Source: The Nation Thailand

The event highlighted the kingdom’s suitability as manufacturing base under modern global trends. Thai trade delegates led by Deputy PM and Commerce Minister Phumtham Wechayachai met with executives of Keidanren, led by Suzuki Jun, chair of Japan-Thailand Trade and Economic Committee at Imperial Hotel in Tokyo.

During the meeting, Phumtham underscored Japan was Thailand’s third-largest trade partner last year, while accumulated investment amount from Japanese corporations made up for 25% of the kingdom’s total foreign investment, more than any other country.

He invited Japanese business leaders to invest in Thailand as well as visit the country to witness its potential. The Thai government has facilitated this by exempting visa requirements for Japanese visiting Thailand for up to 30 days since 1 January 2024, he added.

Phumtham said Thailand possesses readiness to be a manufacturing and exporting bases for various industries, adding that the government has prepared and promoted Thai entrepreneurs for new global trends that focus on green business, sustainable manufacturing, low-carbon emission and the use of renewable energy.

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Chery is the 8th EV maker from China to be approved following BYD, MG, Great Wall Motor, Changan Automobile, GAC Aion, NETA and Foton, Narit Therdsteerasukdi, BOI Secretary-General, said on 22 April 2024. Chery exported 1.8 million units last year, and aims to use Thailand as a production base to meet the domestic demand for right-hand drive EVs, as well as export the vehices to ASEAN, Australia and the Middle East.

In the first phase, Chery will establish a factory in Rayong province before the end of 2025 to produce both battery EV (BEV) and hybrid EV (HEV) vehicles at a rate of 50,000 units per year, he said. In the second phase, the production capacity will be expanded to 80,000 units per year by 2028. Chery did not unveil the total investment value.

Narit added that Chery’s EV will be marketed in Thailand under the names Omoda and Jaecoo, the company’s sub brands for foreign markets. Chery will also import the Omoda C5, the company’s first 100% SUV EV model to spearhead the Thai market around June this year at its brand-new 39 showrooms countrywide. More models of off-road EVs will follow, including the Jaecoo 6, 7, and 8, the latter two plug-in hybrid EVs.

Narit said the BOI has so far approved 26 investment projects related to manufacturing and assembly of electric vehicles from 19 companies, with total investment value of over THB 80 billion.

“The BOI is committed to the government’s policy of making Thailand a manufacturing hub of EVs in the region under the 30@30 target, with zero-emission vehicles making up 30% of total automotive production by the year 2030,” he said.

The 30@30 target translates into 725,000 electric cars and 675,000 electric motorcycles per year.

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As the country scrambles to execute search and rescue, automakers might need to brace themselves for more impact coming from disruptions of suspended port operations till further notice. According to Statista.com, Japan imported ¥269.94 billion (US$1.78 billion) of auto parts from ASEAN last year for its domestic assembly. These automakers often source various components such as engines, transmissions, electrical parts, and body parts from Southeast Asian countries. 

In 2022, the Observatory of Economic Complexity (OEC) noted Japan imported US$7.93 billion worth of motor vehicles parts and accessories from China (US$3.38 billion), Thailand (US$831 million), Germany (US$501 million), South Korea (US$447 million) and the United States (US$423 million).

Apart from auto parts, ASEAN enjoys a trade surplus of more than US$250 billion – the majority of which are due to exports of electrical machinery. The bloc exported some US$73 billion of electrical machinery and equipment in 2021, which makes up 28% of all ASEAN exports to the US. United States also imports other electrical machinery from Malaysia (US$1.73 billion), Indonesia (US$1.05 billion) and Thailand (US$1.04 billion).

What Does It Leave The Automakers?

Ford CFO John Lawler told Bloomberg TV the incident will have a negative impact on deliveries of parts. He said Ford is looking to reroute car parts to other east coast ports and it would draw on its experience with COVID-related supply chain disruptions, but that the supply chains will inevitably be lengthened. 

“It’s a large port with a lot of flow through it, so it’s going to have an impact. We’ll work on the workarounds,” he added.

GM spokesman Kevin Kelly said GM uses the port to ship some vehicles “to select export markets”. GM exports the Chevrolet Corvette, built in Bowling Green, Kentucky, to the United Kingdom through Baltimore as one example. Kelly said GM is working with its logistics providers to find shipping options at other ports, but GM expects only a minor impact on operations.

