Thai Auto Industry Veteran Bullish on Future

A veteran industry leader sees Thailand’s auto sector building up to 4 million vehicles a year in the not-too-distant future.

Former Thai Automotive Institute director Vallop Tiasiri says if nothing goes wrong, auto production in 2012 should approach 2 million vehicles.

"This year many of the new assembly plants are not running at full capacity, whether it is Ford, Mitsubishi or Suzuki, so (reaching) the 3-million production figure is not a difficult equation anymore,” says Vallop, who recently ended 12 years at the helm of the institute.

The institute conducts research used to form auto-industry policies and facilitates its development.

Thailand built its industry on so-called product champions – first the 1-ton pickup, then the eco-car, Vallop says. He suggests the industry’s third champion product should be low-risk, such as vehicles using alternative energy including hybrid and electric power.

He tells The Nation English-language newspaper he believes the combination of government policy and the private sector’s driving power can keep the Thai auto industry on a successful course.

“But we need to wait for growth in the domestic market, too,” he says. “Looking at the market, sales could rise to 1.5 million vehicles per year within the next five years, and the ownership ratio would be four people to one vehicle.

“Meanwhile, production would rise to 4 million vehicles per year. This is the same mechanism that took place in Korea and is happening in Thailand right now.”

Vallop says the opening of the Chinese and Association of Southeast Asian Nations (ASEAN) markets will help Thailand achieve the 4-million-unit production figure more quickly.

“It is expected that China will lift import duty on automobiles in 2015 and once China opens, ASEAN will be ready to open as well,” he says.

“When that happens there will be major restructuring of the mechanisms in the Thai auto industry once again. But that means that everyone must quickly adjust themselves to the regional trade mechanism that is about to take place, especially the parts makers.”