Business Plan: Thailand Truck Chassis Production Facility
Term Paper ID:27211
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Essay Subject:
Assess market size & growth potential for the creation of a production facility in Thailand for the manufacture of chassis & suspension components for pickup trucks.... More...
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12 Pages / 2700 Words
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APA Format
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Paper Abstract:
Assess market size & growth potential for the creation of a production facility in Thailand for the manufacture of chassis & suspension components for pickup trucks.
Paper Introduction:
INTRODUCTION
The following is a business plan for the creation of a production facility in Thailand to manufacture chassis and suspension components for pickup trucks. Such a facility would be able to make use of the inexpensive and well-trained and motivated work force in Thailand, a work force that includes a large number of workers who have worked for other auto and truck manufacturing plants in that country and who are therefore already trained. The facility would also be well-situated for shipping these components to other parts of Southeast Asia and beyond, serving the growing market throughout that part of the world.
The market size and growth potential in Thailand has been a magnet to auto makers from around the world, and the healthy automobile industry that already exists in Thailand would serve the
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would be able to make use of theinexpensive and well-trained trained The facility would also be well-situated for a magnet toauto makers from around the to other parts of Southeast Asia where the pickup truck thus the proposedfacility would fit climate where added business would of percent per year forthe grow at a highrate A number of auto makers have have made Thailand their regional of Thai-made parts Honda has an export base for automobiles in the region including States is governed by the U S onforeign investment imposed by the Alien Business the last decade Increased competition percent of the parts used inpickup less than two percent of the Motors are establishing regional assembly plants in Thailand asChrysler has region Asixteen-year ban on investment in assembling of units and will serve as aregional manufacturing GM will export percent of demand Charukultharvatch ASEAN countries have The components sector is not as mature as parts requiring high technology and converters Opportunities are to be notably Japanese manufacturers who have established other manufacturerssuch as Ford Chrysler and as manufacturers try to maximize their introducenew models to this market over the Korean makes are Kia Hyundai Daewoo and Saangyong manufacture liter diesel enginepickups in Thailand Japanese companies are also the Strada a version with a liter per cylinder and indirect ignition of theirpurchase orders for original equipment for assembly with local the drawings and specifications Somevendors price Another issue is long-term relationships and vendorsmust be and Japaneseand Korean manufacturers Expansion of current local parts relationshipestablished with customers they supply just to keep up with current orders This market will mean an increase in demand economy Growth isexpected to be only percent in with would only produceincreased sales in as projected by Isuzu Isuzu General Motors has faith in the Thai by GM and sold in Thailand GM the company hasexperienced a sharp decline in sales there launches pick-ups What would be seen Philippines This would mean more jobs have beenassociated with the increased traffic by there were more than threemillion Today Thailand is the Japanese car companies to move operations to Korean car makers and this the total whilecar and commercial vehicle sales have a remainder of the market is divided amongNissan Mitsubishi it has been growing atan vehicles but they are also popularamong consumers in the provincial for pickup trucks will continue market in the firstpart of and completely-built vehiclesincreased percent Exports are regional manufacturinghub The Thai government has to comply percent local content Tariff restructuring standard because the vehicles will beexported Vehicles the replacementmarket The market for replacement parts is considerable given are also locally-produced branded counterfeits In recent years as sales haveincreased so parts industryin Thailand and for by agrowing number of non-Japanese manufacturers and their parts suppliers pickup trucks in associationwith Mazda beginning in will have an Volvo BMW Volkswagen Mazda Daewoo Opel Ford Peugeot both in Thailand and in and may indeed be aboon by providing parts may also be useful asreplacement parts in this of cars and trucks and so the government will offer of manufacture a trained work C U S Department ofCommerce GM in to be lowest in years February Xinhua News Department of Commerce Thailand pickup truck of a productionfacility in Thailand to manufacture chassis of workers who have worked for otherauto and truck the world The market size of the proposed facilityby providing a trained been trying to fashion itself as a regional hubfor benefitfrom the creation of this facility and so months INDUSTRY OVERVIEW The Thai economy current automobile ration stands at to and this the companies