Posts tagged cars
Will Indonesia overtake Thailand as the automotive manufacturing center of Southeast Asia? Thanks to increased investment from overseas carmakers, government incentives and a growing domestic demand for vehicles, many think so.
Thailand has traditionally been the country of choice for international manufacturers. Despite its own large middle-class customer base and strong production figures (1.64 million vehicles in 2010) it faces new pressure from rising costs and a new government-set minimum $10 daily wage for workers. Companies produced a total 650,000 vehicles in Indonesia and sold 764,000, but forecasts predict both numbers could top a million by 2013.
The Jakarta Globe reports:
Indonesia is already expecting more than $1 billion in investment in the automotive sector starting this year. Nissan recently announced a $250 million expansion plan; Suzuki has announced an $800 million expansion; Chrysler a $100 million expansion; Daihatsu just carried out a $246 million expansion; and BMW a $12 million expansion. India’s Tata also expressed interest in building a production base in Indonesia.
Peugeot and General Motors have also announced plans to assemble vehicles in Indonesia. The government also intends to provide tax breaks for investments over Rp1 trillion (US$117 million), though no formal arrangement has been made yet.
Indonesia’s auto manufacturing base is in Bekasi and Karawang, near Jakarta and the government-set minimum wage of $8 may see Thailand-based companies chase lower costs. As always, Indonesia’s infrastructure inadequacies will be an issue and the country would need to address them before it could become a serious global export leader, an analyst said.
source & article: The Jakarta Globe
Malaysian auto parts manufacturers have spent years building a reputation for product build quality and supply reliability, exporting their products to several automakers around the world. Appealing to Japanese automakers, however, is another story entirely. A contract with a major manufacturer there offers lucrative rewards and increased stature, but Japanese thoroughness and taste for flawless quality present extra challenges to suppliers.
Some Malaysian companies were making inroads into the Japanese market even before the 11 March disasters in Tohoku damaged supply chains. The two countries signed a five year Economic Partnership agreement in 2006, with an auto industry component providing a skills training center in Malaysia and a number of trade shows.
Since March, many Japanese companies have expressed a desire to diversify their risks by teaming up with manufacturers in other Asian companies and Malaysia has found itself in a prime position. Trade agencies JETRO and MATRADE are aiding firms to find each other and achieve profitable outcomes on both sides. (more…)
Things have been going well for BMW in Malaysia for the past year, with the launch of its first Malaysian-assembled model in 27 years and sales of a record 4,509 vehicles. The company is now considering local production for a wider range of models.
Malaysia now has fifteen BMW dealerships across the country, including four new ones in Kuala Lumpur, Kuantan, Butterworth and Johor Baru. Traditional models like the smaller BMW 3 series and full sized BMW 7 series had record sales, while the company broadened its range of offerings with the BMW 5 series, the BMW X1, BMW X5, along with the S1000RR Superbike and the new MINI Cooper range.
The BMW X1 is assembled in Kulim, Kedah. BMW is confident Malaysia’s auto industry is recovering from the recent slump, as the sector recorded a Total Industry Volume (TIV) of 598,200 units, beating 2005′s record of 552,316 units.
Having official “National Car” status, as defined by the Malaysian government, can bring big benefits to a company. With a 50% exemption from local excise taxes, official status makes these cars far cheaper than non-Malaysian alternatives.
There are currently four local Malaysian car companies: Proton, Naza, Inokom and Perodua. Arguments over just how Malaysian these companies are, however, could see Proton alone retain National Car status and prices for the other three manufacturers soar.
There is apparently a push underway to require the other companies to make a greater commitment to local parts manufacture and R&D to keep their status. Perodua, the largest producer by sales, is part-owned by Japan’s Daihatsu and Mitsui. Foreign companies such as Toyota and Honda, who assemble vehicles in Malaysia with foreign-made parts, are taxed at import rates.
Moves to take away Perodua’s status may cause a backlash from Japanese shareholders and the country’s embassy, who see the joint venture as one of the most successful. A decision will be made once the government has finalized its National Automotive Policy (NAP) later this month.
article & source: Business Times