Thailand's continued policy of undertaking various free trade agreements and its recent entry into the enlarged Asean Free Trade Agreement (Afta) can help companies that have operations in Thailand use the country as the production base for exports, one of the country's largest investors says.
With Thailand becoming a part of the Afta, which became effective on Jan 1, the prospects for further use of Thailand as the production hub for key sectors such as automobiles have started to show greater potential.
Toyota Motor Thailand (TMT), the country's largest automaker, confirmed that Thailand is the most suitable to be the auto hub, especially when compared with other Asean members such as Malaysia or Indonesia, and the company will continue to use Thailand as one of its production bases despite the uncertain political situation.
TMT president Kyoichi Tanada said Thailand was an open market for the auto industry with highly skilled labour and good infrastructure. Therefore, not only is the company undeterred by the protracted political conflicts, it has pledged to commit more investment to Thailand if necessary.
"Anyway, we still have excess capacity as we now run at 550,000 units [out of the total capacity of 800,000]. Despite the instable political situation, I'm quite confident about Thailand's potential of being one of the world's leading auto hubs. After all, annual production above 1 million units isn't normal when compared with other countries across the world," he said.
Currently, Toyota operates three production plants in Thailand. The Ban Pho plant has a capacity of 400,000 units while the Gateway and Samrong plants each can make 200,000 units a year.
According to the Thai Automotive Institute, auto production in Thailand should rebound to the pre-crisis level of 1.4 million units this year. Of the total, 45%, or around 630,000 units, are local sales due to the higher purchasing power among Thai consumers.
Apparently sharing Mr Tanada's views are 10 more automakers who are applying for investment privileges with the Board of Investment (BoI) with a total investment value of 10 billion baht. Most of them are Chinese, which hope to use Thailand as a springboard for their overseas expansion, according to the industry's body.
Commenting on the latest Malaysian Auto National Policy, Mr Tanada said it was not attractive enough for automakers because the government was still protecting the Proton national car at the expense of other automakers, a deterrent for foreign investors. In addition, with a population of 27 million, the local market is too small.
A bigger country like Indonesia, meanwhile, lacks the supporting factors that Thailand has, especially with regard to human resources, he added.
Besides, the bilateral free trade agreements (FTAs) that Thailand has undertaken will help boost the country's exports in the long term. The Thai-India FTA, in particular, will provide enormous benefits because India is strong at making parts for small car. By importing them from the South Asian country, Thailand can promote its eco-car project at even lower costs in the future, he pointed out.
For the project, Mr Tanada warned that Toyota might delay its entry in the segment - it might join the fray in the next three years - because it is not sure about the market potential.
"According to our long experience in Thailand, I don't think that eco-car has high potential because it might not match Thai consumers' behaviour. Anyway, hybrid [cars] will be promoted because we are the only producer in the hybrid technology," he said.
Toyota successfully launched the Camry Hybrid in Thailand last August. Since then, it has sold 1,000 units per month with a long waiting list.
Since the "hamburger crisis" in late 2008, Mr Tanada said the Thai auto market had picked up faster than its regional peers, with sales projected at around 600,000 units this year. Despite a steep decline in the first six months last year, local sales started to recover with annual sales targeted at around 530,000 units by the end of 2009, up from the previous forecast of only 480,000 units.
"The market has started to recover in all segments, even big trucks, one-ton pickups and passenger cars because the prices of agricultural products such as rice, rubber and sugarcane are high while oil prices aren't too high. Based on the current economic factors, I think sales might reach 600,000 units in 2010," he said.
For exports, Mr Tanada said the markets had shown recovery signs as well. The strong baht, however, has narrowed margins so the government should help stabilise the local currency to help the export sector.
At present, Toyota accounts for around half of the 500,000 units shipped from Thailand. Of all Toyota's 98 export destinations, the main markets are the Middle East such as the United Arab Emirates, Oman and Australia.
"Auto exports in 2010, especially in the first half of the year, will definitely grow. So I would like to ask the government to help soften the impact of the strong baht which should not be stronger than 35 baht," he said.
Meanwhile, the Federation of Thai Industries (FTI) estimated that local auto sales should reach 540,000 units in 2009, up from the previous forecast of 500,000. Exports were estimated at 520,000 units, up from 510,000 forecast earlier.
