Rubber Journal Asia Automotive Industry
Different strokes to hit growth targets in Asia In the highly competitive global automotive
It also forecasts that China will b e i n f o r a maelst rom compet it ion ag ainst forei gn ma rket s t hat will increase incent ives t o g ain ma rket share b y eng ag ing local aut omot ive ma kers. This year, growth pace will be slo w e r b y 2 5 % , compared to the average in the past 1 4 y e a r s , even t houg h t he indust ry cont inues t o expa n d . The group said that China, in ord e r t o maint ain it s st anding as an aut omoti v e superpower, needs t o increase it s fo c us on R&D by leveraging on government s u p p o r t . Presently, automotive makers allot l e s s t h a n 2 % of t heir revenues on R&D, which is merel y h a l f t he g lob al averag e.
sector, Asia asserts dominance in the field pitting against the rebounding US. Looking at China, India and the ASEAN bloc, each has succeeded in weathering challenges in varying levels through the strategies employed. But which strategy calls the shots, asks Angelica Buan in this report.
I nstitutio nalised suppo r t f o r g r o wth i n In d i a ndia’s aut omot ive sect or cont inues t o sh o w K- b a se d r e s earc h firm L M C A utom o t ive st reng t h, wit h US-b ased mark et ana l yst p r e d i c t s t h at global automotive sales will Research and Markets stating in a re c e n t r e p o r t c l i mb 2 . 4 % t o 8 2.7 m illion th is year. T h e car sales t hat t he indust ry ’s t urnover will rea c h U S $ 2 0 0 b o o s t c a n h e l p pull up rubber prices especially b illion t hroug h 2016. It also indicat e d t h a t f o r t h e t o p A s i an rubber producers of Thailand, most g lob al OEMs have est ab lished presen c e I n d o n e s i a a n d Malaysia, which account for 67% in India amidst a limit ed supply b ase, w h i c h i s o f g l o b a l o u t p ut. Demand for rubber, mostly for attributed to low production volume s . t y r e s , w i l l i n c r ease and reduce the surplus by According to the report, Maruti S u z u k i , 6 1 % t h i s y e a r , as th e th ree c ountries c ont inue Hyundai and Tata Motors collectivel y a c c o u n t t o st o c k pi l e r u b ber, c u t d own trees an d reduce for 76% of t he passeng er car mark et , i n t erms of e xpo r t s t o b o o st p ric es . volume, and only suppliers wit h st ro n g l i n ka ges M e a n w h i l e , global consultancy firm Ernst to the Asian OEMs have easier acces s t o o r d e r s . & Y o u n g , i n i t s recent market report on Light Aut omot ive mak ers lik e F ord Motor a n d Ve h i c l e s, f o r e c as ts a s ignific ant trans ition for Hyundai Motor also use India as a lo w - c o s t t h e se c t o r i n t h e A SE A N region , owing to t he vehicle production hub and a spring b o a r d t o f l o u r i s h i n g e c o nomic activity and strengthened further expan s i o n i n A s i a . p u r c h a si n g po w er. India’s rapid expa n si o n i s A l s o c i t e d i n the report “….car sales boost can aligned with t h e n a t i o n a l i s a 1 0 . 6 % C AG R in an help pull up rubber prices Aut omot ive Mi ssi on e i g h t - y e a r pe r i o d s tarting Plan’ s projecti on t h a t by f r om 2 0 1 1 , c u l minating to especially for the top Asian 2016 t he sect o r w i l l h a v e 4 . 1 m i l l i o n u n i t s by 2019, of rubber producers…” account ed for more t h a n w h i c h , m o r e t h an 40% will 10% of India’s GD P a n d c o m e f r o m I n d onesia and employ ed 25 m i l l i o n mo re 3 3 % f r o m T h a i l and. people than it did in 2006. Wit h t he Nat ional Elect ric Mob ili t y M i ssi on M o r e R & D t o a c h ieve goals in Ch in a Plan in place, more technologically- e n g i n e e r e d h i n a ’ s m i r e d economy is gradually bouncing tyres, which are safer and may redu c e r o a d b a c k a n d veh ic le s ales , inc lud ing buses and accident s b y 5%, are b eing int roduce d , c a r s , a r e e x p e c ted to increase by 5%, according according t o MF F arooqui, Secret ary of t h e to t h e C h i n a As s oc iation of A utom obile Depart ment of Heavy Indust ry . M a n u f a c t u r e r s (CAAM). It says that total However wit h all t hat it has g oing, t h e a u t o m o t i v e s a l es, including passenger and country’s efforts to promote the loca l c a r c o m m e r c i a l v e hicles climbed 4% to 5% last year indust ry are not clearly drawn up in t h e n ew to a n e st i ma t e d 19 m illion units . T h e as sociat ion Union Budg et for 2013-2014, g iven t h a t t h e e x p e c t e d s a l e s to recover this year at an increased excise dut ies imposed on most cat egori es 7%.
