Thai Summit eyes RI company
Thai Summit eyes RI company
Arijit Ghosh, Bloomberg, Bangkok
Thai Summit Autoparts Industry Co., the nation's biggest supplier
of motorcycle parts, said it is in talks to acquire an Indonesian
autoparts maker as it seeks to expand in Asia's third-largest
motorcycle market.
"Thailand's motorcycle market is saturating, while Indonesia
has a growing market," Thanathorn Juangroongruangkit, executive
vice president of Thai Summit said in an interview in Bangkok on
April 28, He did not name the Indonesian company.
A venture in Indonesia will help Thai Summit tap rising demand
in Asia's biggest motorcycle market after China and India. Sales
have increased an average 53 percent a year in the past five
years. Faster economic growth and record low interest rates have
helped companies such as PT Astra Internasional, the nation's
largest auto distributor, sell more motorcycles and cars.
"Consumption for motorcycles in Indonesia is very strong,"
said Erwan Teguh, head of research at PT Danareksa Sekuritas in
Jakarta, who forecasts a 30 percent growth this year. With a
lower per capita income than Thailand, many Indonesians opt for
motorcycles over cars, he said.
Indonesia had a per capita gross national income of $810 in
2003 compared with $2,190 for Thailand, according to the World
Bank.
Thai units of companies such as Honda Motor Co., Thailand's
biggest motorcycle maker, are boosting exports as domestic sales
growth slows. Thai motorcycle exports in the first quarter rose
32 percent to 266,359 units from 201,654 units in the same period
a year earlier. Motorcycle production in the quarter rose 14
percent to 818,075 units, according to the Thai Automotive
Industry Club, a trade group.
An economic expansion in Indonesia is also boosting sales of
motorcycles. The economy expanded 5.1 percent last year.
Indonesian Finance Minister Jusuf Anwar on May 4 said proposed
corporate tax cuts will boost investment and job creation, and
help accelerate the nation's rate of economic growth to 7 percent
or more by 2009.
PT Bank Internasional Indonesia, partly owned by Kookmin Bank,
South Korea's largest lender, is buying a stake in a motorcycle
financing company in the Southeast Asian nation to tap rising
sales.
Thai Summit, which forecasts US$660 million of sales this
year, has a venture in India with autoparts maker Jay Bharat
Maruti Ltd. near New Delhi and has factories in Malaysia.
The company is also in talks with Ashok Leyland Ltd., India's
second-largest truckmaker, to make Ashok Leyland vehicles in
Thailand.