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Ahead Of COVID-19: Automotive On Slow Recovery

Ahead Of COVID-19: Automotive On Slow Recovery

Countries around the world are bracing for a possible, looming “second wave” of infections. However, the damage to the automotive industry has already been done. 

As one of the hardest hit sectors, the world’s light vehicle market is forecasted to decline by 17 percent to 73 million units in 2020, due to its impact and its associated economic fallout, according to GlobalData. This is a bigger one-off shock than witnessed in the two years of the global financial crisis. In fact, the damage has been the most acute in the second quarter of this year, when strict lockdown measures were in place across the world.

COVID-19 Updates: Auto Makers Revving Up Production To Drive Market Recovery

Impact of COVID-19 On The Automotive Manufacturing Supply Chain

APMEN SURVEY: COVID-19 Impact On Manufacturing Industry

In Indonesia, car sales fell by 46 percent annually in the first half to just 260,933 units, according to Association of Indonesian Automotive Manufacturers (Gaikindo) data compiled by Astra, as reported by The Jakarta Post.

Sales for the first half of the year in Thailand were down by 37.3 percent to 328,604 units, according to MarkLines Data Center. In particular, vehicle sales in June declined by 32.6 percent year-on-year to 58,013 units, marking its 13th month of successive declines. Production during the first half of the year was down by 43.1 percent to 606,132 units, according to the Federation of Thai Industries (FTI). 

Here, we continue to bring you the latest coverage in ASEAN’s automotive industry amid COVID-19: 

THAILAND

  • Energy Absolute (EA) will be unable to deliver 5,000 electric vehicles (EV) to clients this year, causing it to revise its revenue outlook from THB20 billion set before the outbreak to THB15 billion, according to a report from Bangkok Post.
  • By brand sales in June (data by MarkLines Data Center):
    • Isuzu was up by 26.1 percent to 16,661 units. For January to June, Isuzu reports sales of 76,054 units, down by 15 percent YoY. 
    • Toyota was down by 53.8 percent to 13,345 units
    • Honda was down by 52.1 percent to 5,822 units.
    • Mitsubishi sales were down 45.7 percent to 4,002 units
    • Nissan sales were down by 35.5 percent to 3,523 units.
    • The FTI announced that new vehicle production in June was 71,704 units, down by 58.5 percent YoY, but around 28 percent higher than the previous month as most car makers have restarted operations at their manufacturing plants. For 2020, FTI expects total vehicle production to reach 1.4 million units in 2020.
    • Sales of eco-cars in Thailand witnessed over 40 percent drop in the first half of 2020 to 69,816 units, MarkLines citing an article from Prachachat Turakij.
    • Starting August, Mazda Motor Corp. will return operations to normal or to pre-production adjustment levels. Overtime hours and work on holidays will resume for all plants. The car maker plans to continue normal operations from September onwards.
    • According to Bangkok Post, Germany-based MAN Truck and Bus Thailand remains optimistic about its future business in Thailand. Despite the ongoing pandemic, MAN maintains plans to expand its market in Thailand as it still sees the country—located geographically in the center of ASEAN—as a market with potential for its business expansion.
    • Suzuki Motor Thailand has sold 11,089 automobile units in the first half of 2020, down by 9 percent YoY.
    • The Thailand Energy Business Department said the enforcement of Euro 5 emissions standards will be postponed from 2024 after lockdown measures halted upgrade plans at six refineries. The upgrade requires technical help from overseas experts who are unable to visit Thailand because of travel restrictions imposed during the pandemic. According to Bangkok Post, the government is considering delaying a plan to make E20 the fundamental petrol at all stations because of the crisis.
    • China-based tire maker Linglong International Tire (LLIT) aims to boost its production capacity in Thailand in 2020, according to MarkLines, citing a Prachachat Turakij report.
    • Vroom Thailand, importer and distributor of Indian and European motorcycle brands, plans to expand its business by setting up a local factory to produce them in the country by 2023, according to Bangkok Post. The company plans to make Thailand its HQ in the ASEAN region.
    • During the first five months of 2020, only 600,000 motorcycles were sold in Thailand, down by 18 percent from 740,000 year-on-year, Bangkok Post cited Vroom chief executive Hideki Yanagisawa as saying. However, he expects better market sentiment in the second half this year, with full-year sales at 1.4 to 1.5 million units.
    • Thailand’s natural rubber industry is likely to remain depressed this year despite a sharp rise in demand for protective rubber gloves driven by the COVID-19 pandemic. According to the Thai Rubber Association, the virus crisis has prompted many automotive factories, notably in the United States and Europe, to shut down or slow their production, resulting in lower rubber tyre demand, Bangkok Post reported.
    • Eastern Polymer Group (EPG), Thailand’s top plastic moulder by capacity, is considering a move into the lucrative healthcare plastics market after suffering sales drops in its automotive products and insulation materials in air conditioners because of the pandemic, according to Bangkok Post.