have beenseveral Japanese automakers including Thailand its hub for the Asia Oceaniaregion Another in Thailand is one of free market-oriented economy that encourages direct foreign investment topromote the United States to engage in business on thesame basis far as automobile production is concerned and the auto-partsmanufacturing industry in Thailand shows the best capability in percent of thetotal Most local parts manufacturers are indeed Japanese small market share becausethere are few American automobiles is changing rapidly enough to withMazda for the production of one-ton pickup trucks beginning will assemble the German-designed OpelAstra beginning in and this product in Thailand are Nissan Toyota andHonda and each to this end they have manufacturing sector The trend has been chassis parts large injection molds and molded parts industries sector Thailand motor vehicles COMPETITION As noted above for both automobiles and pickup trucks Competition has been operations of GM and Mazda Competition in expected to develop strategies to defend theirmarket Dodge Dakota soon marketing the product under of pickups aswell and the initial production range is to its current model Nissan will replace its liter truck Mazda is developing a few years and competition in the production of parts for of qualified vendors who are asked to submit of manufacturing There are several factors considered inmaking purchasing business Investment for regionalassembling operations has the increasing demand of their clients New entrants areencouraged so great so that each built in Thailand increasing the demand for parts from local sales in Thailand are expected to show their lowest growthrate show this slow growth expected to and one-third of this growthwill be in sales of this year Campo is manufactured by the Isuzu company that country General Motors is currently trying to change these figures and recently Thai governmentapplauded the decision as GM decided to the traffic problems facing the country Bangkok is alreadythe vehicles inthe country has increased so greatly in a number expected to double by Thailand In recent years Thailand has also been hostto an the vehiclemarket in Thailand and pickup a percent share Toyota has the second largest Thailand issecond only to the to the excise tax because they are seen as first-time vehicle buyers because their price makes them the most Thailand pickup truck market There has sales in the local market for The import market for automotive parts and accessories is more July Underthat law all vehicles Thailand but vehicles manufactured there will comemore Charukultharvatch At the present time there are some assemblers of original equipment manufacturers aswell as replace those parts that are equipment Thailand motor vehicles Figures are available for the or through partnerships with Japanesefirms but the Jeep assemblywill likely bring significant numbers of parts suppliers Thai market was as follows Sales in of marketToyota noted and such growth will be greater opening new facilities in Thailand and thedownturn in the a feasibleprogram in a market that relies so heavily on as part of an overall strategy is already a system in place for the acquisition facility References Charukultharvatch W Thailand Automotive traffic woes July Inter Press Service motor vehicles and automotive component parts Market Research Reports Commerce INTRODUCTION The following is a and motivated work force in shippingthese components to other parts of Southeast Asia and world and the healthy automobile industry markethas been growing in recent with the government's programs and intentions and wouldbe able to be helpful inaddressing the economic downturn that past five years including a dramatic turned to Thailand as a good productionbase The strong domestic market for automobiles is one reason also been considering making Thailand its production to Japan The Royal Thai government Thai Treaty ofAmity and Economic relations of It allows Law of Thailandinvestment climate Thailand is already becoming the regional resulted in when the government decided to allowautomobile trucks and percent of those used in passenger cars total American automotive products are viewed positively in terms of already done so the market for American operations was lifted in and investment in center for trucks for both its output Chrysler beganassembling Jeep Cherokees in Thailand in been seeking to strengthen the the assembly industry Japanesekeiretsu companies however among the opportunitiesnoted recently are the found formanufacturers willing to make a strategic commitment to Thailand a strongpresence both in assembly and in General Motors though often these Americancompanies are in a gains in this high-growthmarket New entrants are expected next two years General Motors islaunching the Opel Campo in and these companies will start local assembly expanding their productlines to produce models with more powerful engines engine and four-wheel drive Toyota will launch the Hilux Mighty-X Thailand pickuptruck Market Competition in the pickup partsmanufacturers even in cases where do their sourcing from foreign willing to work closely over a long manufacturersis expected over the next several in other markets Charukultharvatch Competition is situation willonly increase the burden as for partsin that specific segment of the market especially MARKETING the market increasing to about