By Dominic Whiting
BANGKOK, Dec 18 (Reuters) - Nail down two benches to turn it into a bus. A few wooden slats makes a double-decker pig transporter. Fling over a tarpaulin roof and the melon crop and family are shielded from the sun for a trip to the market.
For practical-minded Thais, the pick-up truck is king of the road, and of the dirt track, an all-purpose vehicle perfect for a still predominantly agricultural country.
And for global players Toyota , Isuzu , Nissan , Ford and General Motors , Thailand is becoming a regional manufacturing hub and a fast growing market that they hope other developing Asian countries will mimic.
"Considering the Thai market is the biggest for this class, it made the most sense to produce in Thailand," said Toyota spokesman Tetsuo Kitagawa.
"Within Asia, the most likely export markets for pick-up trucks made in Thailand would be the surrounding countries such as Indonesia, Malaysia, the Philippines and Vietnam," he said.
The potential rewards are high because the Asian market has become the only bright spot in the current auto industry gloom. But it is no easy ride for Thai-based exporters because of protectionism in many Asian countries and growing competition from China.
According to Bangkok-based consultants Automotive Resources Asia, around a quarter of the estimated 1.2 million pick-up trucks made globally are bought by Asians, with most of the rest sold in the United States.
Nearly 60 percent of Asian sales last year were in Thailand, with China accounting for 28 percent.
DETROIT OF THE EAST?
The Thai enthusiasm for pick-up trucks is fuelling volumes of foreign investment conspicuously lacking from other Thai industries since the 1997-98 Asian economic crisis.
Manufacturing in Thailand is scheduled to reach 750,000 units annually by 2006, from around half a million now.
Toyota Motor Co, Japan's biggest car maker, plans to double its Thai output capacity of pick-ups to around 200,000 a year by mid-2004.
Isuzu Motors Ltd, increasingly reliant on pick-up trucks to fuel its growth having been pushed out of the sports utility vehicle (SUV) market, says it will increase production in Thailand to 250,000 units a year by 2006 from 147,000 now.
And with assembly lines cranking up, a raft of Thai and foreign parts makers are also stepping up their operations.
Bridgestone Corp , Japan's largest tyre maker, said last month it would spend 17 billion yen to build a third tyre plant in Thailand to meet growing demand for truck and bus tyres, particularly in Asia.
Manufacturers believe they are on the cusp of massive growth.
Industry consultancy Autopolis says Asian vehicle sales will grow 12 percent this year while total global sales will shrink.
In 2005, an estimated 14 million new vehicles will hit Asia's highways, enough to ring China bumper to bumper one and a half times.
But even if pick-up trucks make practical sense for developing Asian countries, sales are likely to be capped by protectionist government policies for some time to come.
TAX MAN STEPS IN "The choice vehicle in most Asian countries depends on the tax system," said Graeme Maxton, managing director of Autopolis.
"In Thailand, cars are taxed more heavily than pick-up trucks but in Malaysia the tax system favours cars to protect Proton. And in India and China, local manufacturers are protected."
The main export markets for Thai-made pick-ups are Saudi Arabia, South Africa and Australia.
But manufacturers are hoping a Southeast Asian free-trade pact, the ASEAN Free Trade Area (AFTA), will eventually allow pick-ups produced in Thailand to infiltrate all regional markets.
But this will take time, with Malaysia planning to delay import duty cuts on vehicles, scheduled for next year, until 2005 to prepare state-controlled Proton for competition.
A planned free trade agreement between the 10-member Association of Southeast Asian Nations (ASEAN) and China in the next decade is likely to boost Thai-made pick-up trucks further.
But in the long term, Thailand could lose investment to even cheaper Chinese manufacturing.
"All these investments in Thailand make sense because of AFTA, but then 10 years down the line there'll be massive competition from China," Maxton said.
"Thailand is going to have economies of scale in pick-ups for a very long time," he said.
"But other manufacturing in Thailand will begin to push away when China starts exporting and eventually the pick-up manufacturing will start to move there too." (Additional reporting by Chang-Ran Kim in Tokyo)