Stellantis spokeswoman Jodi Tinson said in an emailed statement, “The Port of Baltimore is an important waterway for the automotive industry. We are initiating discussions with our various transportation providers on contingency plans to ensure an uninterrupted flow of vehicles to our customers and will continue to carefully monitor this situation.”

Port of Baltimore issued a statement giving no definite date of vessel traffic resumption, which says a lot about verticals affected. If these equipment cannot make into the US, that might just mean another episode of supply chain issues and freight price gouging. Japan has officially entered a recession  with one export sector forcefully paused, the ripple will reach ASEAN suppliers.  

Although there are other ports on the East Coast, it does not translate directly to business as usual. Port capacities would be a question in terms of port throughput, and the stranded cargo contends with waiting time or even diverting further to the West.

Kevin Linderman, Professor and Supply Chain Expert at Pennsylvania State University, said: “They will likely have to reroute shipping to other ports on the East Coast. However, this will put additional demand on these ports, and shippers may not be able to access US markets.”

Apart from auto parts, construction machinery is also affected. Reuters noted at least 40 ships are now more or less trapped inside the port, and some 30 others planned to arrive there.

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Source: Chosun.com

Southeast Asia enjoyed increasing popularity of Chinese brands, and it caused Samsung’s shipment volume and market share to decrease compared to the same period last year. Canalys’ findings revealed a total of 7.26 million smartphones were shipped in January from five Southeast Asian countries, including Indonesia, the Philippines, Thailand, Vietnam, and Malaysia. It marks a 20% increase in shipment volume compared to the same period last year.

Among these, Samsung Electronics has shipped 1.5 million units, fueled by the popularity of the Galaxy S24 series. As a result, the company has achieved a market share of 20% , securing the first rank. Samsung had lost the top spot in Southeast Asia to the Chinese company Transsion in December last year but managed to regain it within a month.

According to market research firm, Canalys, the overall economic recovery in Southeast Asia has led to an increase in smartphone demand. Rising interest in Galaxy’s AI (Artificial Intelligence) technology has been a positive factor as well. Xiaomi secured the second spot in the market with a share of 18%, followed by Transsion and Oppo, both with a share of 15%. Vivo came in fifth with 12%.

However, Samsung Electronics is lagging behind Chinese companies in terms of growth. In January, Samsung’s smartphone shipments in Southeast Asia declined by 11% year-on-year, and its market share dropped by 7 percentage points to 20% from 27% in January of the last year. 

On the contrary, Xiaomi’s shipment volume surged by 128% during the same period, and Transsion’s shipments exploded by 190%, challenging Samsung Electronics.

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Source: Reuters

BYD’s sole Thai distributor will triple its dealerships in Thailand in two years, cementing the Chinese automaker’s dominant position in its top overseas market. BYD overtook Tesla as the world’s top EV maker in Q4 2023, and the expansion in Thailand underscores its global push – especially in markets where its U.S. rival has yet to become a major vendor – as EV sales growth slows in its home market China.

Rever Automotive, the distributor that helped launch BYD in Thailand in late 2022, will add 200 dealerships by end-2025, expand commercial vehicles offerings and enter new passenger car segments, CEO Pratarnwong Phornprapha told Reuters.

“By the end of this year, we’ll have 200. And the next year, we’re planning for another 100. I think around 300 for us is a healthy number,” Pratarnwong said.

Rever currently has some 100 outlets, establishing BYD as the dominant carmaker in the fast-growing Thai EV market with a 40% market share, according to Pratarnwong. BYD sold 3 million passenger vehicles in 2023, with more than 90% of those going into the China market, according to data from the China Passenger Car Association. Overseas sales amounted to around 242,000 units.

Thailand accounted for around 20% of BYD’s international sales in the third quarter, according to research firm Counterpoint, maintaining its spot as the automaker’s largest overseas market, where it is also investing THB 17.9 billion (US$504 million) to build a factory scheduled to open this year.

EV sales in Thailand made up a little over 7% of all passenger vehicle sales in the country in the third quarter of 2023, Counterpoint data also showed, but it is one of the fastest growing EV markets in Southeast Asia, aided by government subsidies and policies.

Late last year, the Thai government approved a scaled down subsidy package for the EV industry, although still offering up to 100,000 baht ($2,764) per vehicle and lower import duties and excise taxes. Overall, Thailand plans to convert about 30% of its annual production of 2.5 million vehicles into EVs by 2030 and attracted more than US$1.44 billion in investments from Chinese auto companies.

