1

Ms. Sudjit InthaiwongDeputy Secretary Geneal

Thailand Board of Investment Bangkok, 2007

Automotive InnovationAutomotive InnovationForum Asia 2007Forum Asia 2007

ThailandThailand

A Competitive LocationA Competitive LocationThailandThailand

Forefront for investmentForefront for investment

World Bank Ease of Doing Business, Thailand ranks #18 in the world

UNCTAD Global Investment Prospects Assessment, FDI prospects in Asia 2005 – 2008: Thailand ranks #3

JBIC 2006 Survey on promising countries for overseas business operations over next 3 years: Thailand ranks #4

JBIC 2006 Survey on promising countries for SMEs over next 3 years: Thailand ranks #4

Grant Thornton International Business Owners Survey 2006:“Thailand’s assets include an entrepreneurial population, abundant natural resources and a wonderful lifestyle and, if these strengths are promoted and supported, the country will continue to be a great place to do business”

JBIC FY 2006 SurveyJBIC FY 2006 SurveyWhen asked about profitability for each region, including Japan, “the percentage of companies answering “higher” was greatest for Thailand”

Automotives, “strengthen or expand”response stronger in Thailand than any other region, including southern China and North America.

JBIC Survey: Companies Looking to JBIC Survey: Companies Looking to Strengthen or Expand in ASEANStrengthen or Expand in ASEAN--44

238

118102

86

50 3331

1022 12

55

1524

1050

50

100

150

200

250

All Industries E&E Automobile

ThailandVietnamIndonesiaMalaysiaPhilippines

Source: JBIC 18th Annual Survey Report on Overseas Operations by Japanese Manufacturing Companies

Comparison of Land and Office PricesComparison of Land and Office PricesBangkok Beijing Hanoi Jakarta Manila Singapore

40 – 45 45 - 50

1

7.02 –8.03

1,404 –1,605

4.1 – 4.6

79.54 -241.82

5.40 -13.64

22 - 8323 – 26

1,850 –2,100

1,924 –3,849

No Land Purchase

0.16 -0.23

22 - 45

3,200

Kuala Lumpur

Industrial Estate Purchase Rate (per sq/m)

61.60 57 - 70 5.5 -11

Monthly Industrial Estate Rents(per sq/m)

5.2 - 5.5 6 - 9 ---

Office Rent (per sq/m)

13.69 39 - 45 10.36 -15.11

Monthly Housing for Foreigners

1,779 2,300 –6,000

879 –1,236

Source: JETRO 17th Survey of Investment-Related Cost Comparison in Major Cities and Regions in Asia; prices are in US dollars

A CostA Cost--Effective WorkforceEffective WorkforceThailandThailand

Thai Labor ForceThai Labor ForceAverage Thai person works 2,184 hours/year, ranked #9 out of 55 countries surveyedThailand ranks as the number 6th

country of those surveyed for pro-business regulations(including minimum wage, hiring/firing practices)

Source: IMD World Competitiveness Yearbook, 2005

Average Monthly WagesAverage Monthly Wages

0

500

1000

1500

2000W

age

(in U

S$)

Bang

kok

Bang

alor

e

Beiji

ng

Han

oi

Man

ila

Jaka

rta

Kua

la L

ampu

r

General Industry Mid-Level Engineer Mid-Level Manager

Source: JETRO Survey, March 2007, based on top figure in average range

Increasing Labor ProductivityIncreasing Labor Productivity

0

50,000

100,000

150,000

200,000

250,000

2001 2002 2003 2004 2005

Baht/year

Source: Ministry of Labor

Human Resource DevelopmentHuman Resource Development

About 80,000 Students Graduated Annually in Science and Engineering

Comprehensive training and R&D for specific high-tech sectors, e.g.

National Science Park in electronics, material science, bio-technology, and nanotechnology

HDD Cluster Development Program

Thailand – Japan Institute of Technology

Thai Graduates in Science, Thai Graduates in Science, Technology, and EngineeringTechnology, and Engineering

Source: Commission on Higher Education; includes BA, MA, and post-graduate degrees

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

2004 2005 2006 2007 2008 2009 2010

A WellA Well--Developed InfrastructureDeveloped InfrastructureThailandThailand

Low incidence of Power OutagesLow incidence of Power Outages

Percent of Production Lost Due to Power Outages

0 2 4 6 8 10

Malaysia

Thailand

China

Brazil

Indonesia

Philippines

India

Source: World Bank

Source: Eastern Water Resource Development and Management

Water Supply on Eastern SeaboardWater Supply on Eastern Seaboard

Economic Gateway: Regional NetworkEconomic Gateway: Regional Network

Source: NESDB

South Asia

Japan, China, Pacific, USA,...