INDONESIA

  • PT Astra International has reported a drop in revenue and net profit in the first half of the year, largely because of the pandemic’s major impacts on the automotive industry and commodity prices, according to The Jakarta Post. Countermeasures against the pandemic implemented in most regions in Indonesia, including the temporary closedown of manufacturing activities and automotive distribution, have impacted the group’s operations substantially.
    • Astra’s car sales fell by 45 percent during the first half of the year to 139,500 units. In the second quarter alone, sales fell 92 percent against the previous quarter. Honda Astra’s motorcycle sales, meanwhile, fell 40 percent to 1.5 million units in the first half and 80 percent quarter-on-quarter.
  • The Trade Ministry expects a boost in the export of some Indonesian products to Australia, including automotive products, electronics, and communication tools, as the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) is now in effect, according to The Jakarta Post.

VIETNAM

  • Vietnam Motorcycle Manufacturers Association (VAMM) has reported sales of 518,920 motorcycles in the second quarter, down by 30.8 percent. For the first half of 2020, sales surpassed 1.24 million motorcycles. Among the members—Honda, Piaggio, Suzuki, SYM, and Yamaha—Honda Vietnam now accounts for 80 percent of the motorcycle market share in the Vietnam market, according to a MarkLines report citing Autodaily.vn.
  • Vietnam’s motorcycle market has also entered a period of saturation, being unable to maintain the impressive sales growth rate as in previous years.
  • The Ministry of Industry and Trade (MoIT) will focus on removing difficulties in industrial sectors in the second half of this year, especially the processing and manufacturing industry, to expand production and business, according to Viet Nam News. It plans to work closely with foreign-invested firms such as Samsung and Toyota and search for local producers to make raw materials and components to replace imports. The ministry has suggested localities develop material production regions, industrial parks and economic zones to ensure they have raw materials for domestic production.

PHILIPPINES

  • The Philippines Association of Vehicle Importers and Distributors Inc. (AVID) said sales of imported vehicles in June nearly tripled to 3,697 units from just 1,239 units in May, according to Philippine Star. Despite the huge improvement month-on-month, vehicle importers still registered a 55 percent YoY drop in sales during the first half of 2020 amid the temporary closure of dealerships during the lockdown imposed by the government due to the COVID-19 pandemic. AVID said it remains watchful of factors that may continue to dampen automotive sales in the coming months. These include lower remittances, weaker demand, and the prospect of a second wave of COVID-19 pandemic.

MALAYSIA

  • Following the sales tax exemption announced by the government on 5 June to boost car sales amidst the ongoing COVID-19 pandemic, Perodua has wrapped up June 2020 with an estimated 21,250 cars sold—its highest monthly sales figure so far this year and nearly triple that of last month. Perodua managed to sell 8,601 cars in March before the Movement Control Order (MCO) came into effect on the 18th day, halting the carmaker’s nationwide operations for two months. Perodua officially restarted nationwide on 19 May, managing to sell 7,886 cars before month-end.

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ASEAN Automotive On The Road To Recovery

ASEAN Automotive On The Road To Recovery

Despite continued softness in the market, the automotive manufacturing market is steadily moving towards recovery. According to Globaldata, although the global light vehicle sales fell 33.8 percent in May compared to a year ago, it showed an improvement from April when sales fell a record low of 47.5 percent. Analysts believe markets will begin the long climb back and we will begin to get more signals on market demand for the rest of the year.

In fact, China will lead the global auto market recovery. With automotive production and supplies resuming and China lifting restrictions on the movement of people and goods since early April, vehicle sales have started to stabilise.

Here, we take a look at the latest developments in the ASEAN automotive market and its road to recovery:

Thailand:

With phase 4 of relaxations, Federation Of Thai Industries (FTI) expects gradual recovery of the automotive market as businesses restart operations.

However, May vehicle production production was down 69.1 percent in May YOY, totalling 56,035 units. They noted that 2020 vehicle sales could be 700,000 units if the outbreak stays under control, or 500,000 units if local infections continue into September. 

Furthermore, 50 percent decline is expected for the auto parts market, but the Auto Parts Industry Club expects gradual recovery of auto parts industry as Thailand enters Phase 4 relaxation

  • AAPICO Hitech (AH) expects losses in its Q2/2020 amid the continuing decline in the local automotive industry from the beginning of the year due to the pandemic, Marklines cited a Thun Hoon report. Among AH’s businesses is the manufacture of OEM automotive parts. The company, according to the report, plans to boost its production capability this year to serve new auto parts products.
  • Mazda has reported sales of 1,602 vehicles in May 2020, down by 60 percent YoY, but up by 58 percent from the previous month. In a statement, Mazda is seeing positive signs that the automotive market is gradually recovering, given increased sales in every segment.
  • Mazda has announced that it will resume two-shift operations at all its plants in Japan in July. Its plants in Thailand and Mexico will be operating on limited days. Mazda expects global production volume in July to increase by 50 percent from June, according to a MarkLines report citing Nikkan Jidosha Shimbun. 
  • Auto parts maker T. Krungthai Industries Public Ltd (TKT) has over THB500 million ($16.15 million) worth of backlog order in hand, waiting to be delivered to customers, according to MarkLines, citing a Thun Hoon report. TKT expects sales to recover in the second half of 2020.