Leading EV

BYD has been outperforming other automakers in Southeast Asia’s EV market, bolstered by partnerships with local distributors and affordable models such as the Atto 3 SUV, which was the region’s bestselling electric auto in the third quarter. Recently. BYD unveiled three battery EV models in Indonesia, Southeast Asia’s biggest economy, where BYD is also planning to invest US$1.3 billion in an assembly plant.

In Thailand, its efforts to expand product offerings are set to pose a challenge to Japanese rivals, including Toyota Motor Corp, that have long dominated the country’s auto market.

“Roughly, I think we have to get into MPVs, we have to get into bigger size SUVs, and smaller size sedans, bigger size sedans,” Pratarnwong said, referring to multi-purpose and sport utility vehicles and outlining the need to expand BYD’s offerings.

Rever currently offers three BYD EV models in Thailand: the Seal sedan, the Atto 3 SUV and the Dolphin hatchback. Beyond passenger cars, Rever is looking to make inroads into commercial fleets using BYD vehicles and technology, including for taxis, short-haul trucks and vans, and buses.

Thailand had over 81,000 registered taxis as at September 2023, according to government data, and Rever is aiming to capture 40% of the new vehicles entering that market, said Pratarnwong. Rever is also offering the BYD T3 van for limited distance deliveries that picked up during the COVID-19 pandemic, Rever Vice CEO Pratarnporn Phornprapha said. “There’s a lot of short haul deliveries going on,” she said. “It’s a huge chunk which we wanted to focus on.”

Pratarnwong and Pratarnporn are from the Phornprapha family that established the Siam Motors Group (SMG), which helped develop Thailand’s automotive industry. Rever is independent from SMG, Pratarnwong has previously said. 

A Rever subsidiary is also building a bus production facility that will use BYD technology, with the first chassis likely to roll out in the third quarter, Pratarnwong said. “This year will be the year that we properly attack the commercial market,” he said.

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Source: Manufacturing Asia

More Asian countries have doubled down on their efforts to claw a top spot in the EV scoreboard. The usual suspects like China, Korea, India, Indonesia and Thailand are already in the marketplace vying for consumers’ attention in terms of charging stations availability and service accessibility. Adding insult to injury is Tesla’s losing its reign as world’s best-selling electric vehicle manufacturer.

Euromonitor International’s findings revealed China was 7th in 2023’s EV Readiness Index, rising 7 places from 2022, attributed to high investments into public charging infrastructure. The economic giant continues to be the largest EV market accounting for 61% of all the sales globally in 2023. It is also home to 1.8 million public charging stations, or about 65% of global supply. 

“China has seen a swift rise in fast charging stations, providing charging power of more than 22kW, which has helped fuel greater consumer confidence in buying an EV,” said Fransua Vytautas Razvadauskas, Insights Manager for Mobility at Euromonitor.

Following closely behind is South Korea which jumped 10 places to rank 8^th. The report also noted new growth opportunities for EV makers in emerging Southeast Asian nations, including Indonesia whose government recently rolled out incentives to boost domestic EV and battery production. Thailand has also stepped up with tax perks boosting EV sales, coupled with the influx of cheap cars from China. 

“Competition in emerging EV market economies is expected to increase, with the Asia Pacific region offering the most opportunities. Despite the infrastructure constraints, EVs will continue to gain market share, benefiting from government incentives, rising consumer incomes and expanding car ownership,” Euromonitor added.

The intelligence firm also highlighted India being one of the fastest growing EV markets in Asia as the country’s sales of electric cars is projected to skyrocket by 50% in 2023. Its government also rolled out a subsidy scheme to ramp up domestic EV manufacturing and attract investments in the sector.

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With a planned annual production capacity of 2GWh in Phase I, it is estimated that 8GWh per year can meet the market demand of Thailand and other countries in the ASEAN region in the future.

“I announce that the first battery products of Gotion High-tech’s plant in Thailand officially are rolled off the production line!” On the morning of 7 December 2023, in the Siam Eastern Industrial Park, Rayong, Thailand, with the announcement by Shan Xiangqian, Vice Governor of the People’s Government of Anhui Province, the first battery products of NV Gotion, Gotion High-tech’s joint venture in Thailand, were officially rolled off the production line.

