Thai Motor Expo Subdued, But Auto Makers Hopeful

BANGKOK – Thailand’s 28^th annual International Motor Expo this month understandably is more subdued than past auto shows.

With the country, economy and automobile industry all reeling after the region’s most devastating floods in half a century, the upbeat atmosphere that usually permeates the show is noticeably absent. Instead, the event more closely reflects the industry’s flat-out efforts to get back on its feet and look to the future.

Simply staging the show at the Impact Exhibition Center here has taken a mammoth effort by the organizers, given this area of the city has borne some of the worst flooding, with tracts of property still swamped by water just a few miles away.

The Motor Expo, which runs through Dec. 12, is the first major event in the capital city since the floodwaters arrived more than a month ago. It’s free this year to the 1.2 million expected visitors, compared with 1.6 million in 2010. The organizers are predicting 25,000 vehicle bookings during the show, a big drop from the 33,058 seen last year.

The bond between Thailand and the string of foreign auto makers that build there is strong, and each has rallied round to provide practical and financial help to dealers, customers and other residents affected by the floods. As such, more emphasis has been placed on donating funds and less on traditionally lavish displays.

Domestic-car sales plunged 42% in October, or 30,000 units, compared with prior-year. Still, an air of optimism and a spirit of rebuilding prevail, as nearly all the auto makers and parts makers see stalled production springing back to life. Indeed, most expect to be reasonably up-to-speed by Christmas.

Among Thailand’s car makers, Honda has been hardest-hit due to the location of its two plants, which were directly in the path of the floodwaters. It is just starting to sift through the damage, and there is no projection as to when assembly operations might resume. The best estimate is that plant startups are months away.

But the auto maker remains fully committed to Thailand. “The flood crisis cannot deter the unwavering commitment we have to Thailand and its people,” Pitak Pruittisarikorn, executive vice president of Honda Automobile (Thailand), says in a statement.

“We remain confident of Thailand’s potential as a production hub for Honda vehicles, which will serve both the domestic and global export markets. We want to reaffirm that Honda will not relocate to other countries.”

However, it will “take time to restore our manufacturing plants,” Pitak adds.

The timing couldn’t be worse for Honda, whose Brio joined Thailand’s eco-car party in the spring. But the Japanese earthquake and tsunami and the Thai floods have stopped it in its tracks.

Nissan now has had a clear run as the market’s eco-car leader, with its March (Micra) on sale for a year and a half. The auto maker also is the first to market with an eco-sedan, the March-platform-based Almera, which since its October launch has drawn 10,000 orders.

At the show, Nissan displays its Nuvu urban-car concept and introduces model-year upgrades on several of its existing vehicles.

General Motors’ Chevrolet brand primarily is focused on its new-generation Colorado small pickup truck, being exhibited in crew-cab format for the first time. A new 2.0L diesel engine is expected to strengthen Captiva cross/utility vehicle demand, and a couple of limited-edition models celebrate the brand’s centenary.

To add some spice, Chevrolet also is showing off two previously unveiled future transportation concepts: the EN-V and Miray. Martin Apfel, president of GM Thailand, sees the EN-V as “bringing vehicle autonomy to life,” while the Miray, a small sportscar, “proves that hybrid doesn’t have to be dull.”

The Colorado has 2,000 orders so far, and Apfel reveals parts localization is at more than 60% and “trending” towards 70%. He expects to see “at least an additional three points of market share” next year.

Ford is having a strong year in Thailand, driven by the Fiesta B-car, which has taken a 10% share of its segment since it was launched locally a year ago. Sales were up 185% through October, the auto maker says.

Hoping for another hit, Ford is using the show to debut its locally built 1-ton Ranger pickup’s new top-grade Wildtrak model, which focuses on lifestyle users. The Wildtrak is on sale here and in other export markets such as Australia.

The auto maker also debuts the Fiesta Sport+, which features premium leather, voice controls and chrome accents. It will slot above the existing Fiesta Sport, which already accounts for 80% of Ford’s Thai sales.

With good inventories of the Fiesta, Ford is confident it is well-positioned in the post-flood landscape. The auto maker has lost about 30,000 units of production due to the floods.

Proton’s Managing Director Zainal Tahir expresses confidence in the local market with the message: “Proton is committed to grow in Thailand.” The Malaysian auto maker is “going onto the second phase of our plan, which will involve “new products that appeal to Thai customers.”

Environmental efficiency is at the top of the list, he says, noting when Proton’s hybrid goes into production in 2013, it will be sold in all Asian markets, including neighboring Thailand.

Korea’s Hyundai is pitching hard for growth in Thailand. The presence of the i-Flow concept at the auto show, unveiled in Geneva last year, provides a “wow” factor. Hyundai also introduces the ’12 Tucson CUV.

Choichi Yuki, managing director-Mazda Sales Thailand, believes the flood “crisis will be short-lived and (the) situation will return to normal shortly.” Mazda has grown dramatically in 2011, he adds, and is raising its sales projection to 40,000 units, up 15% from year-ago.

The Mazda2 has been the growth driver with 26,000 sales year-to-date, up 15%, Yuki says. He expects bookings of 2,500 cars at the show and notes Mazda can deliver them with no delays.

Mazda’s new-generation BT-50 pickup is introduced at the show by Takasuke Kobayashi, program manager. The truck is built locally alongside the Ford Ranger at the auto makers’ AutoAlliance joint-venture plant. The global 1-ton market is about 2 million vehicles a year, he says, and Mazda has a 60,000-unit share, allowing plenty of scope for growth.

The underlying fundamental of the BT-50 project was practicality, with a shift toward more of a passenger-car direction, with the team looking to C/D-segment cars as a benchmark, Kobayashi says.

Suzuki is gearing up to debut its Thai eco-car next March. At the show, Takayuki Sugiyama, president-Suzuki Motor Thailand, confirms the new plant, located in Rayong province, is completed.

Suzuki sales in the country have grown sharply, albeit from a low base, up 160% so far this year. With the arrival of the eco-car, Suzuki is targeting 200% growth in Thailand for 2012. Its longer-term aim is a 5% market share by 2015.

French auto maker Automobiles Peugeot launches its 508 at the show, as it chips away at the 10-member Association of Southeast Asian Nations. Its regional assembly hub is Malaysia, where the auto maker sold 3,000 units last year.

But Lionel Faugeres, Peugeot general director-ASEAN Countries, says the auto maker is considering a return to complete-knocked-down assembly in Thailand and Indonesia. “ASEAN markets are more than ever a part of our plans,” he says.

Peugeot models currently arrive completely built-up and numbers are small. But 125 deliveries through October still means sales have more than doubled this year, compared with 2010.

“Our objective is to strengthen our business (in Thailand),” Faugeres says. Peugeot expects to double Malaysian sales this year as well, and “the trend is the same” across other ASEAN markets, “even if the volumes are lower.”