Highlights of the year’s major events affecting the Asian Markets:
Indonesia surpasses Thailand as the biggest market in the Association of Southeast Asian Nations in 2011, selling 890,410 units, up 16.4% from 2010, consulting firm Frost & Sullivan says in February.
A stable local economy is one factor expected to help Indonesia’s 2012 deliveries rise 6.5% to 948,500 units. The Indonesian Auto Manufacturers Assn. early in the year predicted 940,000 deliveries but scales that down in June to 875,000, blaming new loan rules that require buyers to put 30% down on new-car purchases.
However, the association later talks of a 1 million-unit 2012, as sales through July reach 630,000 units, up 26% from like-2011.
Toyota Thailand, the tabulator for new-car sales in the Southeast Asian country, expects the Thai industry to roar back after debilitating flooding in 2011 sinks new-vehicle sales. Thai vehicle sales are expected to hit a record 1.1 million units in 2012, a 38.5% jump from prior-year’s 794,081.
The Federation of Thai Industries’ Automotive Industry Club reports an 11.4% drop in vehicle output in 2011, to 1.46 million units, due to flooding as well as reverberations from the March Japan earthquake and tsunami.
In January, China’s National Development and Reform Commission and the Ministry of Commerce makes finished-car production an “approved” foreign-investment activity rather than an “encouraged” one. The move is a result of overcapacity, but government officials vow the change won’t affect existing manufacturers.
The government is encouraging foreign investment in research and development centers, “projects with better market prospects and higher returns,” an official tells the Xinhua news agency.
Malaysian sales in 2012 are expected to be relatively flat, rising just 1.2% to 612,000 units, according to a January analysis by Frost & Sullivan. However, by the midway point, sales in the country rise 1.4% as Thailand-flooding-related supply disruptions subside. The Malaysian Automotive Assn. predicts a record 615,000 deliveries for 2012.
Ford in June announces it will halt production at its Santa Rosa, Laguna, Philippines, plant to improve efficiencies and costs of its regional manufacturing. Local output is to be replaced with imports from Thailand.
“The biggest issue (Ford is) facing in trying to bring new investment to the Philippines is the size of the local supply base,” Ford Association of Southeast Asian Nations President Peter Fleet tells the Malaya Business Insight newspaper.
Due to the lack of local suppliers, Ford can’t meet 40% ASEAN content in locally built vehicles. Ford previously stopped production in the Philippines from 1984 to 1999.
While Ford isn’t officially confirming the move, it appears increasingly likely the auto maker’s vehicle manufacturing operations in Australia will be shuttered.
Ford Australia President Bob Graziano in August says “We believe we can have research and development without manufacturing." Ford global design chief J Mays, also in August, tells WardsAuto: “I don’t think having a manufacturing plant has anything to do with whether we decide we are going to continue to engineer and design cars here or not.”
Sales of locally built Fords continue to spiral downward in 2012, with deliveries of the venerable Falcon model plunging 30% through July. Production of the car is due to be reduced in November, from 209 units daily to 148, a level seen as unsustainable.
China’s SAIC inks a pact with Australian importer WMC Group in July. The first SAIC models set to arrive in the country in October include LDV vans and minibuses. Other SAIC models will launch in Australia in 2013. WMC previously imported Foton trucks from China but quit due to a variety of factors, “most significantly uncompetitive pricing,” it says.
Through August, the Asia/Pacific region’s share of global sales increases to 43.0% from 41.1% year-ago, to 23.5 million of the 54.5 million vehicles sold globally, WardsAuto data shows.
General Motors’ Opel brand enters the Australian market for the first time in late 2012 with light-, small- and medium-segment entrants, which account for 70% of passenger-car sales in the country. The new Astra Hatch and Tourer are the launch models.
GM’s move is seen putting pressure on its Holden subsidiary, with Opel and Holden fighting for the same buyers. Opel believes its European engineering provides a clear distinction, despite the Astra and Holden Cruze sharing the same Delta II architecture, identical wheelbases and a common 1.4L drivetrain.
South Korea’s five auto makers, Hyundai, Kia, GM Korea, Renault-Samsung and Ssangyong, all have new labor deals in place by September. Korean labor unions ratify deals at each OEM with similar terms, including an increase in monthly wages, bonuses and reduced work hours.
Hyundai workers’ pay package includes two of the biggest bonuses received by a union in Korea: 350% of basic monthly salary, a 9 million won ($7,952) incentive bonus and a signing bonus of 150% of monthly salary plus 600,000 won ($530).
DRB-Hicom, which takes over Proton in January from Malaysian government agency Khazanah Nasional, continues to express interest in an international partner as of late September.
The government’s Bernama news agency reports DRB-Hicom intends to return Proton to the No.1 sales spot in 2012, raising the auto maker’s target from 167,000 units to 200,000. DRB-Hicom Managing Director Khamil Jamil tells Malaysia’s The Edge newspaper a foreign partner is critical to improving Proton’s poor reputation for quality.
In March, General Motors, Volkswagen and Mitsubishi reportedly were negotiating a partnership with Proton before the talks were moved to the back burner. As of early October, and after years of negotiations with a variety of auto makers, no foreign partner is in place. DRB-Hicom said it would unveil a Proton turnaround plan in November.
Toyota denies reports it will shift some production from China to Thailand after widespread anti-Japan protests over a territorial dispute between Japan and China harm the auto maker’s Chinese sales and force it to shutter its local plants in late September.
“We will not relocate our (factories) out of China, and the protesting is expected to be short-lived,” Toyota Thailand Vice Chairman Ninnart Chaithirapinyo is quoted as saying. Toyota’s sales in China tumbled 49% in September, more than all but Mitsubishi’s 63% plunge among Japanese auto makers selling in the country.