Roger Moser: Thailand 2022
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Transcript of Roger Moser: Thailand 2022
The THAILAND Automotive Industry 2022
A Preliminary Report on the Thailand Automotive 2022 Study
A collaboration between the ASIA CONNECT Center, University of St.Gallen, the Thai Automotive
Focus Group and the Thai-European Business Association.
Dr. Roger Moser
Director ASIA CONNECT Center
University of St.Gallen
St.Gallen/Bangkok, 2012
Uli Kaiser
President
Automotive Focus Group
1 Setting the Stage: Why a Thailand Automotive 2022 Study?
2 The Industry Intelligence Approach applied for Thailand 2022
3 Summary and Outlook
STARTING POINT: Local as well as Expat and Western managers in Asian
countries face uncertainty and ambiguity regarding future institutional change.
Uncertainty & Ambiguity as Challenges
The dynamics of institutions in emerging markets can cause frequent
changes in governmental regulations, tax laws, foreign direct investment
(FDI) regulations, business practices, competition, or market conditions,
etc..
Yet, changes in environmental conditions are difficult to identify and
interpret and, subsequently, the complexity of their development and
interrelatedness are difficult to understand for local as well as foreign
senior executives.
Insights on the Future Industry Context to
Improve Strategic Flexibility
In order to successfully deal with the increased
complexity, interdependencies and dynamics that are
inherent in emerging markets’ institutional context,
senior executives require not only an accurate picture
of today’s market situation but also information about
the potential future business environment(s).
PROPOSAL: We have developed an INDUSTRY INTELLIGENCE APPROACH to
better understand potential changes in the industry environment of Asian
markets.
Industry Intelligence Approach
抛砖引玉 / Tossing out a brick to get a jade gem
The Industry Intelligence approach of the ASIA CONNECT Center-HSG can be used to serve local
as well as Expat and Western managers to better understand the dynamic context of their focal
industry. The approach enables decision-makers to reduce uncertainty about impactful future
developments as well as ambiguity about the institutional context based on a structured, practice-
oriented research methodology. The approach also allows to transform insights on potential futures
into functional consequences today.
APPROACH: The INDUSTRY INTELLIGENCE APPROACH builds on quantitative
and qualitative data from a diverse range of local industry experts as well as
onsite discussions (analysis workshops).
Exchanging Viewpoints in (Workshops)
Onsite expert workshops on the campus of business schools or
in collaboration with industry associations allow for even more
detailed insights on the consequences of the evaluated
projections and scenarios for industry stakeholders as well
as the institutional interdependencies in the focal industry.
Looking into the Minds of Local Experts (Online Delphi Study)
First, we evaluate projections about future industry developments or
strategic group behavior with respect to their probability of occurrence as
well as impact on the industry/competitors and evaluate consensus
among the participating industry experts (e.g. online and real-time).
Moreover, participating experts are encouraged to explain the reasons for a
high/low assessment of a projection.
This approach allows for a unique understanding based on the different
perspectives and opinions of a wide range of local industry experts
a unique combination of qualitative and quantitative data!
OVERALL OBJECTIVE OF THE APPROACH : Uncertainty and ambiguity
reduction for senior executives .
UNDERSTANDING YOUR INDUSTRY
ENVIRONMENT
STEP 1: Real-time Delphi
Online study with local industry experts to gather distinct
perspectives on ‘hot topics’ (e.g. PEST, Value Chain, Markets) .
STEP 2: Workshop
to develop scenarios of the future political, socio-cultural, value chain and
infrastructure environment for your focal industry, (e.g. for the year
2022).
Which changes might occur in the
institutional environment? How changes might interrelate and
what does it mean for a firm?
Challenge 1:
Uncertainty
about future institutional developments
Challenge 2:
Ambiguity about
institutional interdependences
INDUSTRY SEGMENT STUDY EXAMPLE from CHINA – There is moderate
consensus and probability that the majority of Chinese car buyers prefer green
power train technologies in 2020.
Probability Low Probability High
…China is too far away to prioritize environment and health
considerations.
…price sensitivity of the end user
…large vehicles will remain more popular
…running costs will compensate the high tag price in the long run.
…be careful what is regarded as green energies…all OEMs will
offer low-energy consumption vehicles.
