Thai 'national car' makes inroads abroad

Thai 'national car' makes inroads abroad

BANGKOK (DPA): Unlike neighboring Malaysia and Indonesia,
which have the "Proton Saga" and "Timor" made-at-home vehicles,
Thailand has never imposed a "national car" policy on their home
market.

But anyone who has traveled outside of Bangkok can tell you
that Thailand has developed a national vehicle - the ubiquitous
one-ton pickup, used upcountry as a mini-bus, for transporting
farm produce to the market and as an open top family car.

Since last year Thai-made pickups have started to make inroads
abroad, partly because of a sputtering domestic market.

"It's a balancing act," says Suthida Kosarussavadi, a manager
at MMC-Sittipol Company Limited. "Our domestic market is going
down but we still have a growing export market."

MMC-Sittipol, a joint venture between Mitsubishi Corp. of
Japan and Sittipol Motors of Thailand, is one of some 17-18 local
assemblers of foreign brand vehicles.

A few years ago the Mitsubishi affiliate exported its first
batch of Thai-made one-ton "Cyclone" pickups to Cyprus, and has
since pioneered markets in Europe, the Middle East and Africa
reaching 12,569 units in exports last year.

In April MMC-Sittipol for the first time exported pickups back
to Japan, and Mitsubishi has announced it will soon stop
manufacturing pickups in Japan, sourcing exports from Thailand
instead.

MMC-Sittipol has set itself an export target of 40,000 pickups
this year, with half of them aimed at Europe. Last year it
exported pickups to Turkey, Greece, Israel, Spain and the United
Kingdom.

Mitsubishi is not the only automobile manufacturer with big
pickup plans for Thailand.

Ford and Mazda have entered a US$470 million joint venture to
assemble and partly manufacture about 120,000 one-ton pickups per
annum in Thailand for both the domestic and the export market.

The joint venture, Auto Alliance Thailand Company Limited, is
scheduled to start production in May, 1998, with about half of
its production destined for export.

Mazda, which plans to close its existing pickup factory in
Hiroshima, will use its international trading network to help
find new markets, or expand old markets, for the Thai-made Mazda
pickup.

For Ford, which is launching its own made-in-Thailand pickup
brand by sharing factory costs with Mazda, the joint venture was
primarily a means of penetrating Thailand's market for the one-
ton truck.

"In Ford's case it was kind of reestablishing a presence that
we had given up on the corporate level 20 years ago," explains
Ford Operations (Thailand) Company's manager Ken Brown. Ford and
the other U.S. auto giant abandoned the Thai market in the late
1960's when the government began to enforce a local assembly
policy.

"If you are going to do it (assembly) here the core product
has got to be a pickup because Thailand is primarily a pickup
market and it's going to be that way for a while," says Brown.

In 1996 some 589,219 vehicles were sold on the Thai market, of
which some 55 percent were one-ton pickups.

One of the reasons for the pickup's tremendous popularity is
the price; it is the cheapest car on the market selling for
between 300,000-400,000 baht ($12,000-$16,000). More than 70
percent of the parts in Thai pickups are sourced locally.

The government has classified the pickup as a "commercial
vehicle," exempting them from the 38-41 percent excise tax that
is slapped on all locally assembled or imported passenger cars.

Pickups are also cheaper to drive because they use diesel
which uses less petrol per kilometer. These cost considerations
help explain why the pickup has become Thailand's de facto
national car.

"There was a conscious decision by the government to promote
pickup consumption and production," says Michael Dunne, director
of Automotive Resources Asia, a consultancy firm.

Thailand's large domestic market for pickups goes a long way
towards explaining why Japanese and U.S. automobile manufacturers
are choosing the country as a regional hub for the one-ton
trucks.

It is the world's second largest pickup market after the U.S.,
but that sounds more impressive than it is. "There's the U.S.,
then Thailand, then nobody," says Dunne.

Many industry sources therefore wonder where the huge stock of
Thai-made pickups will be exported to, especially at a time of
falling sales domestic sales because of the poor economy. Pickup
sales reached 112,632 units during January-May, 1997, down 18 per
cent from last year's figures.

Despite all the talk of establishing a tariff-free zone in the
Association of Southeast Asian Nations (ASEAN) local pickup
manufacturers are not targeting Southeast Asia for their exports.

"The biggest ASEAN markets, Indonesia and Malaysia, already
have their own national cars," notes MMC-Sittipol's Suthida.