‘Pakistan’s auto sector can benefit from Thai model’

KARACHI: Pakistan’s auto industry can benefit from Thailand auto industry’s model to accelerate growth and strengthen its vendor base, Thailand Automotive Institute (TAI) Chairman Vichai Jirathiyut said in a meeting with a group of Pakistani journalists during their visit to the institute.
“In 1998, TAI was appointed by the Ministry of Industry, government of Thailand to carry out operations in developing and promoting the automotive industry," he said.
TAI has put together the third Master Plan for Automotive Industry (2012/16) in order to stress the importance of emission, as well as to help raise the potential of related industries to motorisation such as aviation, maritime and rail.
Jirathiyut said that today Thailand is one of the world's largest automotive producers. In 2011, it was ranked at 11th in the world with the production of 1.4 million units, while the top three include China with 18 million, Japan with nine million and the US with seven million.
"The vision according to the third Master Plan for Automotive Industry (2012/16) is that "Thailand is a global green automotive production hub with strong domestic supply chains, creating high value-added for the country."
Thailand is all set to be the hub of electric buses, trucks, passenger cars and bikes.
The Thai prime minister has approved prototype E-buses and may be next 10 years would be for E-cars, he said, adding that the Ministry of Science and Technology has initiated the idea that the government should come with Eco-friendly buses for public transportation and it has been suggested for that to turn the idea into reality it should begin with the public buses.
He also said that the duties on used cars is very high and those who are importing have to get their vehicles certified by the laboratories after these vehicles were tested to meet the Euro IV standards.
He also emphasised that the government is encouraging Eco-cars alternative energy and environment-friendly vehicles and the government has approved a policy of tax on emission standard, which will be implemented in 2016. It means that the government is encouraging more and more hybrid cars and taxation will be done on emission standards and not on the engine size. The hybrid vehicles will pay less tax, he said.
Jirathiyut said that Thailand is fulfilling its vehicles demand locally for regular passenger cars and commercial vehicles; however, imported vehicles cost more due to higher taxes.
"It shows Thailand’s position as a global automotive producer that wants to raise its capability with high-level technology, develop eco-friendly products, help Thai auto-part makers to become part of an important global supply chain that is eco-friendly, and to create value-added products by being an important global manufacturing base," he said.
In order to meet the deadline of Euro IV emission standard the government has ensured the availability of the Euro IV fuel and a year ago it has set the deadline for the fuel.
The chairman said that the Thailand automotive industry's Vision 2021 is a designation of the direction in which the industry will be steered, topping up on the success from the second Master Plan for Automotive Industry (2007/11), which was aimed at making Thailand the automotive production center of Asia that is supported by a strong auto-part industry.
On a question asked by journalists about how Pakistan can benefit from TAI’s knowledge, he said, it is important to note that each country has its own circumstances, priorities and culture. However, Thailand is open to sharing information on its automotive policies.
Such information can be considered for application in the local context in Pakistan. Perhaps a bilateral discussion on this can be organised in the future.
An example of a topic that could be shared is how Thailand promoted the production of local vehicles. Twelve years ago, Thailand had the requirement that 40 percent of the components in vehicles must be locally-made. At present, Thailand has moved away from enforcing such standards, but has been promoting local production of environment-friendly 'eco' cars, which are more competitive, he said.
Presently, he said, the Thailand automotive industry has grown dramatically; especially, in terms of additional investment from the private sector in order to raise competitiveness, as well as to raise production capacity for the domestic and export markets.
Jirathiyut said that Thailand is one of the leading exporters of automobiles in Asia and mostly to the Middle Eastern countries where commercial vehicles such as buses and trucks are exported.
He said that 90 percent motorbike sales are in Asia and Thailand is one of the major consumers of bikes. Japanese brand rank highest in this segment.
The other brands are European, American, Chinese and Indian; however, Italian brand Ducati is also a preferred choice among other Western brands, he said, adding that the demand for Ducati can be gauged with the fact that it has set its first foreign plant in Thailand.
The success story of Thailand's auto sector is because of the consistent policy since the last 10 years, which has helped the sector grow.
The strong supply chain has further boosted the sector with more than 1,500 automotive parts suppliers and producing 92 percent local content, he added.