…pollution and restrictions in urban areas drive this development.
Impact Low Impact High
… all cars will be complying with emission requirements … pushes the industry towards more R&D investments.
Desirability Low Desirability High
…this will drive up costs … continuous improvement of technologies.
Industry Stakeholder Projection: Customers Probability * Impact* Desirability* Consensus**
“Green Focus”: In 2020, more than 90% of China’s car buyers
prefer cars that utilize the most environment-friendly power
train technologies available.
53% 4.1 3.9 20
Likely Very
High High
Moderate
Consensus
* Probability (0-100%); Impact on Chinese automotive industry (low (1) –(5) high); Desirability for Chinese automotive industry (low (1) – (5) high)
* * Consensus (Level of agreement between 80 Delphi study participants measured as Interquartile Distance)
SP1: Private Transportation
SP
2:
“S
tatu
s S
ym
bo
ls”
INDUSTRY SEGMENT STUDY EXAMPLE from China – Distinct
characteristics, implications for the industry's
stakeholders and probability of occurrence.
INDUSTRY SEGMENT STUDY EXAMPLE from China – Understanding the
“institutional dynamics” (reducing ambiguity).
EXTENSION OF THE APPROACH: Identifying future market and value chain
investment behaviors of strategic groups.
Understanding the Future Behavior of
STRATEGIC GROUPS
STEP 1: Real-time Delphi
Online real-time Delphi study with local industry experts to
gather distinct perspectives on ‘hot topics’.
STEP 2: Expert Interviews
to further investigate differences within strategic groups and
differentiate more specifically the interrelations between single
resource investments
Which geographical markets do the
strategic groups focus on?
Where do the strategic groups focus their
investments along the value chain?
Question 1:
Future Geographical
Market Focus
Question 2:
Future Value Chain
Investments
STRATEGIC GROUP STUDY EXAMPLE from China – Dependent & Independent
Chinese OEMs:.
*
* Dependent = e.g. SAIC, FAW;
Independent = e.g. Chery, Geely;
Chinese
Market
Government
Intervention
Projections
35 40 45 50 55 60 65 70
Impact1-5
4.0
3.5
3.0
Probabilityin %
3.8
3.2
3.1
3.9
3.3
3.4
3.6
3.7
Probability vs. Impact
1010 Dep. OEMs produce their brands only in China
11 Chinese OEMs reach 40% market share
22 Indep. OEMs grow stronger than dep. OEMs
33 Consolidation takes place
44 Government support will be reduced
55 Enforcement of IPR1 will improve
66 Dep. OEMs heavily depend on tech. transfer
77 Indep. OEMs are successful innovators
88 Indep. OEMs invest 10% of revenues in R&D
99 10% of indep. OEMs‘ hires are “experienced“
1111 Quality gap of dep. OEMs has been narrowed
1212 Indep. OEMs follow multi-location strategy
1313 Quality gap of indep. OEMs has been narrowed
1414 Dep. OEMs will double marketing spending
1515 3 indep. OEMs among most valuable brands
1616 Indep. OEMs will double marketing spending
1717 Dep. OEMs sell 98% of own brands in China
1818 3 indep. OEMs sell 5% of cars in dev. markets
1919 Indep. OEMs positioned as budget brands in EU
2020 Indep. OEMs invest heavily in local suppliers
2121 Sourcing engineering services will be critical
VC
Evo
lutio
n
R&D
Pro-
duc-
tion
Mar-
ke-
ting
Dis-
tribu-
tion
Sour-
cing
1010
11
22
334455
66
7788 99
1111
1212
1313
14141515
1616
1717
1818
1919
2020
2121
Value Chain Evolution – Marketing/Branding
1414In 2020, dependent Chinese OEMs will have at least doubled the marketing spending for their own brands,
compared to the level in 2011.
