Supunnabul Suwannakij
Supunnabul Suwannakij
Dow Jones
Bangkok
Japan's Denso Corp. plans to invest close to US$500 million in
Southeast Asia from this year through 2010, with Thailand as the
main investment focus, in order to take advantage of the region's
fast-growing car market.
The leading automotive electronic parts maker, and an
affiliate of Toyota Motor Corp., has set an initial investment
budget of around $280 million for 2003 to 2005, to be used to set
up new production facilities and increase existing production
capacity, said Chishu Murodono, managing director for Denso
International Asia Pte. Ltd.
"In 2005-2010, we will invest another $200 million in the
region, half of which will be invested in Thailand," Murodono
told Dow Jones Newswires in an interview. Other countries Denso
may invest that money in include Indonesia and Malaysia.
From 2000 to 2002, Denso invested $120 million in the region.
Of that amount, 40 percent was in Thailand and the rest mainly in
Indonesia and Malaysia. At present, the company has four
production facilities in Thailand.
Denso has raised its projection for vehicle production in
Southeast Asia to 2.5 million units in 2005, from 1.4 million
units in 2002, Murodono said.
The Thai vehicle market is expected to reach 900,000 units in
2005, he added.
For the January-September period, new vehicle sales in
Thailand rose 32 percent on year to 379,252 units. Total vehicle
sales in Thailand this year should reach 500,000 units or more,
according to the Federation of Thai Industries.
Denson's investment plan will fuel its revenue growth in the
region. Murodono said he expects the company to enjoy double-
digit annual growth in Southeast Asia sales up to 2005, and 50
percent annual growth after 2005, contributing a significant
share to total sales around $20 billion in 2002.
"We target sales from Southeast Asia to reach $1 billion in
2005, almost doubling from $530 million in 2002," Murodono said.
Thailand is a key player in the region, with expected sales of
$450 million in 2005, from $200 million in 2002, he added.
Thailand was chosen as the primary focus for Denso's
investment in the region due to its booming car market and its
potential as the 'Detroit of Asia,' Murodono noted.
Major Japanese car makers such as Toyota Motor and Isuzu
Motors Ltd., and U.S. auto giant Ford Motor Co. (F) have
announced plans to increase their investment in Thailand, as the
country's robust economic growth fuels more automobile sales.
The new Thai production plants and the expansion of its existing
facilities will mainly cater to growing domestic demand and
supply the car manufacturing plants located in the country,
Murodono said.