person works 2,184 hours/year, ranked #9 out of 55 countries surveyed Thailand ranks as the number 6th country of those surveyed for pro- business regulations(including minimum wage, hiring/firing practices) Source: IMD World Competitiveness Yearbook, 2005 Average Monthly Wages Source ) 2000 : JETRO Survey, March General Industry Wage (in US$ 1500 1000 500 0 Mid-Level Engineer Bangkok 2007, based on top figure in average range Bangalore Beijing Mid-Level Manager Hanoi Manila Jakarta Kuala Lampur IncreasingIncreasing LaborLabor ProductivityProductivity 250,000 Baht/year 200,000 150,000 100,000 50,000 0 2001 2002 2003 2004 2005 Source: Ministry of Labor HumanHuman ResourceResource DevelopmentDevelopment About 80,000 Students Graduated Annually in Science and Engineering Comprehensive training and R&D for specific high-tech sectors, e.g. National Science Park in electronics, material science, bio- technology, and nanotechnology HDD Cluster Development Program Thailand – Japan Institute of Technology ThaiThai GraduatesGraduates inin Science,Science, Technology,Technology, andand EngineeringEngineering 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 2004 2005 2006 2007 2008 2009 2010 Source: Commission on Higher Education; includes BA, MA, and post-graduate degrees AA WellWell--DevelopedDeveloped InfrastructureInfrastructure ThailandThailand LowLow incidenceincidence ofof PowerPower OutagesOutages Percent of Production Lost Due to Power Outages India Philippines Indonesia Brazil China Thailand Malaysia 0246810 Source: World Bank WaterWater SupplySupply onon EasternEastern SeaboardSeaboard Source: Eastern Water Resource Development and Management EconomicEconomic Gateway:Gateway: RegionalRegional NetworkNetwork South Asia Japan, China, Pacific, USA,... West Gateway Middle East, Europe, … Laem Chabang Port:max capacity 18 TEUs Source: NESDB Rank: 12nd in the world AirportAirport DevelopmentDevelopment asas GatewayGateway ofof SoutheastSoutheast AsiaAsia Source: NESDB Auto & Auto Parts Industries Thailand: Automotive Hub of Asia AsiaAsia--PacificPacific VehicleVehicle ProductionProduction CapacityCapacity 20052005--20102010 Million Units 8.00 7.00 6.00 5.00 4.00 2005 3.00 2008 2.00 2010 1.00 0.00 AutomobileAutomobile ForecastForecast 20072007 Increase from last year 92,000 Units ProductionProduction Growth ~ 7.7% 1,280,000 Units DomesticDomestic SaleSale Increase from last year 18,000 Units 700,000 Units Growth ~2.6% ExportExport SaleSale Increase from last year 67,000 Units 605,000 Units Growth ~12.5% AUTOMOTIVEAUTOMOTIVE CLUSTERCLUSTER Automotive Manufacturer Location Pathumthani Ayudhaya Thai Suzuki Motor Honda Automobile Chachoengsao (Thailand) Toyota Motor Thailand Isuzu Motors (Thailand) Bangkok Samutprakarn Bangchan General Assembly Toyota Motor Thailand Y.M.C. Assembly Isuzu Motors (Thailand) Thai Honda Manufacturing Siam Nissan Automobile Siam V.M.C. Automobile Thai Auto Work Rayong Millennium Motors Auto Alliance (Thailand) Thai Yamaha Motor General Motors (Thailand) Thai Swedish Assembly BMW Manufacturing (Thailand) Hino Motors (Thailand) Kawasaki Motors Enterprise Samutsakorn Thonburi Automotive (Thailand) Thai Rung Union Car Assembly MMC Sittipol PrincipalPrincipal AutoAuto PartsParts ProductionProduction SitesSites Pathumthani Total suppliers: 39 Body Parts: 18%, Engine Parts; Electrical Parts: 13% each, Suspension & Brake Parts: Rayong 10%, Drive, Transmission &Steering Parts; Total suppliers: 41 Accessories: 8% each, Other: 31% Body Parts: 24%, Engine Parts; Drive, Transmission &Steering Parts: 15% each, Bangkok Suspension & Brake Parts: 12%, Electrical Parts: 10%, Accessories: 7%, Total suppliers: 232 Mold&Die: 2%, Other: 15% Body Parts: 9%, Engine Parts; Electrical Parts; Drive, Transmission &Steering Parts; Accessories: 6% each, Suspension & Brake Parts: 4%, Mold&Die: 3%, Other: 60% Chonburi Samutprakarn Total suppliers: 55 Total suppliers: 158 Body Parts: 25%, Engine Parts: 22%, Body Parts: 22%, Electrical Parts: 15%, Drive, Transmission &Steering Parts: Engine Parts; Drive, Transmission 15%, Electrical Parts: 9%, Accessories: &Steering Parts: 8% each, Suspension & 5%, Suspension & Brake Parts: 4%, Brake Parts: 5%, Mold&Die: 4%, Mold&Die: 4%, Other: 16% Accessories: 3%, Other: 36% AutomotiveAutomotive HubHub ofof ASEANASEAN 14 assemblers from Japan, US, and Europe Exports to 140 countries Largest domestic pickup market in the world after the US More than 700 first-tier suppliers 1,100 second and third-tier suppliers 2006 motorcycle production – more than 3.5 million units Thailand:Thailand: AutomotiveAutomotive HubHub ofof ASEANASEAN 2006 production ~ 1,176,840 million units 2006 export ~ 539,206 units 15 assembly plants Largest in Southeast Asia Capacity of 2.0 million units by 2010 Production of pickup trucks ~ 877,890 units – world’s largest one-ton pick-up truck manufacturer MajorMajor AutoAuto AssemblyAssembly ProductionProduction CapacityCapacity Company 2006 Total Toyota 450,000 Isuzu 200,000 Mitsubishi 208,000 Auto Alliance (Ford/Mazda) 155,000 Honda 120,000 General Motors 160,000 Nissan 134,400 Hino 28,800 DaimlerChrysler(2006) Others (2007) 16,300 YMC Assembly 12,000 BMW 10,000 Volvo 10,000 Total 2006 1,576,500 Projected total for 2007 1,627,710 800,000 Automotive Sales and Exports s 700,000 600,000 500,000 400,000 300,000 Domestic Sales (Unit 200,000 100,000 Domestic Sales Exports 0 1991 1992 1993 1994 600,000 1995 1996 1997 500,000 1998 1999 400,000 2000 2001 300,000 2002 ) 2003 200,000 2004 2005 100,000 2006 0 Exports (Units AutomotiveAutomotive ElectronicsElectronics Thailand’s 2006 auto electronics and parts industry valued at US$7 billion. Goal of becoming world-class auto electronics parts production center within 2011, with production to increase in value by US$1.4 billion. Omron Automotive Electronics Pioneer Electronics Summit Electronic Components Kyushu Matsushita Electronics Panasonic Automotive Systems NewNew EcoEco--CarCar PromotionPromotion New import and corporate tax waivers (up to 8 years, regardless of zone) to develop smaller, more fuel efficient cars No more than 5 litres/100 km Emissions compliant with Euro4 specification or higher 9 Carbon dioxide emissions no more than 120 gm/km Full front and side impact protection based on UNECE specifications Investment applications starting March 2007 GeneralGeneral GuidelinesGuidelines forfor EcoEco--carcar IncentivesIncentives Project package must be proposed along with: auto assembly, motor manufacture and motor vehicle parts project, and investment and manufacture plan for 5-yr period must be included, along with actual production quantity of not less than 100k units/yr from the fifth year Qualify on MOI energy saving, environmental and safety specifications SpareSpare AutoAuto PartsParts ExportsExports 6000 Unit: Million Baht 5,026.385,026.38 4000 4,100.74 2,909.43 2,182.00 2000 1,758.56 1,796.41 1,245.65 883.42 505.28 722.79 0 215.44 1996 '97 '98 '99 2000 '01 '02 '03 '04 '05 '06 VehicleVehicle JigJig && DieDie ExportsExports Unit: Million Baht 1000 800 797.48 683.42 690.37 600 400 200 171.53 141.35 119.96 141.19 145.26 43.66 56.34 63.7 0 1996 '97 '98 '99 2000 '01 '02