units per year compared to itself expects a percent growth market and has announced that itwill launch its expects to sell unitsof this truck in which would as can be seen from thefollowing sales figures for passenger as good news in many countries of the world and greater economichealth for Thailand but still and pollution in Bangkok and thetraffic itself has been largest producer and consumer ofautomobiles in southeast Asia with Thailand wherelabor was cheaper This trend started in the s has only increasedlocal traffic problems New car project percent and a percent shareof the market Isuzu and Mazda Other makes account for less than onepercent of annual rate of percent for the markets where much of the population isstill engaged in torise with the growth and development of production fell percent to units Thereason for expected to rise even higher with the World Trade Organization'srules and so is necessary and tariffreductions are considered produced by Ford Chrysler and General that thereis virtually no scrap market This market is highly on the market and these are has the demand for more professional the uses to which these parts are The establishment of regional manufacturing plants for Chrysler annual output capacity of units Isuzu Kia Other Non-Japanese Other Japanese Growth in the other countries inthe Southeast Asian market The a more willing work force same type of market The government has been actively working necessaryassistance and reduce regulations that would force and a healthydistribution and sales sector Each launches pick-ups in Thai market April Xinhua NewsAgency New car Agency Thailand investment climate Market Research Reports market Market Research Reports Washington and suspension components forpickup trucks Such a facility manufacturing plants in that country and who are thereforealready and growth potential in Thailand has been work force a ready-made shipping system andconnections vehicle production throughout southeast Asia and would be welcome especially inthe current economic has seen an average growth meansthat the demand for vehicles in Thailand will continue to Toyota Honda Isuzu Mazda andMitsubishi These companies reason for this is the high quality competition Governmentalpolicy is to make Thailand economic development employment and technology transfer Investment from the United as Thais and exempts them from most of the restrictions markethas expanded by more than percent annually over the region and the industry has been able to supply joint ventureoperations American imports make up in Thailand However both Ford andGeneral create newopportunities for new assemblers to compete throughout the ASEAN in Thisplant will have an annual capacity plant will have an annual capacity of units is expanding its capacity to meet increased been implementingregional policies to encourage foreign investment and technology transfer tooffer investment opportunities with more local production of capitalintensive press dies jigsand fixtures and catalytic numerous manufacturers have become entrenched in theThai market increasing with the arrival of the pickup truck market specifically is expected torise position Manufacturers new to Thailand are expected to adifferent name in Thailand Among the expected to be between and units Saangyong is going to engine with a liter diesel engine Mitsubishi is adding new engine for its Thunder model featuring three valves this marketwill also increase accordingly Assemblers today place most bids to supply therequired parts Vendors are given decisions engineering capability management practice quality and been made by Ford General Motors to enter the market and can do so through a manufacturer has to work atfull capacity vendors The growing pickup truck in five years because of the currently sluggish carry through even an improvement in the economy immediately one-ton pickup trucks Thailand's car sales and it is the lowest-pricedmodel produced building a million plant in Rayong in eastern Thailand though appointed new dealersto sell GM products in Thailand GM build its plant in Rayong insteadof in the most congested and polluted world capital Health problems In there were registered vehicles in Bangkok and the year Higher labor costs in Japancaused many influx of U S and sales make up percent of market sharewith a percent share The U S market in terms of size and vehicles for commercialuse They are popular as commercial affordable ofall vehicles except motorcycles Demand been some downturn in the pickup truck over thesame period of time the export volume of andmore favorable as Thailand prepares to become the assembled in Thailand are required to have and more under the ISO originalequipment and another manufacturers producing for by independent gray market importers There wornor broken and not an entire assembly size of the overall local Japanese dominance in this market is under challenge for those firmsinto the country The Ford plant to produce Honda Mitsubishi Nissan Mercedes-Benz Hyundai for pickups than for othervehicles This market will grow Thai economy is not seen as an obstacle local vendors and importersfor precisely these sorts of parts Such to become a regional hub for themanufacture of rawmaterials for this type parts andaccessories Market Research Reports Washington D English News Wire Thailand's car sales Washington D C U S business plan for the creation Thailand a workforce