A Resilient Thai Automotive Industry

By Mr.Charn Saralertsophon

Director General

The Federation of Thai Industries

27th January 2012

Global Positioning

3

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

ChinaU.S.A.Japan

GermanyKorea Ind

iaBrasilSpain

MexicoFrance

CanadaRussia

ThailandU.K.

TurkeyCzech Ita

ly

Indonesia

Argentina

MalaysiaOthers

Units

23%

Thailand production ranking no.13 globally 957,846 units in 2011

Source : Fourin

World ranking of Automotive Production (Jul’11)

<x1,000 units>

4

0

1,0002,000

3,0004,000

5,000

6,0007,000

8,0009,000

10,000

11,00012,000

ChinaU.S.A.JapanBrasil

GermanyIndiaRussiaFranceU.K.Italy

CanadaKorea

Australia Sp

ain

Thailand

Indonesia

Mexico

Argentina

Belgium

NetherlandOthers

Units

Source : Fourin

23% 20%

3%

Thailand sales ranking no.15 globally 583,957 units in 2011

World ranking of Automotive Sales (Aug’11)

<x1,000 units>

ASEAN Markets

6

Brunei,11,970

Indonesia ,746,199

Malaysia,503,898

Philippines,119,152

Singapore,33,648

Thailand ,713,842

Vietnam,89,858

23%

32% 34%

Source : ASEAN Automotive Federation

2%

4%

5%

ASEAN Automotive Industry

ASEAN Automobile Market Share (Jan – Oct’11)

Total sales of 2,218,567 units

Thai Latitude

8

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011F 2012E

Production Domestic Export

Tom-Yung Kung crisis

1 Mil milestone

Hamburger crisis

2010 2011 (adj. Forecasted) •  Production 1,645,304 1,400,000

•  Sales: 800,357 700,000

•  Export: 895,855 700,000

Japan Tsunami & Earthquake

Thai Flood 2011 <x 1,000

units>

?

Thai Automotive Industry Situation

9

146

172

89

174

49

24

-25%

23%-68%

-85%0

40

80

120

160

200

240

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec-100%

0%

100%

200%

300%

400%

500%

Production 2010 Production 2011 % '11 vs '10

Jan – Nov 2011 = 1,358,369 units

Jan – Nov 2010 = 1,507,901 units

% Growth = -1%

Japan Tsunami Thai Flood

Target 1.8 mil.

Target 1.4 mil.

Thai Automotive Industry Situation

Car Production (Jan – Oct’11)

146,231 150,743

172,004

89,179 98,804

153,646 147,236 153,180

174,212

49,439

23,695

99,426 103,849

127,849

151,143

105,110

132,165 148,878 145,771 141,049

141,416

152,689 157,982

137,403

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Units

Production 2011 Plan 2011 Production 2010

Car Production of Dec 2011

Source: Automotive Industry Club, FTI

320 % (Compared Nov’11) - 28 % (Compared Dec’10) - 31 % (Compared Plan)

Jan-Dec 2011 = 1,457,795 units Jan-Dec 2010 = 1,645,304 units % Growth = - 11 % Plan 2011 = 1,794,486 units Actual < Plan = 19%

Domestic and Export Production of Dec 2011

Jan-Dec 2011 Total = 1,457,795 units - Domestic = 723,845 units ( 50%) - 4 % - Export = 733,950 units ( 50%) - 18 %

Jan-Dec 2010 Total = 1,645,304 units -  Domestic = 750,614 units ( 46%) -  Export = 894,690 units ( 54%)

Source: Automotive Industry Club, FTI

12

Jan-Nov’ 11= 700,581 units

CBU Value : ~326,335 Mil. Bht

Total Export Value : ~494,300 Mil. Bht

Export Sales

Source： The Thai Automotive Industry Association

Thai Automotive Industry Situation

Jan – Nov 2011 = 700,581 units

Jan – Nov 2010 = 824,830 units

% Growth = -15%

PPV8%

Passengercar25%

Pickup67%

Oceania21%

Middle East21%

Asia32%

Africa5%

Europe10%

Central &South

America11%

Car Export Sales (Jan – Nov’11)

Car Domestic Sales of Dec 2011

Source: Automotive Industry Club, FTI

68,398

77,213

93,008

67,283

55,851

70,259 72,902 79,043

87,012

42,873

26,069

55,339 49,560

54,175

63,067

57,128

62,205

70,557 65,672 65,724

68,261

72,012 78,874

93,122

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Units

Month Year 2011 Plan 2011 Year 2010

Car Domestic Sales 112 % (Compared Nov’11) - 21 % (Compared with plan) - 41 % (Compared Dec’10)

Jan-Dec 2011 = 795,250 units

- 1 % (Growth of Jan-Dec)

