Thailand taking center position as ASEAN auto parts hub

As the eighth largest automotive production base in the world, the Association of Southeast Asian Nations (ASEAN) has the potential to be one of the biggest auto parts and accessories sourcing hubs.

ASEAN – consisting of Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam – has a population of about 526 million and a combined GDP of US$1.27-trillion. The region has an annual growth rate of more than five percent. The Car parc is in the region of 26 million which indicates a car penetration rate of about 25 per 1000. To promote the region, Thailand’s Department of Export Promotion (DEP) is hosting an ASEAN Pavilion at the biennial Thailand Auto Parts & Accessories (TAPA) 2010 exhibition. For the first time, the

DEP is offering complimentary booth to 10 ASEAN countries, 5 booths each, a total of 450 SQM. are provided for all 10 ASEAN countries. Until now, there are 5 countries scheduled to attend the exhibition, including 6 booths from Malaysia, 7 booths from Singapore, 3 booths from Vietnam and 5 booths from The Philippines. With a highly infrastructure and located close to Asia’s biggest markets, Thailand is positioning itself as a natural regional logistics hub. Geographically, Bangkok is closer to the heart of Asia than any other Asian city aside from Shanghai and Taipei. As a group, ASEAN -member countries are positioning themselves to provide a wide range of components and assemblies to OEMs. Large OEMs such as Toyota and Honda have recognized the importance of ASEAN and have a strong supply chain management presence in the region. Thailand is already the largest production base in ASEAN and the country has naturally become the nerve center of the supply chain for most automotive companies.

In recent years, has earned an impressive reputation as the ideal platform for both local and international companies to showcase their auto parts, accessories, products and services. To ensure the continuous success of TAPA 2010, the Department of Export Promotion (DEP), Ministry of Commerce, and the Royal Thai Government embarked on a nine-city road show from September to November 2009 to promote the exhibition. The road shows were held in Kuala Lumpur, Manila, Hanoi, Jakarta, Chongqing and Shanghai, Singapore, Dhaka and New Delhi. The road shows were attended by about 300 delegates and officials from DEP, Thai Auto-Parts Manufacturers Association (TAPMA) and consulting firm, Frost & Sullivan, were present to brief about overall automotive industry, The Role of Thailand in supporting automotive and auto parts business, as well as the cooperation in automotive industry, auto parts and accessories to the attendees on TAPA 2010. Industry players present at the road shows included Key Safety Systems, Bosch, Magna Intier China, Valeo Asia, Delphi, Shanghai Automotive Parts Circulation Trade Association, Shanghai Federation of Industry and Commerce Autoparts and Accessories Chamber of Commerce, Geely Auto,Federal-Mogul Corp, Cherry Auto, Tata Motors, Denso India, Hino Motors, Hero Honda, Mitsui, Takata, Perodua Vendors Club, Proton Vendors Club, APM Auto Electrics, Armstrong, Delloyd Ventures, Tracoma, PT Selamat Sempurna, ADR Group, PT Astra Nissan Diesel Indonesia and GIAMM (Indonesia Motor Vehicle and Motorcycle Equipment Industry Association).

Vice president of the Thai Autoparts Manufacturers Association (TAPMA), Achana Limpaitoon, said ASEAN would have an even stronger role to play when it became a Free Trade Area (FTA) this year. “The lifting of trade barriers will help ASEAN to be market competitive against major players such as China”. ASEAN’s automotive players had the competitive edge to produce quality parts at attractive prices, she added.

According to Limpaitoon, Thailand is keen to work closely with other ASEAN countries to promote and develop the region as an auto parts and accessories sourcing hub.

“Thailand has the strongest original equipment and manufacturing (OEM) and replacement equipment manufacturing (REM) capability in Asia, with more than US$6-billion in annual export value,” she said. TAPA 2010 is an excellent platform to enhance cooperation in the automotive industry as well as to strengthen the market potentialwithin ASEAN. TAPA is expected to bring together more than 300 exhibitors across the ASEAN area at the Bangkok International Trade and Exhibition Center in Bangna, Bangkok. More than 16 000 visitors from ASEAN, Africa, India, Bangladesh, China, Japan, the Middle East, Europe, Latin America and the United States are expected to attend the event.