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.