Indonesia:

GAIKINDO, Indonesia’s automotive manufacturers association, reported Indonesia’s total vehicle sales in May 2020 were 3,551 units, down by 95.8 percent YoY due to the coronavirus. Meanwhile, the government is encouraging innovation through its Industry 4.0 program which includes the automotive industry and EV industry.

Although sales have experienced a downward trend since the beginning of the year, PT Suzuki Indomobil Sales (SIS) remains optimistic that it can increase its market share this year. From January to April 2020, Suzuki’s market share increased to 11.5 percent, compared to 9.3 percent in the same period last year. (GAIKINDO)

Vietnam:

According to the Vietnam Automobile Manufacturers’ Association (VAMA), automobile sales declined 30.6 percent YOY to 19,081 units in May.

Vietnam ratified a free trade agreement with the European Union that will cut or eliminate 99 percent of tariffs on goods traded between the Southeast Asian country and the bloc, and provide Vietnam with a much-needed post pandemic boost, according to Bangkok Post. Vietnam will have a transition period of up to 10 years for some imports, such as cars. With this, insiders predicted the domestic automobile market will prosper in the last six months of the year and domestic automakers have the opportunity to develop as well as compete with imported cars. (VNS)

  • Toyota Vietnam has announced sales of 4,311 units in May 2020, up by 48 percent from April. (Auto Daily)
  • VinFast Production and Trading LLC announced in April that the inauguration and start of production of its automobile manufacturing plant will take place in June 2019 instead of September 2019 as previously planned.

Malaysia

Malaysian Automotive Association (MAA) reported new car sales decreased 62.2 percent YoY in May. They expect sales volume for June 2020 to be higher than May as businesses resume after restrictions for economic activities are lifted and sales tax exemption announced by the government.

Furthermore, The Malaysia Automotive, Robotics and IoT Institute (MARii) estimates a 28 percent drop in new car sales in 2020 due to the Movement Control Order (MCO) brought about by COVID-19, and that a minimum 500,000-unit total industry volume is needed in 2020 for automotive businesses’ continued survival.

  • The Malaysian government has agreed to reduce the sales tax for new vehicles for six months until December to revitalise the market, according to a report from New Straits Times.
  • For the 1Q 2020, UMW Holdings Berhad registered a lower revenue as disruptions caused by the COVID-19 pandemic led to lower sales in the automotive and equipment businesses.
  • In May 2020, PROTON sold 5,676 vehicles, accounting for an estimated market share of 23.3 percent, but down by 46.5 percent compared to last year. Sales in May, however, was a 73 percent improvement over that of March. For January to May 2020, PROTON’s sales volume declined by 23.3 percent, while the overall industry dropped by 48.7 percent over the same period.
  • Perodua has sold 52,920 vehicles as of the first five months of 2020, giving it a 41 percent market share against an estimated year-to-date total industry volume of 129,401 units.

Philippines:

Operations of both assembly plants and dealerships have resumed with easing of restrictions. The Chamber of Automotive Manufacturers of the Philippines (CAMPI) and the Truck Manufacturers Association (TMA) reported a 84.6 percent decrease in May car sales YoY. According to Philippine Star, however, May’s production figure of 4,788 units was a vast improvement over the 133 units manufactured in the previous month. Furthermore, CAMPI expects total vehicle sales to drop 20 percent in 2020 due to the pandemic.

  • Auto parts makers have renewed their call to the government to support local parts manufacturing by implementing higher duties on vehicle imports and prevent small and medium parts makers from closing shop amid the COVID-19 pandemic, according to a Philippine Star report.
  • Comprehensive Automotive Resurgence Strategy (CARS) program
    • Government introduced Incentives to encourage investments in vehicle manufacturing, while manufacturers have to manufacture at least 200,000 units of enrolled vehicle model within six years
    • According to the Department of Trade and Industry (DTI), volume of vehicles required to be produced will remain unchanged even if automakers are unable to reach the target

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COVID-19 Updates: Auto Makers Revving Up Production To Drive Market Recovery

COVID-19 Updates: Auto Makers Revving Up Production To Drive Market Recovery

In the wake of the continuing impact of the COVID-19 pandemic, global light vehicle sales in 2020 are now forecast to drop to 69.6 million units, 22 percent lower than in 2019, with risks to the forecast still skewed to the downside, according to IHS Markit.