West Gateway

Middle East, Europe, … Laem Chabang Laem Chabang Port:maxPort:max

capacity 18 capacity 18 TEUsTEUs

Rank: 12Rank: 12ndnd in the worldin the world

Airport Development as Gateway of Southeast AsiaAirport Development as Gateway of Southeast Asia

Source: NESDB

Auto & Auto Parts Industries

Thailand: Automotive Hub of Asia

0.001.002.003.004.005.006.007.008.00

200520082010

Million Units

AsiaAsia--Pacific Vehicle Production Pacific Vehicle Production Capacity 2005Capacity 2005--20102010

Automobile Forecast 2007Automobile Forecast 2007

ProductionProduction1,280,000 Units

Increase from last year 92,000 Units

Growth ~ 7.7%

Domestic SaleDomestic Sale700,000 Units

Increase from last year 18,000 Units

Growth ~2.6%

Export SaleExport Sale605,000 Units

Increase from last year 67,000 Units

Growth ~12.5%

Bangkok

Bangchan General Assembly

Y.M.C. Assembly

Thai Honda Manufacturing

Samutprakarn

Toyota Motor Thailand

Isuzu Motors (Thailand)

Siam Nissan Automobile

Siam V.M.C. Automobile

Thai Auto Work

Millennium Motors

Thai Yamaha Motor

Thai Swedish Assembly

Hino Motors (Thailand)

Thonburi Automotive

Assembly

Ayudhaya

Honda Automobile

(Thailand)

Pathumthani

Thai Suzuki Motor

Samutsakorn

Thai Rung Union Car

Rayong

Auto Alliance (Thailand)

General Motors (Thailand)

BMW Manufacturing (Thailand)

Kawasaki Motors Enterprise

(Thailand)

MMC Sittipol

Chachoengsao

Toyota Motor Thailand

Isuzu Motors (Thailand)

AUTOMOTIVEAUTOMOTIVE CLUSTERCLUSTERAutomotive Manufacturer Location

RayongTotal suppliers: 41

Body Parts: 24%, Engine Parts; Drive, Transmission &Steering Parts: 15% each, Suspension & Brake Parts: 12%, Electrical Parts: 10%, Accessories: 7%, Mold&Die: 2%, Other: 15%

SamutprakarnTotal suppliers: 158

Body Parts: 22%, Electrical Parts: 15%, Engine Parts; Drive, Transmission &Steering Parts: 8% each, Suspension & Brake Parts: 5%, Mold&Die: 4%, Accessories: 3%, Other: 36%

ChonburiTotal suppliers: 55

Body Parts: 25%, Engine Parts: 22%, Drive, Transmission &Steering Parts: 15%, Electrical Parts: 9%, Accessories: 5%, Suspension & Brake Parts: 4%, Mold&Die: 4%, Other: 16%

BangkokTotal suppliers: 232

Body Parts: 9%, Engine Parts; Electrical Parts; Drive, Transmission &Steering Parts; Accessories: 6% each, Suspension & Brake Parts: 4%, Mold&Die: 3%, Other: 60%

PathumthaniTotal suppliers: 39

Body Parts: 18%, Engine Parts; Electrical Parts: 13% each, Suspension & Brake Parts: 10%, Drive, Transmission &Steering Parts; Accessories: 8% each, Other: 31%

Principal Auto Parts Production SitesPrincipal Auto Parts Production Sites

AutomotiveAutomotive Hub of ASEANHub of ASEAN14 assemblers from Japan, US,and Europe Exports to 140 countriesLargest domestic pickup market in the world after the USMore than 700 first-tier suppliers 1,100 second and third-tier suppliers 2006 motorcycle production – more than 3.5 million units

Thailand: Automotive Hub of ASEANThailand: Automotive Hub of ASEAN

2006 production ~ 1,176,840 million units 2006 export ~ 539,206 units 15 assembly plants Largest in Southeast Asia Capacity of 2.0 million units by 2010 Production of pickup trucks ~ 877,890 units – world’s largest one-ton pick-up truck manufacturer

Major Auto Assembly Production CapacityMajor Auto Assembly Production CapacityCompany 2006 TotalToyota 450,000Isuzu 200,000Mitsubishi 208,000Auto Alliance (Ford/Mazda) 155,000Honda 120,000General Motors 160,000Nissan 134,400Hino 28,800DaimlerChrysler(2006) Others (2007) 16,300YMC Assembly 12,000BMW 10,000Volvo 10,000

Total 2006 1,576,500Projected total for 2007 1,627,710

Automotive Sales and ExportsAutomotive Sales and Exports

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Dom

estic

Sal

es (U

nits

0

100,000

200,000

300,000

400,000

500,000

600,000

Exp

orts

(Uni

ts)

Domestic Sales

Exports

Automotive ElectronicsAutomotive Electronics

Thailand’s 2006 auto electronics and parts industry valued at US$7 billion.Goal of becoming world-class auto electronics parts production center within 2011, with production to increase in value by US$1.4 billion.

