investment opportunities in auto sector in · pdf file12 manufactures brand capacity future...
TRANSCRIPT
Investment Opportunities in
Auto Sector in Thailand
Mr. Chokedee KaewsangDeputy Secretary General
Thailand Board of Investment
• Current Status and Trend of Thailand
Automotive Industry
• Thailand’s Human Resource Development in
Automotive Industry
• Investment Promotion Policy for Automotive
Industry
Outline
3
Overview of Thailand Automotive Industry
World’s Automotive Production 2013
(Units of production)World’s Production: 87.24 Million (+3.6%)
Thailand : 2.45 Million (+4.3%)
#9 in Worlds’ Automotive Production
#1 in ASEAN for Automotive Production
Source: OICA as of Mars, 2014
Thailand Ranked #12
2014 Automobile Production
0
5000000
10000000
15000000
20000000
25000000 World’s Production: 89.7 Million
(+2.6%)
THAILAND: 1.89 Million (-23.5%)
#12 in Worlds’ Automotive Production
#1 in ASEAN for Automotive Production
2014 No.12
1,880,007 units
Source: OICA as of Mars, 2015
Thailand as Production Hub for All Regions
Asia (32%)
Middle East (24%)
Oceania (21%)
EU (7%)
Africa (4%)
Thailand exports car to the world
Source: Automotive Summit ( TAPMA) as of June 20, 2013
Thailand:
9th largest
automobile
producer in
the world in
2013
Output:
18 assemblers
with a
combined
capacity of 2.8
mil. Units in
2015
Target:
To
manufacture
3,000,000
units in 2017
(2014
produced 1.88
mil.units
exports 1.12
mil.units to
150 countries)
High local
content :
80-90% for
pick-up and
30-70% for
passenger car
Automotive Capacity Getting Stronger
Future Expansion from Eco-car 2
• 9 brands ready to operate Eco-car 2 programs
• Create additional capacity of 1.38 million units
units
Thailand Automotive Industry Growth
559,428389,100
158,130
327,233411,721
459,418584,951
750,512
928,0811,125,316
1,188,0441,287,346
1,394,029
999,378
1,645,304
1,457,795
2,453,717 2,457,057
1,880,007
589,126
363,156144,065
218,330262,189
296,985409,362
533,176626,026
703,405682,161
631,251682,161
548,871
800,357
795,250
1,436,3351,330,672
881,832
14,000 42,20066,700
130,000
152,836175,293180,554239,440322,053
440,715538,962
690,100776,241
535,563
895,831
735,627
1,026,671
1,128,152
1,128,102
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Production Sale Export
Year 2014
Production = 1,880,007 Units -23%
Domestic Sale = 881,832 Units -34%
Export = 1,228,102 Units 0%
Pure
Thai
23 %
SMEs
Foreign
J/V
Foreign
Majority
54 %
LocalSuppliers
Tier 1
LSEs
(Total 709 Companies)Thai
Majority
23 %
[* LSEs : Large Scale Enterprises SMEs : Small & Medium Enterprises]
Source: Thai Autoparts Manufacturers Association, OIE and BOI as of 2014
(18 car companies, 8 motorcycle companies)
100,000 workers
(1,700 Companies)Tier 2,3
Assembler
Structure of Thai Automotive Industry
10
45
0,0
00
wo
rker
s
Strong Cluster &
Supply Chain
Structure
TIE
R 2
& 3 SME (Local
suppliers)
(1,700 companies)
Stamping, plastics, rubber, machining, casting, forging, function, electrical, trimming
TIE
R 1 Vehicle parts
(386 companies)
Vehicle &motorcycle parts (201 companies)
Engines, Drivetrains, Steering, Suspensions, Brake Wheels, Tires, Bodyworks, Interiors, Electronics and Electric systems.