In Southeast Asia, sales of new vehicles in the region’s six largest markets combined are estimated to have declined by over 19 percent to 700,528 units in the first quarter of 2020, according to GlobalData. Thailand saw first quarter sales down 24 percent as its economy reeled under the impact of much-reduced travel and tourism. Malaysia Q1 vehicle sales were down by 26 percent and Vietnam saw a slump of almost 32 percent.

Although 2020 is seeing a setback for the automotive sector in ASEAN markets, long-term prospects for the region remain very strong. GlobalData’s analysis points to strong indicators for long-term demand as motorisation rates rise with high economic growth—especially in Indonesia with its increasingly transportation hungry population of 273 million. Its market of around one million new vehicles a year is forecast to double to two million vehicles a year by the end of this decade.

In addition to strong long-term market prospects, the automotive manufacturing industry in the region benefits from relatively low costs, favourable government policies for investment, as well as free trading regimes for vehicles and components, according to GlobalData.

Here’s a roundup of the latest activities being done by automakers, parts manufacturers, and government units in ASEAN to drive the industry’s market recovery after the COVID-19 pandemic.

Thailand

  • According to the Federation of Thai Industries (FTI) automotive club, Thailand’s automotive production is likely to plunge 37 percent to 1.33 million units this year and could drop even further to 50 percent (to one million units) if the pandemic lasts till June.
    • Proposed measures to boost demand includes: a car trade-in scheme, 50 percent excise tax reduction until the end of the year and a delay in enforcement of Euro 5 emission standards
  • According to MarkLines Data Center, April vehicle sales in Thailand declined by 65 percent YoY to 30,109 units
  • Japan’s Isuzu Motors Ltd forecasts that demand for pickup trucks and other light commercial vehicles in Thailand is likely to fall 35 percent this year
  • Nissan Thailand has resumed production in its first Thai plant as well as plant 2 (on 1st June)
  • Mercedez-Benz Thailand plans to postpone the launch of the EQC BEV in Thailand to 2021 amid the coronavirus crisis, according to MarketLines, quoting a report from (Thansettakij)
  • Summit Auto Body Industry Co. Ltd (SAB) will continue with its project despite the pandemic, investing THB810 million—mostly for its plant expansion and purchase of new machines. SAB initially targeted THB8.8 billion for its 2020 revenue; but because of COVID-19, it revised down its forecast by 50 percent. (Prachachat Turakij)
  • TAPMA (Thai Auto Parts Manufacturers Association) expects exports of Thailand’s auto parts to drop in the second quarter of 2020 (2Q 2020) following the temporary suspension of car manufacturing plants both in Thailand and overseas amid the COVID-19 pandemic. However, recovery is expected in Q3 as plants are reopening (Marklines).

Indonesia

  • Gaikindo, Indonesia’s automotive manufacturers association, have reported that Indonesia’s total vehicle sales in April 2020 were 7,871 units, down by 90.7 percent YoY due to the coronavirus, according to MarkLines. January-April sales were down by 28 percent to 244,762 units.
    • In terms of automaker sales in April, Toyota was down by 90.3percent YoY to 2,056 units (26.1 percent market share); Daihatsu was down 91.8 percent to 1,330 units (16.9 percent market share); Honda was down 89.8 percent to 1,183 units (15 percent market share); Suzuki was down 86.4 percent to 1,042 units (13.2 percent market share); and Mitsubishi was down by 89.7 percent to 808 units (10.3 percent market share).
  • The Indonesia Coordinating Ministry for Economic Affairs has announced incentives in the form of stimulus, amounting to IDR 70 trillion, for the automotive industry players to minimise the impact of COVID-19.
  • Toyota Motor Manufacturing Indonesia (TMMIN) is set to resume operations this month after it suspended manufacturing operations from May 1 to June 1, 2020.
  • PT Toyota Astra Motor also announced to restart production around the same time, according to VietnamPlus.
  • PT Astra International: Its automotive sales drop by 91.2 percent year-on-year (yoy) in April to 3,807 units, according to data from the Association of Indonesian Automotive Manufacturers (Gaikindo).
  • Suzuki Indonesia: Gradually resumed operating the plant starting on May 26, 2020. Before this, Suzuki Indonesia had temporarily suspended factory operations from April 13 to May 22, 2020.

Vietnam

  • According to a report from the Vietnam Automobile Manufacturers’ Association (VAMA), the automotive market suffered a decline of 36 percent over the first four months and only 11,761 units were registered in April 2020
    • Sales of passenger cars decreased by 40 percent, commercial vehicles by 26 percent and specialised vehicles by 16 percent, compared to the previous month.
  • On May 20, the government approved a plan to reduce auto registration fees by 50 percent until the end of the year which could help domestic enterprises recover and stimulate car consumption for domestically-made cars over imports

Malaysia

  • Malaysian Automotive Association: Malaysia recorded just 141 sales of new automobiles in April, down 99.7 percent compared to the same period in 2019 (49,939 units)
    • Estimates point to a plunge to 400,000 this year. Sales for the first four months of the year declined 45 percent to 106,600 autos.

