Bangkok signals to overtake
THAILAND is fast becoming the new Detroit, as car-makers flock to the central Asian country to build everything from light cars to pick-up trucks and SUVs.
In 2005, Thailand was the second-biggest country of origin for Australian vehicles with 84,831 sales, behind Japan with 378,758 and ahead of South Korea (78,719).
It has since been marginally overtaken by South Korea but its exports to Australia have also increased dramatically to 96,603 in the first seven months of this year, compared with Japan’s 213,575.
In 1998, Honda Australia became the first company to import its passenger cars from Thailand.
It has taken 12 years for the Japanese brand to feel secure enough in its Thai quality to boast about the products. Last week, Honda took five journalists to Bangkok to visit its factory at Ayutthaya, 80km north of the nation’s capital, to assure customers about its build quality.
Honda Australia boss Satoshi Matsuzawa says there has ‘‘never been any resistance to our cars being built in Thailand because they are built by Honda’’.
About 80 per cent of Honda vehicles sold in Australia are made in Thailand.
Honda Australia spokesman Mark Higgins says ‘‘more and more manufacturers are coming here (Thailand) to build cars’’.
They include most pick-up trucks sold in Australia, the Mazda2, and soon more small cars from Ford and Suzuki.
The Thai-Honda Australia story began in 1998, with 778 vehicles.
In 2005, the free trade agreement between Australia and Thailand and the shift of Jazz production from Japan to Bangkok dramatically increased the exports to 14,071.
In 2007, Thai’s Honda exports to Australia tallied 51,424, before dropping off substantially during the global financial crisis. This year they are expected to reach 40,197.
But that is still a small proportion of the total 240,000 annual capacity of the Thai Honda factory, which occupies 851,800sq m and employs about 5000 Thai staff and 80 Japanese managers.
They work two to three shifts a day, with two weeks’ holiday a year and free meals provided by Honda.
But working conditions are not idyllic, with Thailand’s oppressively hot and humid climate mitigated in the body and frame plant by opening a whole wall to prevailing winds instead of using airconditioning in an effort to ‘‘save electricity’’.
Honda Automotive Thailand Corporation vice-president Makoto Morii says the plant is 50 per cent automated, compared with Japanese factories with 90 per cent automation.
‘‘We use more hand welding because the salary is lower here,’’ he says.
‘‘Instead of investing in expensive machinery, we can hire more people here. In terms of mechanical skill, the Thais and Japanese are of the same level.’’
AUTOMATIC: The Honda factory in Thailand can make 240,000 cars a year and employs about 5000 workers.