AS
SE
MB
LE
R Passenger & Pick-up (17 companies, 23 factories)
Motorcycle (8 companies, 8 factories)
Vehicles Assemblers (100,000 workers)
Dealer, Service center (200,000 workers)
Parts manufacturers (450,000 workers)
Supporting industries (100,000 workers)
SUPPORTING INDUSTRY
(Machinery, Equipment & Devices, Mold& Die, Jig & Fixture)
SERVICE
INDUSTRY
-Distribution
(W/H)
-Finance
-Testing
-Consulting
-Logistics
-Banking/
Leasing
UPSTREAM INDUSTRY (Steel, Plastics, Rubber, Electronics,
Glass, Textiles, Leather, Chemicals, Oil, Coating, and Galvanized
Metal)
POLICY&
SUPPORTING
BODY
-Government
-Associations/
Institutes
-Universities/
Technical
Colleges
12
Manufactures Brand Capacity Future Expansion
1 Auto Alliance (Thailand) Mazda, Ford 300,000 -
2 BMW Manufacturing (Thailand) BMW/MINI 6,000 -
3 Dongfeng Automobile Dongfeng 5,300 -
4 Ford Motor Company (Thailand) Ford 200,000 -
5 General Motors (Thailand) Chevrolet 160,000 -
6 Hino Motors Manufacturing (Thailand) Hino 25,150 -
7 Honda Automobile (Thailand) Honda 240,000 240,000
8 Isuzu Motors Company (Thailand) Isuzu 220,000 -
9 Mitsubishi Motors (Thailand) Mitsubishi 450,000 -
10 Nissan Motor (Thailand) Nissan 240,000 -
11 SAIC Motor-CP MG 50,000 -
12 Scania (Thailand) Scania 1,000 -
13 Suzuki Motor (Thailand) Suzuki 135,000 -
14 Thonburi Automotive Assembly Plant Mer. Benz 7,000 -
Tata 8,000 -
15 Toyota Motor Thailand Toyota 700,000 -
16 Toyota Autoworks Toyota 18,000 -
17 TC Manufacturing and Assembly Fuso 12,000 -
18 Thai-Swedish Assembly Volvo / UD 21,700 -
Total 2,799,150 3,039,150*
Note *Not include expansion project of Eco-car Phase 2
Capacity of Vehicle Production in Thailand
44. Federal-Mogul47. Michelin50. GKN Driveline
52. Goodyear56. Grupo Antolin58. Bayer59. TI Automotive65. Draexlmaier67. American Axle73. Rieter Auto.84. F-Tech86. Hayes Lammerz93. 3M
13
2. Denso4. Aisin Seiki13. Yazaki15. Sumitomo16. Toyota Boshoku18. Calsonic Kansei19. JTEKT20. Hitachi28. Toyoda Gosei33. NTN34. NSK35. Mitsubishi39. NHK Spring40. Koito41. TS Tech43. Takata
46. Bridgestone
49. Tokai Rika
57. Showa
61. Mitsuba
66. Asahi Glass
72. Stanley
74. Akebono Brake
82. Sanden
84. F-Tech
92. Alpine
94. Pioneer
98. Omron
Japanese Global Suppliers
28/29 Companies 29/71 Companies
Other Global Suppliers1. Robert Bosch3. Continental6. Faurecia7. Johnson Control8. ZF11. TRW12. Delphi14. Lear17. BASF 21. Valeo22. Visteon23. Autoliv25. Mahle27. Dana31. BorgWarner36. Teneco
Top 100 Global Suppliers Active in Thai Automotive Industry
Strength of Thai Automotive Industry
Thai Automotive Industry - OEM Location
Source: Thailand Automotive Institute
RayongBody Parts: 24%,Engine Parts; Drive, Transmission &Steering Parts: 15% each, Suspension & Brake Parts: 12%,Electrical Parts: 10%, Accessories: 7%, Mold&Die: 2%, Other: 15%
SamutprakarnBody Parts: 22%, Electrical Parts: 15%, Engine Parts; Drive, Transmission &Steering Parts: 8% each, Suspension & Brake Parts: 5%, Mold&Die: 4%, Accessories: 3%, Other: 36%
ChonburiBody Parts: 25%,Engine Parts: 22%, Drive, Transmission &Steering Parts: 15%, Electrical Parts: 9%, Accessories: 5%, Suspension & Brake Parts: 4%, Mold&Die: 4%, Other: 16%
BangkokBody Parts: 9%, Engine Parts; Electrical Parts; Drive, Transmission&Steering Parts; Accessories: 6% each, Suspension & Brake Parts: 4%, Mold&Die: 3%, Other: 60%
PathumthaniBody Parts: 18%, Engine Parts; Electrical Parts: 13% each, Suspension & Brake Parts: 10%, Drive, Transmission&Steering Parts; Accessories: 8% each, Other: 31%
Thai Automotive Industry- Auto parts Location
Source: Thailand Automotive Institute
“Great Leap of Next Decade” for ASEAN
Automotive Industry
Relatively low penetration of vehicles
Market expansion due to Rise of Income Growth and Rise of Middle Class
Push to produce small cars by Low Cost Eco Car Policy (Eco Car and Low Cost Green Car Policy)
More market competition due to liberalization under FTAs
Market: 5 million cars by 2020-larger than Japanese market in 2012. Production: Surpass 6 million cars through export growth by 2020.