Philippines

  • The Chamber of Automotive Manufacturers of the Philippines (CAMPI) expects vehicle sales to decline by at least 20 percent in 2020 amid the COVID-19 lockdown. Earlier, the Association of Vehicle Importers and Distributors Inc. (AVID) expects total vehicle sales to decline by 40 percent. Total automotive sales covering vehicles sold by both CAMPI and AVID reached more than 410,000 units last year.
    • Toyota Motor Corp. restarted production in the Philippines, Pakistan, and Russia, on May 22. Toyota’s vehicle plant in the Philippines, which produces models such as Vios, resumed operations on a single shift on May 18. The six overseas plants where Toyota has not resumed plant operations yet include Indonesia, Brazil, India, Venezuela, Portugal, and Czech Republic.

 

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UMW Holdings Contributes RM1.3 Million To Fight Covid-19 Including Internally Produced PPE

UMW Holdings Contributes RM1.3 Million To Fight Covid-19 Including Internally Produced PPE

UMW Holdings Berhad has contributed essential Personal Protective Equipment (PPE) to be distributed to several Malaysian hospitals tasked with the screening and treatment of COVID-19 patients.

A total of 15,000 disposable headscarves, 10,000 gowns and 3,000 boot covers, all of which were produced internally at the Toyota Boshoku UMW manufacturing plant in Bukit Raja, Klang, will be distributed to hospitals, where PPE are essential in keeping healthcare workers safe. In order to distribute the PPE effectively, 7,000 disposable headscarves, 7,000 gowns and all boot covers will be delivered directly to the Ministry of Health, while the remaining 8,000 disposable headscarves and 3,000 gowns will be disbursed via NGOs such as the St John Ambulance of Malaysia.

Previously, on 15 April 2020, UMW Holdings had distributed 3,000 face shields to the Pusat Perubatan Universiti Malaya, Hospital Canselor Tuanku Muhriz UKM and Jabatan Kesihatan Kuantan, Pahang. The Group’s staff continues to produce the face shields internally in Shah Alam, targeting a total of 10,000 pieces.

UMW Holdings have also contributed blood pressure monitors, oximeters and stethoscopes to Hospital Sungai Buloh, besides previously collaborating with various reputable NGOs, such as MERCY Malaysia and Yayasan Food Bank Malaysia, to provide financial and livelihood support to various communities directly affected by the pandemic. Furthermore, UMW Holdings is part of the GLC Disaster Response Network, contributing ventilators and other vital medical equipment. In total, UMW Holdings Berhad has contributed RM1.3 million in aid to help fight the effects of COVID-19 on Malaysians.

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Metal Technology Expo 2020 Postponed Until Further Notice

Metal Technology Expo 2020 Postponed Until Further Notice

The organisers of Metal Technology Expo 2020 has announced that the event, originally rescheduled earlier for 2-5 June 2020 will be postponed until further notice.

The Malaysian health authorities have recommended the public to not organise any social gatherings above 50 people over the next six months or longer following the end of the Movement Control Order. The health authority believes that doing this will allow the country to break the chain of the COVID-19 outbreak. Hence, this recommendation will render any exhibitions this year to be deferred to a longer period of time.

In a statement, the organisers said:

“We will be informing you on new dates once the government authorities has provided us with approval to organise exhibitions again. Having said this, we will definitely be in contact with you to update on the progress on this matter.

In the interest of our exhibitors, visitors, supporters and suppliers, we reluctantly have made the difficult decision to postpone Metal Technology Expo 2020. We apologise for the inconvenience and sincerely hope that you understand our situation and we look forward to your business.”

 

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Automotive Manufacturing Developments In Southeast Asia Amid COVID-19

Automotive Manufacturing Developments In Southeast Asia Amid COVID-19

Amid the global economic slowdown in 2019, and the current COVID-19 pandemic, global vehicle sales forecast 2.5 percent fall in 2020 instead of the previously predicted 0.9 percent drop compared to 2019 (Moody’s Investor Service).

Here’s a roundup of the latest developments happening in the automotive manufacturing industry in Southeast Asia.

Thailand

  • Thailand’s 2025 Automotive Roadmap: The Government has drawn a plan to transform Thailand into a regional hub for electric vehicles by 2025
  • Auto parts sector will continue shrinking as car factories close or cut production and global purchasing power weakens. (Federation of Thai Industries)
  • Toyota Motor Thailand
    • Predicts that sale of domestic vehicles will drop 6.7 percent to 940,000 units in 2020
    • Extending of closure: Temporary suspensions of Thailand production operation in Samrong, Ban Pho, and Gateway facilities will continue until the end of April
  • Honda Automobile Thailand announced the suspension of completely built-up (CBU) operations in its vehicle production plants in Phra Nakhon Si Ayutthaya and Prachinburi provinces from March 27 until April 30.
  • Mitsubishi Motors
    • Halted production at three automobile and engine plants in Chonburi province temporarily from April 1.
    • BOI has approved Mitsubishi’s 5.48 billion baht ($167 million) electric and hybrid vehicle production plan project to renovate existing production lines at a plant in Laem Chabang Industrial Estate
  • Auto Alliance Thailand which makes vehicles for Ford and Mazda, and Ford Thailand Manufacturing has also announced they will be shuttering the factory for the time being.