This marks the official start of Gotion High-tech’s batteries “made in Thailand”. Mr. Auttapol Rerkpiboon, CEO of PTT Public Company Limited (PTT), Mr. Wirat Tatsaringkansakul, Deputy Secretary General of Thailand Board of Investment, and Mr. Li Zhen, Chairman of Gotion High-Tech, witnessed the event.

At about 10am that morning, when two Thai workers tightened the last two screws, Thailand’s first locally-made battery packs finally underwent all assembly processes and were officially rolled off the production line. With a charging capacity of 38kWh and a range per charge of 400km, such LFP battery packs can meet the mainstream battery demand of Class A vehicles in Thailand’s new energy vehicle market.

According to Yu Qiang, Marketing Director of NV Gotion, Gotion High-tech’s first battery packs in Thailand boast excellent performance and economic advantages in the local market. They have been officially designated as the product for Neta Auto and are expected to be supplied in bulk in the first quarter of next year.

Sun Xiyi, CEO of NV Gotion, said that the pack production capacity of Phase I of the Thailand-based plant was planned to be 2GWh per year and would be expanded to 8GWh per year according to future market demand. Statistics show that in the first three quarters of this year, the number of registered new energy vehicles in Thailand exceeded 50,000, 7.6 times that of the same period last year. This reflects huge market potential.

In addition, Gotion High-tech reached strategic cooperation with Hozon New Energy Automobile in 2023 and become the designated supplier for multiple models of Neta Auto under the company. NV Gotion is a joint venture between Gotion High-tech, a leading power battery enterprise in China, and Nuovo Plus, a new energy solution provider in Thailand.

Nuovo Plus, a subsidiary of PTT Group in Thailand, is mainly engaged in the battery business and business related to battery industry chain investment. PTT Group is Thailand’s largest state-controlled energy and petrochemical company and a Fortune Global 500 enterprise.

Mr. Auttapol Rerkpiboon, CEO and President of PTT, revealed that PTT Group is committed to reducing greenhouse gas emissions to net zero within Year 2050, with the recognition of the urgent importance of global climate change. PTT Group has introduced advanced battery technology and innovative products via the battery gigafactory jointly built by Nuovo Plus and Gotion High-tech in Thailand. By doing so, it can accelerate the achievement of its goals regarding the new energy vehicle value chain and clean energy industry.

Li Zhen, Chairman of Gotion High-tech said that the new energy revolution, with a focus on “solar energy, wind energy, and energy storage”, has opened up immensely vast opportunities in the new energy industry. Gotion High-tech’s plant in Thailand has been completed and rapidly put into production after 11 months.

The first locally-made battery packs have been rolled off the production line, marking the fruitful outcome of the cooperation between the two parties. It also represents a significant milestone in Gotion’s global presence, and brings Thailand closer to becoming a leader in the ASEAN battery market.

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Source: Manufacturing Asia

The headline ASEAN manufacturing purchasing managers’ index (PMI) rose to 50 last month from 49.6 in October, indicating steady operating conditions across the region. Last month’s print also ended two straight months of contraction. 

Three of the seven nations surveyed recorded improvements last month, led by the Philippines whose manufacturing sector jumped to a nine-month high of 52.7. The health of the manufacturing sectors in Indonesia and Singapore also expanded last month at the same modest rate of 51.7. Factory activity in Myanmar (48.1), Malaysia (47.9), and Thailand (47.6) all worsened last month while Vietnam was the laggard at 47.3.

For the entire region, factories raised their output to its highest level in three months as companies worked through outstanding orders piled up in the first half of the year, despite muted demand. 

Total factory others continued to dip for the third month running, with new orders from overseas declining once again.

Lower new orders, meanwhile, helped companies to catch up with their backlogs without cutting their staff numbers. Factories continued to grapple with high input prices that rose at its fastest pace since April, resulting in a slight increase in output charges. For the next 12 months, ASEAN manufacturers remained optimistic overall although the sluggish demand has tempered their expectations.

“If customer demand continues to wane, it will be detrimental to ASEAN manufacturing sector performance in the months ahead, said Maryam Baluch, economist at S&P Global Market Intelligence.

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Thailand’s government approved a reduced package of subsidies for electric vehicles, in a bid to sustain the country’s current EV uptake while reducing budgetary pressures. Narit Therdsteerasukdi, Secretary General of the Thailand Board of Investment, said starting next year and ending in 2027, the government will offer a subsidy of up to THB100,000 (US$2,776) per EV, down from THB150,000 (US$4,165) currently, Reuters reported.

