India losing Auto exports to Thailand?

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cars at a port

We reported yesterday how the port of Ennore alone exported almost half a million cars out of India. This situation might just change now as Thailand is fast emerging as a serious competitor, as production constraints and quality forces manufacturers to consider favoring the Southeast Asian country.

Ford for its Fiesta and Suzuki for its Celerio is planning to move production to Thailand for exports landing in developed nations. The Ecosport is unlikely to be exported from India to North American markets and production might be move to the Thai unit by 2016.

“Manufacturers are looking at Thailand due to the production constraint in India, whereas Thailand provides better quality production. Reportedly, the Ford Ecosport manufactured in Thailand provided better NVH levels”, said Mayuree Chaiyuthanaporn, senior analyst, IHS Automotive Asean.

Thailand is a major base for production of small cars and pick ups, while total capacity is expected to reach 3 million by 2019. Thailand also boasts of better infrastructure and technology, while manufacturing is supported by the government in a big way, the Thai board of Investment offering fiscal and non-tax incentives for investments, exemption or reduction of import duties on raw materials and machineries, coupled with corporate tax exemptions. although natural calamities and political instabilities also need to be factored in.

Thailand also has the highest number of suppliers in the ASEAN region, whereas Ford and Suzuki both have manufacturing units in Thailand as well as India and both are expanding production capacities with units in Gujarat, however concede the fact the Thailand provides better logistics and supply advantage.

On being asked a Ford representative called these news speculations and assured on Ford’s commitment to make India as their Export hub and a centre of excellence for small cars and low displacement engines. Meanwhile passenger vehicle exports grew by 6.09% last fiscal according to SIAM.

Source: DNA

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