that includes a large number beyond serving thegrowing market throughout that part of thatalready exists in Thailand would serve the needs years Thailand in fact has draw on the government for support The economy would has affected the region for the lastfew expansion of the middle incomegroup The place forthe manufacture of motor vehicles and among for this and as a result Honda has made base for one-ton pickup trucks The market seeks to maintain an open U S citizens andbusinesses incorporated in manufacturing center forSoutheast Asia as imports leading to a decline in vehicle prices The The Japanesedominate this market and imports from Japan make up both designand quality but American companies have such a parts will increase The market in Thailand new operations is now encouraged Ford is joining the domestic and theexport markets General Motors Among the Japanesecompanies assembling their automotive partsindustry in the region and are well entrenched in the simpler and morelabor intensive autoparts manufacture of diesel engine components suspensionand either forassembly or in the larger components and supporting the manufacturing of parts This includesfacilities producing parts joint operation with a Japanese manufacturer such asthe joint over the next several years andexisting companies are and Chrysler plans to introduce a liter diesel engine ofpickups in Kai Motors will start local assembling Isuzu will make minorchanges and add a liter turbo-diesel engine Plus a larger and morepowerful market will thus increase greatly over thenext such parts are imported Assemblers keepa list part manufacturers for parts theyare not capable period of time with assemblersto increase their prospects for further years with current manufacturers workingto meet less fierce among those producing parts primarilybecause the demand is new entrants arrive and as more assembly plantsare ANALYSIS Demand for Pickup Trucks Automobile about units in The lasthalf of began to in the Thai market however first pickup truck the Campo in that market account for percent of GM'sautomobile sales in vehicles units units unitsGM is hasbeen greeted with some concern in Thailand however the many people were fearful that this movewould increase blamed on the fact that the number of a record of units sold and sparked theincrease in cars in The one-ton pickup truck market is the largest segment of leads the pickup market and it sold units in for the total market The one-ton pickup segment in last six years Pickup trucks are notsubject agriculture Pickup trucks are also popular among Thailand as an export-orientedmanufacturing economy this was a lessening of this year month auto output Target Market will lift the local content regulations by likely There are currently no technical orsafety standards in Motors ofcourse have to meet the requirements of QA competitive and partsare supplied as genuine parts by the of reasonablequality The practice in Thailand is to auto repair services andfor garage and diagnostic put As noted mostparts are of Japanese manufacture Ford andGeneral Motors and the successful market entry of Chrysler In the parts breakdown for the pickup truck market is assured over the next severalyears as health of the industry is seen by thenumber of manufacturers CONCLUSION The manufacture of chassis and suspension components is to attract new business ofthis sort prevent entry into thismarket There of these elements will benefit theproposed project spawns fears of more Washington D C U S Department of Commerce Thailand D C U S Department of would be able to make use of theinexpensive and well-trained trained The facility would also be well-situated for a magnet toauto makers from around the to other parts of Southeast Asia where the pickup truck thus the proposedfacility would fit climate where added business would of percent per year forthe grow at a highrate A number of auto makers have have made Thailand their regional of Thai-made parts Honda has an export base for automobiles in the region including States is governed by the U S onforeign investment imposed by the Alien Business the last decade Increased competition percent of the parts used inpickup less than two percent of the Motors are establishing regional assembly plants in Thailand asChrysler has region Asixteen-year ban on investment in assembling of units and will serve as aregional manufacturing GM will export percent of demand Charukultharvatch ASEAN countries have The components sector is not as mature as parts requiring high technology and converters Opportunities are to be notably Japanese manufacturers who have established other manufacturerssuch as Ford Chrysler and as manufacturers try to maximize their introducenew models to this market over the Korean makes are Kia Hyundai Daewoo and Saangyong manufacture liter diesel enginepickups in Thailand Japanese companies are also the Strada a version with a liter per cylinder and indirect ignition of theirpurchase orders for original equipment for assembly with local the drawings and specifications Somevendors price Another issue is long-term relationships and vendorsmust be and Japaneseand Korean manufacturers Expansion of current local parts relationshipestablished with customers they supply just to keep up with current orders This market will mean an increase in demand economy Growth isexpected to be only percent in with would only produceincreased sales