The subsidy scheme, which has been approved by the National Electric Vehicle Policy Committee and is estimated to cost the government around THB 3 billion (US$83.2 million), will also include lower import duty and excise taxes, he added. The subsidies, known as the EV 3.5 policy, are intended “to drive a sustained policy in supporting Thailand’s role as an electric vehicle hub in the region,” Narit said. “It aims to attract new investors to establish manufacturing bases in the country while urging existing entrepreneurs to transition into the electric vehicle industry.”

Government subsidies have helped to encourage the rapid uptake of EVs in Thailand. In Q2 2023, the country accounted for about half of Southeast Asia’s total EV sales, according to data from Counterpoint Research. BMI, the research arm of the ratings agency Fitch, recently estimated that Thailand’s EV penetration rate would reach 8.7% of all vehicles by the end of this year, a substantial increase from 3.8% in 2022.

Like several of its Southeast Asian neighbours, Thailand is keen to transform itself into a regional hub for EV manufacturing, building on its long-time status as the region’s leader in auto production. (The country is also the fourth-largest vehicle manufacturer in Asia.) The government aims to convert about 30% of its annual production of 2.5 million vehicles into EVs by 2030.

The government is preparing incentives to encourage more investment in electric battery and vehicle production, and to help established car manufacturers – predominantly Japanese giants like Toyota, Honda, and Isuzu – to convert their Thai factories to EV manufacturing facilities. It has also announced that it will soon offer tax breaks and grants to automakers who set up EV research and development centers in Thailand, or relocate their regional headquarters to the country.

So far, the country has scored considerable successes, particularly in attracting major Chinese EV manufacturers to the country. In March, China’s BYD broke ground on an EV factory in Rayong, south of Bangkok, which is expected to start production in 2024 and will have an annual capacity of 150,000 vehicles.

In May, China’s Hozon New Energy Automobile also set up a factory in Thailand to begin production of its NETA V model. In August, Changan Automobile confirmed unofficial earlier reports by announcing that it would invest RMB1.83 billion (US$251 million) to set up a plant in Thailand with an annual capacity of 100,000 units.

All of these firms will join China’s Great Wall Motor, which acquired a factory from General Motors in 2020, which it intends to turn into a regional production center for EV and hybrid cars. The Thai government is also in talks with other Chinese firms including Geely and Chery, according to Bangkok Post.

The government is hoping that these various incentives for vehicle producers and battery makers will reduce their costs, make EVs cheaper for Thai consumers, and hence allow for subsidies to be reduced. 

“In the past two to three years after the government’s support, the rate of EV use in Thailand has greatly increased. So support from the government will gradually reduce in line with the situation, in order not to cause too much of a burden on the budget.” Narit said.”

With this latest happening, the metalworking industry can expect further dips in orders given consumers’ interest in EVs may also slow down due to incentive cuts. 

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Source: Pulse

The move is seen as part of an effort to advance aggressively into the Association of Southeast Asian Nations (ASEAN), following India, while its Chinese business remains sluggish. It is also seen as a strategy by its parent Hyundai Motor Group to diversify its global production base.

According to multiple sources from the automobile industry, Kia is discussing details on building a factory in Thailand. It is the first venture into building a new overseas plant in four years after the construction of the Indian factory in 2019.

Kia and the Thai government are expected to sign an investment deal on the factory construction later this year. Construction is expected to begin in H1 2024 for the plant with an annual production capacity of up to 250,000 units.

Kia currently operates overseas production facilities in the U.S., China, India, Slovakia, and Mexico. The Thailand factory will be its sixth global production base. As for Hyundai Motor Group, it will be the second production base in ASEAN.

Kia’s bigger sibling Hyundai Motor Company. began operations of a production facility in Indonesia last year. Hyundai Motor Group’s entry into Indonesia and Thailand comes as the two countries are the largest automobile markets with potential for growth.

According to the ASEAN Automotive Federation, Indonesia had the largest sales in the first half of this year with 505,985 units, followed by Thailand with 406,131 units, and Malaysia with 366,037 units.

Thailand has emerged as a market that will offer new business opportunities to Kia, as its government pledges to expand the production of electric vehicles (EVs) by 2030 with supportive initiatives. Kia will promote its flagship EVs, such as EV6, in Thailand.

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The post Kia Mulls Starting Its First ASEAN Production Facility In Thailand appeared first on Asia Pacific Metalworking Equipment News | Manufacturing | Automation | Quality Control.