BMW Thai unit expansion hinges on AFTA plan<\/p>\n
BANGKOK (Dow Jones): The Thai unit of Germany's auto maker
\nBayerische Motoren Werke AG, believes Thailand has great
\npotential to become its regional hub for production and export
\nbut says that expansion depends on the development of free trade
\nin the region.<\/p>\n
\"Thailand is the only country in Asia where we have invested
\nin a plant. This is a strategic investment for BMW,\" Karsten
\nEngel, president of Bayerische Motoren Werke (Thailand) Co., told
\nDow Jones Newswires in an interview.<\/p>\n
BMW has invested around US$25 million in the Thai assembly
\nplant which has an annual capacity of 10,000 units but is
\ncurrently running at only less than a fifth of its capacity, he
\nsaid.<\/p>\n
Engel said any increase in production volume and capacity will
\ndepend on the growth rate of domestic sales and on the speed at
\nwhich the Association of Southeast Asian Nations' Free Trade Area
\nagreement, or AFTA, moves to remove tariff barriers for the
\nautomotive industry.<\/p>\n
\"Our expansion has to be in line with the development of the
\nAFTA agreement. At the moment we have enough capacity to export
\nto all countries in Asia,\" said Engel.<\/p>\n
Earlier this year, AFTA suffered a setback as Malaysia decided
\nunilaterally to delay tariff reductions on cars and parts until
\n2005, from 2003 as earlier agreed. Although the move has upset
\nThailand and foreign investors, a meeting last week among AFTA
\nmembers formalized the delay, allowing Malaysia to compensate its
\npartners for not reducing tariffs on cars.<\/p>\n
Malaysia stood firm by its decision, arguing it needs to
\nprotect its national car maker Perusahaan Otomobil Nasional Bhd.,
\nknown as Proton.<\/p>\n
The tariff barrier removal will provide a great opportunity
\nfor BMW to export from Thailand to the rest of Asia, Engel said.<\/p>\n
\"From our current investment plan, we can expand our capacity
\nto 30,000 cars per annum, but when we'll do it depends on AFTA,\"
\nhe said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bmw-thai-unit-expansion-hinges-on-afta-plan-1447893297",
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