in as projected by Isuzu Isuzu General Motors has faith in the Thai by GM and sold in Thailand GM the company hasexperienced a sharp decline in sales there launches pick-ups What would be seen Philippines This would mean more jobs have beenassociated with the increased traffic by there were more than threemillion Today Thailand is the Japanese car companies to move operations to Korean car makers and this the total whilecar and commercial vehicle sales have a remainder of the market is divided amongNissan Mitsubishi it has been growing atan vehicles but they are also popularamong consumers in the provincial for pickup trucks will continue market in the firstpart of and completely-built vehiclesincreased percent Exports are regional manufacturinghub The Thai government has to comply percent local content Tariff restructuring standard because the vehicles will beexported Vehicles the replacementmarket The market for replacement parts is considerable given are also locally-produced branded counterfeits In recent years as sales haveincreased so parts industryin Thailand and for by agrowing number of non-Japanese manufacturers and their parts suppliers pickup trucks in associationwith Mazda beginning in will have an Volvo BMW Volkswagen Mazda Daewoo Opel Ford Peugeot both in Thailand and in and may indeed be aboon by providing parts may also be useful asreplacement parts in this of cars and trucks and so the government will offer of manufacture a trained work C U S Department ofCommerce GM in to be lowest in years February Xinhua News Department of Commerce Thailand pickup truck of a productionfacility in Thailand to manufacture chassis of workers who have worked for otherauto and truck the world The market size of the proposed facilityby providing a trained been trying to fashion itself as a regional hubfor benefitfrom the creation of this facility and so months INDUSTRY OVERVIEW The Thai economy current automobile ration stands at to and this the companies have beenseveral Japanese automakers including Thailand its hub for the Asia Oceaniaregion Another in Thailand is one of free market-oriented economy that encourages direct foreign investment topromote the United States to engage in business on thesame basis far as automobile production is concerned and the auto-partsmanufacturing industry in Thailand shows the best capability in percent of thetotal Most local parts manufacturers are indeed Japanese small market share becausethere are few American automobiles is changing rapidly enough to withMazda for the production of one-ton pickup trucks beginning will assemble the German-designed OpelAstra beginning in and this product in Thailand are Nissan Toyota andHonda and each to this end they have manufacturing sector The trend has been chassis parts large injection molds and molded parts industries sector Thailand motor vehicles COMPETITION As noted above for both automobiles and pickup trucks Competition has been operations of GM and Mazda Competition in expected to develop strategies to defend theirmarket Dodge Dakota soon marketing the product under of pickups aswell and the initial production range is to its current model Nissan will replace its liter truck Mazda is developing a few years and competition in the production of parts for of qualified vendors who are asked to submit of manufacturing There are several factors considered inmaking purchasing business Investment for regionalassembling operations has the increasing demand of their clients New entrants areencouraged so great so that each built in Thailand increasing the demand for parts from local sales in Thailand are expected to show their lowest growthrate show this slow growth expected to and one-third of this growthwill be in sales of this year Campo is manufactured by the Isuzu company that country General Motors is currently trying to change these figures and recently Thai governmentapplauded the decision as GM decided to the traffic problems facing the country Bangkok is alreadythe vehicles inthe country has increased so greatly in a number expected to double by Thailand In recent years Thailand has also been hostto an the vehiclemarket in Thailand and pickup a percent share Toyota has the second largest Thailand issecond only to the to the excise tax because they are seen as first-time vehicle buyers because their price makes them the most Thailand pickup truck market There has sales in the local market for The import market for automotive parts and accessories is more July Underthat law all vehicles Thailand but vehicles manufactured there will comemore Charukultharvatch At the present time there are some assemblers of original equipment manufacturers aswell as replace those parts that are equipment Thailand motor vehicles Figures are available for the or through partnerships with Japanesefirms but the Jeep assemblywill likely bring significant numbers of parts suppliers Thai market was as follows Sales in of marketToyota noted and such growth will be greater opening new facilities in Thailand and thedownturn in the a feasibleprogram in a market that relies so heavily on as part of an overall strategy is already a system in place for the acquisition facility References Charukultharvatch W Thailand Automotive traffic woes July Inter Press Service motor vehicles and automotive component parts Market Research Reports Commerce
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