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5 MARCH / APRIL 2013
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Rubber Journal Asia Automotive Industry o f im po r t e d c a rs rem ain “…Thailand still holds its 28,400 unit s last yea r, up u n c h a n g e d a t 1 2% . T hat 14% from 24,88 0 u n i t s a title as Asia’s Detroit….” y ear earlier, w h i l e sa l es of c o m b i n e d w i t h the high i n t e r e s t r a t e s a nd increasing light commerci a l v e h i c l e s d i e se l pr i c e s, sales of p as s enger c ars an d vans increased b y 9% t o 12,116 unit s. a r e e x pe c t e d t o gen erate m od es t growths. The free t rade ag reement cont inues t o st un t local vehicles sales whilst t he impor t ed on es a re T h a i l a n d : b e n e fiting from Japanese expecting sales growth of 10% this y e a r a m i d s t i n v e s t m e nt s t he count ry ’s economic prog ress. h e c o u n t r y s till h old s its title as “A s ia’s The Philippine’s 16-manufact urer s D e t r o i t ” a n d in fac t n ew inves tm en ts are aut omot ive sect or account s for 12% o f t h e p o u r i n g i n t o t h e sector, with the country’s local count ry ’s indust rial sect or out put , la ggi n g ca p a c i t y f o r e c a st to ris e 30% to 3 m illion unit s behind Thailand, Indonesia, Malaysi a , a n d by 2 0 1 5 , a c c o r d ing to M ac q u arie Grou p . The V iet nam. a u t o mo t i ve se c tor in T hailand is a key pillar in t h e c o u n t r y ’ s e conomy, growing at around 8.1% Malay sia: lev y cuts to pr o m o te inv e s t me n t s not her car mak ing count ry , Mal a ysi a ’ s of GDP. previous st rat eg y of imposing a d ut y of N i s s a n , J a p a n’s second-largest carmaker, 15% and 13.6%, respect ively , on import ed c a rs p l an s t o i n ve st U S$369 m illion to build a second from Japan and Aust ralia, b ack fired w h en t h e p l an t i n T h a i l a nd wh ile H on d a s aid rec ent ly country failed to generate further in v e s t m e n t s , i t w i l l i n ve st a b out 44.6 billion yen in a new losing out to incentive-friendly Thai l a n d . f a c t o r y w i t h a n nual c ap ac ity of 120,000 cars. Moreover, an excise t ax of b et ween 6 5 % a n d M e a n w h i l e , T oyota M otor, whic h has t hree 105% as well as 10% sales tax that ar e i m p o s e d f a c t o r i e s i n t h e c ou ntry, ex p orted 406,00 0 unit s t o provide local car mak ers Prot on Hol d i n gs o u t o f t h e 8 8 0 , 000 Hilux trucks, Fortuner SUVs, and Perusahaan Ot omob il Kedua a b et t er ed ge I n n o v a v a n s a n d other vehicles it built there last in the domestic market, are also hin d e r i n g y e a r , t h e c o m p any said. These sales have helped foreig n car mak ers. th e S o u t h e a st A s ian nation overtake China as However, t he count ry is reversing t h e T o y o t a ’s t h i r d- bigges t global p rod u c tion hub st rat eg y t o at t ract foreig n car manuf a c t urers last year. and will st art reducing dut ies b y 201 6 . T h e b i g g e st g rowth d river for T hailand’s a u t o mo t i ve i n dus try is the ex p ans ion of it s My anm ar : lo o king to incr easing its e x p ort s e x p o r t c a p a c i t y , plus the country has fewer y anmar, current ly rank ed seven t h i n l a b o u r i ssu e s c om p ared with China or India, rubber production in Southeast A s i a , s a i d Ko j i En do , an analys t at A d van c ed Research behind Thailand, Indonesia, Malaysi a , J a pa n . Laos, Camb odia and t he Philippines by t h e International Rubber Research and D e v e l o p m e n t P h i l i ppi ne s : a n ti-d u mp in g laws to h elp Board (IRRDB), is poised t o serve t h e d om e s t i c s a l e s h e P h i l i ppi nes is p lanning to s ubd u e t he int ernat ional aut omot ive mark et , no w t h a t i t s i m p o r t s o f vehicles from exports have incre a s e d b y a ma j o r Asi a n a u t om otive m akers t hird t his y ear. “…Myanmar has i n o r d e r t o p r o tect the local The count ry h a s i n du st r y . T h e Minis try of intensified promotion int ensified promot i on of i t s F i n a n c e a n d t h e Dep artm ent of rubber, which is c o m p a r a b l y of its rubber…” T r a d e a n d I n d u stry are jointly lower priced t han w h a t i s d r aw i n g mo ve s to file antioffered in other So u t h e a s t d u m pi n g c a se s agains t s om e A s ian automot ive mark et s. Having ent irely depended on export s ma k e r s. I t i s z e roin g in on ex p ortin g c ount ries to China last year, the country is loo k i n g t o t h a t d e c l a r e l o wer production value or sell their exporting more of its rubber to Sout h K o r e a , ca rs a t l o w e r pric es c om p ared to their home Vietnam and Singapore. It is also bu i l d i n g ma r k e t s, t h o u g h the m ove c an als o inc rease interests from Germany, Austria, De n m a r k a n d p r ic e s ( o f t h e i mp orted c ars ) for d om es tic New Zealand. c o n s u m e r s a s well as impact sales of imported The My anmar Rub b er Plant ers an d Prod uc ers ca rs. Associat ion (MRPPA) project s t hat th i s yea r A c c o r d i n g t o recent data, car firms including sales of rub b er will reach 150,000 t on n es, up Hy u n da i , C h e vrolet an d Subaru , s old a t ot al of from 95,000 t onnes last y ear.
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6 MARCH / APRIL 2013
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