Omron Automotive ElectronicsPioneer ElectronicsSummit Electronic ComponentsKyushu Matsushita ElectronicsPanasonic Automotive Systems

New import and corporate tax waivers (up to 8years, regardless of zone) to develop smaller, morefuel efficient cars

No more than 5 litres/100 kmEmissions compliant with Euro4 specification or higher

Carbon dioxide emissions no more than 120 gm/kmFull front and side impact protection based on UNECE specificationsInvestment applications starting March 2007

New EcoNew Eco--Car PromotionCar Promotion

Project package must be proposed along with:auto assembly, motor manufacture and motor vehicle parts project, andinvestment and manufacture plan for 5-yr period must be included, along with actual production quantity of not less than 100k units/yr from the fifth year

Qualify on MOI energy saving, environmental and safety specifications

General GuidelinesGeneral Guidelinesfor Ecofor Eco--car Incentivescar Incentives

215.44 505.28 722.79 883.421,245.65

1,758.56 1,796.412,182.00

2,909.43

4,100.74

5,026.38

0

2000

4000

6000

1996 '97 '98 '99 2000 '01 '02 '03 '04 '05 '06

Unit: Million Baht

Spare Auto Parts ExportsSpare Auto Parts Exports

5,026.385,026.38

56.34 63.7141.35 119.96 141.19 145.26 171.53

797.48

683.42

43.66

690.37

0

200

400

600

800

1000

1996 '97 '98 '99 2000 '01 '02 '03 '04 '05 '06

Vehicle Jig & Die ExportsVehicle Jig & Die ExportsUnit: Million Baht

0

20000

40000

60000

80000

100000

1996 '97 '98 '99 2000 '01 '02 '03 '04 '05 '06

OEM Auto Component Part ExportsOEM Auto Component Part ExportsUnit: Million Baht

Stations

NGV Expansion TargetNGV Expansion Target

Type 2006 2007 2008 2009 2010 2011Benzene Car

22,890 52,000 74,700 101,000 128,000 160,000

Diesel Car 2,950 8,850 24,300 50,300 79,600 96,600

Total NGV 25,840 60,850 99,000 151,300 207,600 256,600

Region 2006 2007 2008 2009 2010 2011BKK/vicinity 73 181 212 253 277 285Countryside 31 89 138 172 203 250

Total stations 116 270 350 425 480 535

Vehicles

Opportunities in Automotive SectorOpportunities in Automotive SectorAlternative FuelsAlternative Fuels

NGV Assembly/ManufactureNGV Equipment (i.e. cylinders, conversion kits for gasoline and diesel engines)NGV Conversion Service NGV Service Stations

Government target:99,000 NGVs by 2008, replace 20% of oil consumption in the transport sector within the next 20 years

Passenger Car EnginesFuel Injection Pumps*Transmissions*Differential GearsInjection Nozzles*Electronic SystemsElectronic Control UnitsTurbo Chargers*Substrates for Catalytic convertersAnti-Lock Brake SystemsNGV Equipment target: 120,000 NGVs by 2008

Opportunities: Opportunities: Components not Components not Sufficiently Produced in ThailandSufficiently Produced in Thailand

Auto assembly for local and export markets under AFTA and other FTA arrangements

Auto part manufacturing to serve domestic and export markets

NGV segment target: 99,000 NGVs by 2008

NGV Assembly/Manufacture

NGV Equipment (i.e. cylinders, conversion kits for gasoline and diesel engines)

NGV Conversion Service

NGV Service Stations

Automotive Investment OpportunitiesAutomotive Investment Opportunities

Thailand continues to industrialize, but is dependent on foreign industrial machinery for immediate future.High demand for:

Food and farm machineryAlternative energy/energy conservation machineryTextile machineryAutomotive machineryMould & Die Industry

Opportunities in MachineryOpportunities in Machinery

Moulds for Die Casting- Engine block

- Crank shaft- Front case- Oil pan- Gear box – auto- Safety parts : Master pump & Clipper brake

Moulds for Plastic Injection- Automotive Electronic Control Unit (ECU)

- Housing for automotive steering column - Automotive dashboard- Parts for digital camera & cellular telephone- Parts for notebook computer and PDA (personal digital assistant)

Transfer press dies - Automotive body press die

More More Moulds & Dies Needed in ThailandMoulds & Dies Needed in Thailand

BOIBOIGlobalGlobalServicesServices

Focus 2007Focus 2007

Auto industryIncentives for “green car” production

Enhancing competitivenessThink tanks and academia

Human resources development

Skills, technology and innovation

Enhancing university linkages to promote productivity, Enhancing university linkages to promote productivity, technology and R&Dtechnology and R&D

Program Facilitator (BOI and S&T Institutes)

Technology andIndustry target

R&D FacilityPilot Plant

PotentialManufacturer

UniversitiesResearch Institutesand researchers

BUILD ActivitiesBUILD ActivitiesBUILD Activities

Provide information on subcontracting opportunities in Thailand via database web applicationsAssist foreign buyers wishing to source from Thai manufacturersMatch buyers and subcontractors in related businessesArrange participation of Thai manufacturers in trade shows and exhibitions abroad

Free ZonesFree ZonesForeign and domestic goods moved into FZsare eligible for tax and duty privileges, dependant on the goodImported machinery, equipment, and tools exempt from import dutyImported merchandise from other FZs, and exports, exempt from dutiesImports exempt from VATNo excise taxes for imports or manufactured goods in a FZ

THAILAND OF INVESTMENT

SUCCEEDSUCCEED

WWW.BOI.GO.THWWW.BOI.GO.TH