Vietnam

  • Vietnam Ministry of Industry and Trade has forecast that most automakers will experience partial shortages during this time of crisis and sourcing from other markets would be difficult due to familiarity of technical standards of Chinese parts
  • Vietnam’s industrial production growth could drop 2.3 percent due to reduced imports of parts from China (VinaCapital)
  • According to Vietnam Automobile Manufacturers Association (VAMA), sales of members decreased 26 percent to 31,908 in end of February due to the impact of Covid19.
  • Vietnamese government has issued several incentives in the form of tax breaks, delayed tax payments, and land-use fees for businesses impacted by the COVID-19 outbreak.
  • Vingroup:
    • Produce (invasive and non-invasive) ventilators of all types and body thermometers to the domestic market.
    • With the capacity of VinFast and VinSmart factories, the group can produce up to 45,000 non-invasive ventilators and 10,000 invasive ventilators per month
    • VinFast have decided to temporarily cease their operations, starting on April 5
  • Toyota Motor Vietnam, Ford, Honda Vietnam, Nissan Vietnam and TC Motor has temporarily ceased vehicle productions.

Philippines

  • Fitch Solutions forecasted the country’s automotive industry to grow by 0.4 percent this year to 371,345 units, lower from its previous projection of 7.4 percent, due to negative impacts of the Covid-19 outbreak.
  • According to figures collected by the Association of Vehicle Importers and Distributors (AVID), sales across all segments—passenger cars, light commercial vehicles (LCV), and commercial vehicles—are down by 31 percent in January 2020 compared to the prior year. Overall, vehicle sales have fallen by 16.2 percent compared to the same period in 2019.
  • The Covid-19 crisis has delayed the rollout of the government’s Public Utility Vehicle (PUV) Modernisation Program, which aims to replace aging PUVs with more environmentally friendly Euro 4-compliant light commercial vehicles.
  • Honda Cars Philippines Inc. has shut down its production plant in Sta. Rosa, Laguna province. But, automobile sales and after-sales services will continue through Honda’s regional network.
  • Mitsubishi Motors Philippines Corp. (MMPC) has signed a Memorandum of Understanding with its five dealers to roll out a next-generation Showroom, DENDO DRIVE STATION which features solar power system and vehicle to home (V2H) equipment.

Malaysia

  • Malaysia has more than 20 manufacturing and assembly plants that produce passenger and commercial vehicles, as well as two-wheelers.
  • National Automotive Policy (NAP) 2020: incorporates three new advanced technology elements—Next Generation Vehicle, Mobility as a Service and Industry Revolution 4.0 and focuses on three strategies—for value chain development, human capital development as well as safety, environment and consumerism.
  • The following are the biggest beneficiaries of the NAP:
    • Perodua has purchased a total of RM43.5 billion worth of components from local suppliers, including RM5.4 billion in 2019, and targeted to spend RM6 billion for 2020.
    • UMW Toyota Motor Sdn Bhd’s Bukit Raja plant is equipped with automation, skilled manpower and the capacity to align with the government’s vision, with further investment to introduce more completely-knocked-down hybrid cars in the future.
  • Car sales have come to a stop since the Movement Control Order (MCO) was imposed by the government on March 18 and vehicle sales are expected to plummet in March and April. The automotive industry has been grounded to a halt with “nothing really moving”, according to Datuk Aishah Ahmad, Malaysian Automotive Association (MAA) president
  • Car production plants and after-sales services have also been shuttered during the 28-day MCO.
  • Total industry volume (TIV), which covers the sales of passenger and commercial vehicles, fell 5.3 percent or 2,249 units to 40,403 in February against the previous month due to delays in new model launches and the negative impact of the COVID-19 outbreak on consumers’ sentiments.
  • Sales volume for March 2020 is expected to be lower than February 2020 following restrictions due to the MCO, according to MAA.
  • The country is also bracing for a possible recession and dented consumer sentiments.