Car Domestic Sales of Jan-Dec 2011

Source: Automotive Industry Club, FTI

Jan - Dec’11 = 795,250 units

P-Car: Jan-Dec’11 = 335,202 units Jan-Dec’10 = 343,821 units % Growth = - 3 %

P/U 1t: Jan-Dec’11 = 327,675 units Jan-Dec’10 = 347,314 units % Growth = - 6 %

PPV: Jan-Dec’11 = 38,173 units Jan-Dec’10 = 40,479 units % Growth = - 6 %

Other: Jan-Dec’11 = 52,611 units Jan-Dec’10 = 50,003 units % Growth = 5 %

Eco-Car: Jan-Dec’11 = 41,184 units Jan-Dec’10 = 18,740 units % Growth = 120 %

15

Foreign Majority

54%

Foreign Joint

Venture

Local Supplier

Thai Majority

23%

Pure Thai 23%

Tier 1 (Total 690 Companies)

Assembler (Car 16 Companies, Motorcycle 7 Companies)

Tier 2,3 (1,700 Companies)

Thai Automotive Industry has huge contribution to Thai economy, supported by a strong supplier network.

Strong Suppliers Network

Source : Economist Intelligence Unit, UK

TAI 2010

AutomotiveIndustry10%

Manufacturing GDP

To Manufacturing GDP

Thai Automotive Industry Situation

Contribution to Thai Economics

146,231 150,743

172,004

89,179 98,804

153,646 147,236 153,180

174,212

49,439

23,695

99,426 103,849

127,849

151,143

105,110

132,165 148,878 145,771 141,049

141,416

152,689 157,982

137,403

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Units

Production 2011 Plan 2011 Production 2010

Car Production of Dec 2011

Source: Automotive Industry Club, FTI

320 % (Compared Nov’11) - 28 % (Compared Dec’10) - 31 % (Compared Plan)

Jan-Dec 2011 = 1,457,795 units Jan-Dec 2010 = 1,645,304 units % Growth = - 11 % Plan 2011 = 1,794,486 units Actual < Plan = 19%

The Trend

18 18

Thailand is here!

Automotive trend

Technological Direction for Vehicles

19

E850.4%

E2036.8%

HV0.1%

Bio-Diesel47.9%

E109.2%

CNG5.6%

2005 2006 2007 2008 2009 2010

3 8 13 4

4,901

6,821

HV Sales Hybrid Share

(Jan-Jun 2011)

Total 432,012 units

  Hybrid in Thai market is the smallest section, but its sales has dramatically increased since its introduction phase.

Imported Cars

Local HV produced

starts

<units>

Hybrid in Thailand

2011 Flood &

Rehabilitations

21

1.  Exempt import duty of machineries.

2.  Exempt import duty of auto-parts.

3.  Exempt import duty of CBUs for factory that was flooded.

4.  Provide soft loan to flood victims.

5.  Commercial bank to relax and delay paying loan.

6.  Support on moving machineries, tools and products out from flood area.

7.  Facilitate in issuing visa of foreign specialists who seek support on flood matters.

8.  Relax practices according to Alien Act. to enable foreign company to help local flood victims.

Thai Government Supportive Policies in Flood 2011

Government promptly support the flood victims in automotive industry

22

Thai Government Supportive Policies in Flood 2011

Yes Thailand

24

Hub of Pickup

Unique Eco-Car

Hub of automobiles & parts Regional R&D center

Hybrid Vehicle local production

Unique environmental friendly vehicle (Eco-Car) created by Thai govt.

Local Hybrid Vehicle production ie. Camry hybrid, Prius and others are coming.

-  Toyota Motor Asia Pacific Engineering & Manufacturing

-  Honda R&D Asia Pacific

-  Denso International Asia (R&D)

-  Isuzu R&D

-  Others

Thai Automotive Outstanding Points

25

Thailand has largest and expanding production

26

•  Thailand is the hub of pickup and derivatives (Niche Product) of the world. •  Regional market is plentiful. •  Government has firm and consistent supportive policies ever since. •  Long experiences of basic technology and skilled labor force. •  Strong supplier networks. •  Industrial estates and infrastructure are well coordinated. •  (Peaceful political situation)

•  Disunity of government policies. •  Lack of own technology. (Innovation) •  Raw material and machineries. (R&D) •  Human resources. (Vocational skills)

Weaknesses

Strengths

Strength and Weakness of Thai Automotive Industry

27

Infrastructure   Good infrastructure network

Market   Considerable market size (65 Mil people)   Gateway to 580 million people of ASEAN   Spring board to China & India, GMS and BIMSTEC

  Attractive government incentives Government

Supplier   Rich pool of supporting industries   Good access to raw materials

People   Abundant quality labor forces   Hospitality, friendly attitude and flexibility

Amenity   Low cost of living   Delicious foods and Rich Culture, Arts & Craft.   Attractive Heritage sites

Good Supportive Factors that Thailand is more attractive for investment

Summary

28