The FTI also expects to see auto production at around 1.2 million units in 2010, split equally between local sales and exports. Asia, Australia and the Middle East are potential markets due to their economic recovery signs while the baht is the most influential factor for auto exports.
Mr Tanada suggested the government keep promoting the one-ton pickup, Thailand's product champion for which the country is already famous. "Being the leader in one-ton pickups is a strong point of Thailand and the government should do more to promote promote the sector. It would be great if the government maintain the existing tax rates."
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Writer: Thosathorn Kruthanawat Position: Reporter
It seems that Lotus has filed a patent for their own twin clutch transmission design on the 30th of December 2009. The Applicant is listed as Lotus Cars GB and the ‘inventor’ is a certain Mr James William Griffith Turner.
WALLINGFORD - Proton Energy Systems, which manufactures hydrogen generation equipment, has an application before the Planning and Zoning Commission to build a commercial hydrogen vehicle fueling station in Connecticut in the parking lot of its 10 Technology Drive headquarters. The application is on the commission's agenda for Monday. The company, which was founded in 1996 and moved to its present location in 2002, has built and delivered thousands of hydrogen generating devices of various sizes to industrial customers worldwide, and foresees a major spike in hydrogen powered vehicles in the coming years. Robert Friedland, Proton's president and chief executive officer, said hydrogen vehicles are safer and better for the environment than their gasoline powered counterparts, and the energy necessary to produce a kilogram of hydrogen - which is equal to about 2.5 gallons of gasoline - is practically comparable to the amount of needed to produce a gallon of gasoline. There are only several hundred hydrogen powered vehicles on American roads, Friedland said, which can only be leased from manufactures at a high price point, but that number is expected to increase dramatically over the next several years as more and more auto manufactures develop prototype vehicles. "The automotive companies feel they will be able to launch these vehicles in the 2015 range at a similar price range for what you'll soon see in the electric car market," Friedland said, "which is several thousand more than a gasoline powered vehicle." Proton already has a version of this hydrogen fuel generation technology in place at 16 different facilities throughout the United States, including two in New York, but the Wallingford station would feature a new generation device with a larger yield capacity. Hydrogen fuel generation technology can produce about 10 to 15 kilograms of hydrogen a day, enough to fuel two to three hydrogen cars (an average hydrogen car would have a "full tank" at 5 kilograms of hydrogen), but the device at the Wallingford station would have a yield of about 65 kilograms of hydrogen a day, enough to fuel about 13 cars daily. If approved, the Wallingford station would serve as the prototype for SunHydro Fuel Stations, a chain of hydrogen fueling stations the company is hoping to expand across the nation. SunHydro's Web site includes a list of 10 future stations across the East Coast from Portland, Maine, to Miami, Fla., under what it dubs "Phase 1," with future phases extending stations from New York City to Los Angeles and beyond. Friedland said the idea for the stations came from Tom Sullivan, founder and chairman of the Lumber Liquidators flooring supplies chain, who acquired Proton for $10.2 million last August. "If we dot the area with enough of these stations, we'll begin to form the infrastructure in terms of the rollout" from automakers, Friedland said. To offset the increase in energy consumption because of the new generation station, Proton also has plans to install 75 solar panels on the roof of its facility, and will even be reimbursed for some of the expense by the Wallingford Electric Division. One of the principle reasons Proton decided to move its operations to Wallingford in 2002 is precisely because of the presence of the electric division, according to Larry Moulthrop, a vice president for the company. "We get very good rates here; the best in the state," Moulthrop said. Friedland said that if approved, the station is expected to be open by July, but because of the existing zoning regulations there was some doubt as to whether the company could actually charge for the hydrogen it would supply to cars. "Charging for the hydrogen and some of the other issues is more complicated than actually building the unit," he said. Proton Energy Systems is asking the PZC for a secondary use amendment to construct the station in the visitors' parking lot of its headquarters. Town Planner Linda Bush said her department did not have any issues with the application because Proton has ample space in its parking lot and the amount of traffic generated by the station would be negligible. Bush said she did not foresee any problem with a commercial facility, such as the station, in an industrial area. "It shouldn't be a problem because it's capped," Bush said of the amount of cars that can use the station daily. dmoran@record-journal.com (203) 317-2224 
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