Indonesia

  • Covid-19 is pushing Indonesia’s automotive total industry volume in 2020 to 2008 levels (Globaldata)
    • According to Indonesian Automotive Industry Association (GAIKINDO), domestic vehicle sales volume in March 2020 declined by 20 percent as compared to February 2020: revised 2020 vehicle sales projection to 600,000 units
  • Honda Prospect Motor (HPM) will suspend car production at its factory in Karawang, West Java for two weeks starting from April 13, 2020
  • Hyundai Motor Manufacturing Indonesia (HMMI) has pledged to donate 50,000 sets of personal protective equipment (PPE), such as masks and coveralls, worth Rp 8.2 billion in stages for medical workers.
  • PT Suzuki Indomobil Motor halted its car production in Indonesia for two weeks (April 13 to 24) at three factories in Cakung, East Jakarta, Cikarang in Bekasi and Tambun in West Java, in an effort to curb the spread of the coronavirus.
  • Toyota Motor temporarily shut down production in Indonesia (from April 13 to 17), while subsidiary Daihatsu Motor Co. Ltd suspended work from April 10 to 18.
  • Nissan Motor Corp. will shut down manufacturing operations in Indonesia amid declining vehicle sales in the country.

Singapore

  • Hyundai Motor Company is establishing a Mobility Global Innovation Center in Singapore (HMGICs) to accelerate its innovation efforts and transformation into a smart mobility solution provider. The new 28,000 sqm innovative lab will be located in Singapore’s Jurong Innovation District and is set to be completed in the second half of 2022.

Myanmar

  • Suzuki Motor Corp.recently announced that its subsidiary in Myanmar, Suzuki Thilawa Motor Co. Ltd, will construct a new car plant in Myanmar. Scheduled to start operations from September 2021, the new plant will conduct welding, painting, and assembly of automobiles, and will be located at an industrial park located in the Thilawa Special Economic Zone.
  • Nikkei Asian Review has reported that several Chinese brands such as Soueast Motor and GAC will accelerate local production targets in Myanmar.

 

WE NEED YOUR INSIGHTS!

We would love to hear from you, our readers. We will use these insights in our series of articles on the impact of COVID-19 in the manufacturing industry.

  1. When do you expect the lockdowns to end in your countries/regions?
  2. What automotive manufacturing challenges are you currently facing?
  3. During this period of lockdowns and regional quarantines due to the COVID-19 pandemic, what manufacturing strategies are you planning to implement when we come out of this outbreak?
  4. Do you know of any other developments we might have missed here?

Do drop us a note at [email protected].

 

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NAP 2020 Drives Malaysia’s Automotive Sector

NAP 2020 Drives Malaysia’s Automotive Sector

The Malaysian government has launched the National Automotive Policy (NAP) 2020 which will contribute MYR 104.2 billion to the economy over the next decade as Malaysia aims to be the regional leader in the automotive sector. Three key technological elements are introduced in NAP 2020—Next Generation Vehicle, Mobility as a Service and Industrial Revolution 4.0. Furthermore, it will focus on three strategies—value chain development (enhancing competitiveness of domestic value chain), human capital development (developing local talent) as well as safety, environment and consumerism (promoting adoption of environmentally friendly technologies).

READ: Coronavirus Hits Automotive And Aerospace Supply Chains

“The proposed new Malaysian Vehicle Project will emphasise on research and development and incorporation of the latest technologies in order to be competitive in both domestic and global markets. New technology clusters as well as new expert workforce, especially in the field of automotive engineering would be developed consequently,” said Prime Minister Tun Dr Mahathir Mohamad.

READ: Thailand’s Roadmap To Become The Regional EV Hub By 2025

Accelerating the automotive sector will not only benefit car manufacturers, but also encourage development of new technologies that will complement other industrial sectors. “The technologies embedded within the car provide immense opportunities for related industrial sectors to break new grounds. Linkages to both upstream sectors such as steel, plastics and rubber and the downstream value chain demonstrate that the automotive industry is one of the most important and strategic contributors to the overall growth of the manufacturing sector,” he said.

 

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GENiE Smart Factory Solution Boosts Smart Manufacturing In Malaysia

GENiE Smart Factory Solution Boosts Smart Manufacturing In Malaysia

Galactic Advanced Engineering (M) Sdn Bhd has launched its cloud-based process intelligent solution—GENiE Smart Factory Solution, which aims to increase adoption of smart manufacturing practices in Malaysia and the region.

“Malaysian manufacturers need to embrace technology and be competitive worldwide. We can no longer be dependent on labour intensive manufacturing practices. It is essential for manufacturers especially SMEs to leverage on cyber-physical systems and cloud-based data to make informed business decision in order to increase productivity,” said Dr. Ong Kian Ming, Deputy Minister of Ministry of International Trade and Industry (MITI), during the launch. He hopes to work with the company to support Malaysia manufacturers in taking steps towards Industry 4.0.

GENiE Smart Factory Solution enables better decision making on the production floor through data analytics, by obtaining real process values and parameters of production operations. The solution address common problems encountered by manufacturers such as under-utilisation of machinery, production wastage, unpredicted down time risks and high usage of energy.

“It is a scalable investment to improve operations and more importantly to reduce downtime and financial losses from production interruptions. The savings from energy utilisation, reduction of wastage and better yield from the machines can be seen within months,” said Sakhtivel Narayanasamy, CEO of Galactic Advanced Engineering.

