Parking space shortage spells opportunity for Japanese firms

Scarce parking space in Bangkok is aggravating chronic traffic congestion, but some Japanese parking companies see the benefits of this scenario.

Nippon Parking Development Thailand is enjoying solid growth in operating revenue from more than 30 parking lots inside buildings in Bangkok.

The Osaka-based firm moved into Thailand in 2010 and subsequently implemented an automatic fare adjustment system, electronic signage to show space availability and surveillance cameras in parking facilities, while successfully curbing labour costs.

Some of t he parking lots under management have posted a 90% surge in operating revenue after introducing advanced initiatives.

The local arm has designated selected space as VIP and semi-VIP lots as part of driver-friendly services and improved profitability.

“In Bangkok, the number of newly registered vehicles has topped 400,000 units annually in the last several years, equivalent to over 1,000 cars per day,” said Kenji Kawamura, president of the Thai unit and executive vice-president of the parent company.

“The combined length of a car body, let’s say five metres each, amounts to a row of five kilometres daily,” he said.

Bangkok’s parking space is capable of accommodating 300,000-400,000 cars, against daily traffic volume of 4-5 million vehicles, according to Mr Kawamura.

Despite the government’s plan to add parking lots for 40,000 cars along railway lines by 2029, new parking supply is unlikely to catch up with surging demand.

One reason is that parking operations in Thailand don’t normally generate profits.

For example, office building owners offer a parking lot for free to tenants who each rent a floor space of 100 square metres.

Shopping mall operators also charge very low parking fees, even in the heart of the capital.

There is also talk of some parking workers embezzling parking fees. These factors discourage landowners from building parking lots.

“Parking fees should be raised in line with growing income to create better car parks,” Mr Kawamura said.

Under such circumstances, automated parking systems have become common in Bangkok because of rapid condominium development in recent years on the back of economic growth.

“Five years ago, I believe only one in 10 prime condos in Bangkok employed an automated parking system, but now eight in 10 do so,” said Kentaro Taki, general manager of Space Value Thailand, a local joint venture of Nissei Build Kogyo Co, a Japanese architecture design and construction firm.

IHI Asia Pacific Thailand, a local group arm of IHI Corp, a large Japanese heavy machinery and infrastructure firm, will install an automatic underground parking system at a condo in Bangkok next year.

The system features flexible parking lot layouts and efficient use of space and quick car retrieval, representing the first smart parking debut in Thailand, said Kai Miyake, general manager of sales and marketing at the Thai arm.

Meanwhile, Nippon Parking’s Thai unit teamed up with TC Car Solutions Thailand, an auto leasing joint venture of Tokyo Century Corp, to launch a car sharing service at parking facilities in late August.

The parking operator is considering extending the sharing service to other facilities if demand rises, part of efforts to raise awareness of the shift from car ownership to car use.

“Building quality parking is no longer good enough, and we need to correlate parking with information technology and car sharing services,” said Hiroshi Horiguchi, managing director of IHI’s Thai arm.