Oz Auto Industry Seeks Stronger Trade Ties to Thailand

BANGKOK – In automotive terms, Thailand is most readily associated with the Japanese auto makers that arrived here some 50 years ago, intent on making the country’s auto industry a focal point for their outsourcing operations.

Since then, Ford and General Motors also have identified Thailand as a key hub. Now, although their historical relationship has been less than close, globalization is forging strong links between the Australian auto industry and Thailand.

Geographical proximity, Thailand’s rapid economic advances and opportunities stemming from a recent free-trade agreement have both nations’ automotive industries looking to exploit common advantages.

Underscoring that concept was the recent “Australian Auto Week in Thailand,” an event organized by Austrade, the government division that manages trade missions; it was the country’s largest-ever auto mission to Thailand.

The mission was headed by John Conomos, who is credited with the consolidation of Toyota’s Australian operations into the clear market leader. The Australian government has designated the 40-year industry veteran its ‘Automotive Envoy.’

Australia presents a unique case study in the automotive world: a mature market that only produces small volumes. Yet, it enjoys government understanding of the value of the industry, and is one of little more than a dozen countries that can manage vehicle manufacturing from design to showroom.

Conomos believes Australia has significant skills and research-and-development capabilities to offer ambitious Thailand, which is lacking in these areas, while the Asian country can provide low manufacturing costs and a rapidly expanding production base in return.

There already is a degree of cooperation between the two countries. Conomos cites the new Ford Ranger pickup, which was designed in Australia and is built in Thailand for global markets, including Australia – currently the world’s largest export market for Thai-built pickups.

Conomos acknowledges weaknesses within Australia’s auto industry, which the government-sanctioned ‘Vision 2020’ study is looking to address. “The strong (Australian) dollar is impeding growth,” he notes, adding the market is saturated.

Nevertheless, Conomos is confident that R&D is a plus for Australia, saying, “In our universities and R&D, we have new technologies on the verge of commercialization. Our investment climate is quite aggressive; we believe we can offer much more than is on offer in (Thailand).”

Supply chains were a key topic of discussion at the Australia/Thai trade conference. Ford’s Australian purchasing chief, Carl Parkin, says he is “confident we have a supply base that can take advantage of Thailand.”

Automotive-interiors manufacturer Futuris opened its second plant in Thailand last month, and Carl De Koning, its newly appointed executive for business development, agrees with forecasts that Thailand will, in the near future, reach 2.5 million units of annual production.

De Koning predicts wider regional growth for his company, continued expansion in Thailand and eventually an opportunity to export back to Australia.

Another Australian company eyeing more opportunities in Thailand is Test-Trak, which manages on-the-road test and evaluation programs for several OEMs.

“We have been working regularly with a Thai client for over five years,” Managing Director Doug Gould tells WardsAuto. “For us, the opportunity to see most of the Thai automotive manufacturers at once was the prime attraction” of the trade event.

“Test-Trak is in discussions with a manufacturer about a major project in Thailand,” Gould adds. “The tours of vehicle manufacturers and Tier 1 suppliers that were part of (Australian Auto Week) helped us better understand the environment in which our project will operate.”