He is optimistic about the government’s commitment and efforts in driving adoption of Industry 4.0: “There has been much concept talk about Industry 4.0 and its power to revolutionise but we believe these concepts can be converted into applicable solutions like the GENiE Smart Factory that enables an innovative shift in manufacturing operations for the next three years.”

 

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Growth Of Malaysia’s Aerospace Industry

Growth Of Malaysia’s Aerospace Industry

Malaysia’s government has identified the aerospace industry as one of its new growth industries and aims to be the leading aerospace nation by 2030, with a targeted annual revenue of RM55.2 (US$13.5) billion. In 2017, the industry has recorded a total revenue of RM 13.5 (US$3.3) billion and aerospace manufacturing contributed to 48 percent of the revenue.

“The aim is to shift Malaysia’s economy from labour intensive to high value added, knowledge and innovation based economic activities with a focus on the services and manufacturing sectors,” said Minister of International Trade and Industry Datuk Darell Leiking

Many multinational companies have invested and established facilities in the country over the years which has also encouraged growth if the local supply chain. Furthermore, Airbus and Boeing will be delivering an estimated of 16,000 aircrafts to the Asia Pacific region by 2037. With this increased supply of aircrafts, greater support for aerospace manufacturing and MRO activities will be needed.

“The positive development has also spurred the government to view the aerospace industry as a critical sector which offers abundant opportunities for the transfer of advanced technologies in engineering, electronics, composite materials, system integration, MRO (maintenance, repair and overhaul) and industry-led Research & Technology,” said Darell.

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MASI Soars With Hypertherm’s X-Definition Plasma System

MASI Soars With Hypertherm’s X-Definition Plasma System

Air travel has come a long way since the days of the Wright Brothers. Raising standards for aviation safety is a paramount concern globally with more than 100,000 flights taking to the sky daily, and proper servicing and maintenance play a critical role in ensuring the safety of crew and passengers. One such company that makes certain proper servicing equipment and maintenance facility on aircrafts can be carried out smoothly is Muhibbah Airline Support Industries Sdn. Bhd. (MASI).

Headquartered in Selangor, Malaysia, MASI manufactures a variety of products for the aviation services sector, including maintenance docking systems, aerobridges, and aircraft parking guidance systems. A subsidiary of Muhibbah Engineering (M) Bhd., the first company in Malaysia to achieve ISO 9002 certification in the construction sector, MASI places strong emphasis on quality and safety in every aspect of its operations.

A Versatile And Efficient Solution For Quality Production

MASI’s strength lies in the design and construction of a full range of aircraft maintenance docking systems. These systems are specialised platforms positioned around the aircraft to allow maintenance personnel to access all areas of an aircraft, providing an efficient and safe working environment. An effective aircraft maintenance docking system enables the maintenance team to perform their jobs better, which then assures people of aircraft functions and safety.

The team at MASI had a good grasp of the aviation industry’s needs, and its innovative systems featured state-of-the art functions. To bring them to fruition, the company found the need to invest in a cutting technology that is capable of producing high-quality cut parts at fast speeds, yet require little or no post-production processes. The company decided on Hypertherm’s X-definition plasma cutting system, the XPR300, which would allow them to boost production processes significantly without compromising on quality.

The XPR300 features the latest X-Definition plasma technology which improves its ability to tackle high-precision applications, surpassing the expectations of modern plasma cutting systems to produce high-quality cuts in the most cost-efficient manner on a myriad of metal types and thicknesses. In addition, the system boasts of Hypertherm’s True Hole technology that provides MASI with the ability to easily fabricate bolt ready holes down to a diameter-to-thickness ratio of 1:1. These advanced features of the XPR300 system addressed MASI’s requirements of a cutting solution that could handle a variety of plate thickness (ranging from 4 mm to 40 mm) and various types of shape and hole cutting, leading to improved consumable life, and reduction in production times and wastage in materials. This has allowed MASI to register between 10 to 20 percent in cost-savings – depending on material thickness.

Apart from the cutting-edge features on the XPR300, MASI was also won over by Hypertherm’s high level of service standards. From the early stages of decision-making through to after-sales assistance, the Hypertherm team offered timely response and their full support to address MASI’s every concern. Edward Wong, Technical Manager at MASI, shared, “The XPR300 system has proven to be stable and reliable so far – allowing us to improve our productivity and quality, and we expect that it will also eventually help us to reduce the manpower required in the production of parts for the various systems and equipment.”

The Future Of MASI And Hypertherm

On MASI’s plans to further improve their processes, Mr. Wong added that the company is looking to purchase more cutting machines, and also plans to explore more advanced solutions such as robotic plasma beam cutting lines. “Judging from the results we’ve seen so far, we’re optimistic that Hypertherm’s advanced cutting solutions will support our endeavour to improve the agility and profitability of our business. We also look forward to satisfying our customers with consistent and quality products that will allow their maintenance teams to perform their tasks well and ensure safe functioning of aircrafts,” added Mr. Wong.

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