Growth Factors
of ASEAN
Market
Source: Automotive Summit ( TAPMA) as of June 20, 2013
By 2018, ASEAN will be the 6th Largest Automotive Market Globally
1
2
3
4
5
6
7
8
9
10
17,708,634
11,562,701
3,524,789
3,475,760
3,173,634
2,904,338
2,593,769
2,409,826
2,204,229
1,941,253
SALE 2011Global Rank
29,010,852
16,466,283
5,788,462
5,364,935
4,591,476
3,850,511
3,499,860
3,429,031
2,704,451
2,563,360
SALE 2015F SALE 2018F
33,391,276
16,970,585
9,039,806
6,287,188
4,717,218
4,692,961
4,025,975
3,968,411
2,897,909
2,793,822Source: Frost & Sullivan & ASEAN Automotive Federation
Strong Network in ASEAN and ASEAN+6
Parts Sourcing for ASEAN+ Dialogue Partner
Source: ASEAN Automotive Federation(Automotive Summit 2013) as of June 24, 2013
19
Thailand’s Human Resource Development in
Automotive Industry
Thailand’s Current Human
Resource Status By Skills
Manufacturing 50%
Mechanics 26%
Engineering 7%
Electrical 5%
Electronics 7%
Acct/Admin. 5%
Others 1%
By Job Level
Staff 74%
Technical 7%
Supervisor 7%
Expert 5%
Engineer 4%
Executive 3%
By Education Level
Secondary-High School 50%
Vocational Certificate 15%
Diploma 25%
Degree 10%Source: Auto Summit 2013 (TAI/ Role of HR Development in Automotive Industry) as of
June 28, 2013
Thai monthly wages are competitive
Unit=US$Thailand
(Bangkok)
China
(Beijing)
Vietnam
(Hanoi)
Malaysia
(KL)
Singapore
Workers 366 522 155 429 1,230
Engineers (Mid-level) 699 863 355 1 ,038 2,325
Managers
(Department Chief
Level)
1,574 1,501 773 1,966 4,268
Monthly Legal
Minimum Wage
181*
(20 days)229 128 274 -
Social Security (%
paid by employer)5% 45.4% 22% 13% 16%
Source: JETRO 24th Comparative Survey of Investment-Related Costs
Comparison in Major Cities and Regions in Asia and Oceania, as of May 2014
HR Development in the Automotive Industry (AHRDP)
Ministry of Industry
The Federation of Thai Industries
THAILAND
JETRO (METI)
Japan Chamber of Commerce
JAPAN
• TOYOTA Production System
TOYOTA
• Skill Certification
NISSAN
• Mind Management
• Skill Manufacturing
DENSO
• Mold & Die
HONDA
SUPPORTED BY
JAPANESE COMPANIES
Source: Thai Automotive Institute as of July 1, 2013
23
Update on Investment Promotion Policy
24
New Approach to Granting Investment Incentives
Activity-based Incentives Merit-based Incentives
+
Classified incentives based on
the importance of activities
Grant additional incentives to encourage
more investment/expenditures that
benefit the country or overall industry
A1
A2
A3
A4
B1
B2
1. Competitiveness Enhancement
2. Decentralization
3. Industrial Area Development
A1
A2
A3
A4
B1
B2
A1: Knowledge-based activities, focusing on
R&D and design to enhance the country’s
competitiveness (8-year CIT exemption without
cap, exemption of import duty on machinery/raw
materials and non-tax incentives)
A2: Activities in infrastructure for the country’s
development, activities using advanced
technology to create value added, with none or
very few existing
investments in Thailand
(8-year CIT exemption, exemption
of import duty on machinery/raw
materials and non-tax incentives)A3: High technology activities which are
important to the country’s development,
with a few investments already existing in
Thailand (5-year CIT exemption,
exemption of import duty on
machinery/raw materials and
non-tax incentives)
B1/B2: Supporting industries that do not use high technology but are still important to value chain
(B1 : Exemption of import duty on machinery/raw materials and non-tax incentives
B2 : Exemption of import duty on raw materials and non-tax incentives)
A4: Activities with lower
technology than A1-A3 but
add value to domestic
resources and strengthen
supply chain
(3-year CIT exemption,
exemption of import duty on
machinery/raw materials and
non-tax incentives)
Activity-based Incentives
Non-tax Incentives
• Permit for foreign nationals to enter the kingdom for
the purpose of studying investment opportunities
• Permit to bring into the Kingdom skilled workers and
experts to work in investment promoted activities
• Permit to own land
• Permit to take out or remit money in foreign currency
Non-tax Incentives
4.6 Manufacture of General Automobile : B1
4.7 Manufacture of automobile engines
• Project must have pressing of parts, not less than 4 out of 5 parts,
as follows: Cylinder Head, Cylinder Block, Crankshaft, Camshaft
and Connecting Rod : A3
• Assembling of engine : A4
4.8 Manufacture of Vehicle Parts : B1 & A2 for Priority List (Cont.)
Eligible Activity for Automotive
4.8 Manufacture of Vehicle Parts for Priority Activities
• Manufacture of vehicle parts using high technology
• Manufacture of automobile parts for safety parts and energy-saving
parts
• Manufacture of parts for Hybrid, Electric Vehicle (EV) and Plug-in
Hybrid (PHEV)
• Manufacture of rubber tires for vehicles
• Manufacture of other vehicle parts
Incentives:
• 8 years corporate income tax exemption, accounting for 100% of investment (exc.
cost of land and working capital)
• Exemption of Import Duty on Machine
• Exemption of Import Duty on Raw Material used in manufacturing export
products
Eligible Activity for Automotive (Cont.)
Non-tax Incentives
• High Market Potential
• Strong Support Industries
• Skilled Labor
• Competitive Cost
Automotive : Attractive Investment Sector
Thank you