Key Insights Results (Statistical Group)
Probability (Detailed)
• During the past few years, the Chinese government has
been pushing dependent Chinese OEMs to develop
their own brands, independent of the activities with their
JV partners
• So far the success of these initiatives has been
limited, with notable first achievements only by SAIC and
FAW
• One of the reasons for the slow development of own
brands is the limited focus on marketing
• Dependent Chinese OEMs have simply given much more
attention to the development of technological
capabilities than to the development of marketing and
branding know-how
• There is moderate consensus among the panel that this
situation is going to change. The experts rate the
probability that dependent Chinese OEMs will at least
double the marketing spending for their own brands within
the next decade as 68%
• 2 out of 3 respondents actually estimate the probability
above 60%
Probability
in %
Con-
sensus Impact
Desi-
rability
6868 2020 3,63,6 3,73,7
9
59
1913
00
10
20
30
40
50
60
0-20 41-6021-40
Share of expert panelin %
61-80 81-100
Probability, in %
Likely High HighModerate
Consensus
STRATEGIC GROUP STUDY EXAMPLE from China: Dependent OEMs likely to
increase the marketing spending for their own brands significantly.
1 Setting the Stage: Why a Thailand Automotive 2022 Study?
2 The Industry Intelligence Approach applied
3 Summary and Outlook
Definition of
relevant projections
Reconsideration of initial
assessment
Initial assessment of
projections
Online Delphi Study with experts for Thailand’s automotive industry
• Development of
projections for Thailand’s
2022 vision based on
extensive desktop
research and interviews
with industry experts
• Finalization of
projections in major
categories:
PEST
Markets
Value chain
evolution
• Industry experts assess
projections on Delphi
online platform
• Every expert gives
quantitative estimates
for each projections with
regard to
Probability
• In addition experts can
add qualitative
arguments for their
probability ratings
• After the first round,
each expert is able to
see assessment and
arguments of the other
participants
• Experts are able to
reconsider their own
assessment based on
the reasoning of the rest
of the group
• Iterative process until
each participant has
reached his final
assessment
THAILAND 2022: Development of projections for Thailand’s automotive industry
and their assessment through online survey with local industry experts.
THAILAND 2022 – STEP 1: Conducting an online study with local industry
experts.
Online Delphi platform
Probability
Degree of
Consensus
• Measured using the
interquartile range (IQR)
• The IQR is the measure of
dispersion for the median and
consists of the middle 50% of
the observations
Terminology
• Measures the expected
probability of each projection
to come true
• Metric scale (0-100%)
Politics: There is strong consensus for a 50/50 probability that the Thai
government will have given up local standards and implemented international
UNECE-based standards in 2022.
Probability Low Probability High
…It depends on OEM’s whether they are ready or not, not only on
the government policy.
…The Thai automotive industry will not be able to meet the
requirements of the international UNECE-based standards in
terms of quality.
…Thai government basically follows OEM's intention and
investment plans, whereby if Thailand becomes more export
oriented, it must implement international standards within 10
years.
…All car makers in key part suppliers are strongly pushing.
Projection for political environment Probability * Consensus**
“UNECE-based standards”: In 2022, the Thai government has given up local
standards and implemented international UNECE-based standards.
53% 10
Likely Strong Consensus
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Politics: There is moderate dissent at a low average probability that CO2
emission regulations in Thailand will be the same as in Europe in 2022.
Probability Low Probability High
…Regulation process in Thailand is not as proactive as in Europe
and still moving slowly. Therefore it’s hard to catch up the same
level as Europe.
…Too many costs would result.
...Thailand will always lag somehow behind.
…It‘s an environmental requirement.
…The new national automotive master plan aims to become a
green production hub in the next decade. Therefore the
adaptation of European emission regulations is likely.
Projection for political environment Probability * Consensus**
“CO2 emission regulations”: In 2022, CO2 emission regulations in Thailand are
the same as in Europe.
41% 25
Unlikely Moderate Dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Politics: There is moderate dissent at a relatively high probability that Free
Trade Agreements will be in place between Thailand / AEC and Europe / EC in
2022.
Probability Low Probability High
...No one can answer this question.
…Pressure from Europe and at the same time benefits for
Thailand.
…in capitalistic perspective, it will be a MUST happening case but
not fully in 2022. It needs to be more effective for ASEAN first.
…Thailand’s government and private sector are aiming to settle a
FTA Thai-EU in quick if EU will keep sensitive list to work in
second stage FTA.
Projection for political environment Probability * Consensus**
“Free trade Agreements”: In 2022, Free Trade Agreements are in place between
Thailand / AEC and Europe / EC.
58% 25
Likely Moderate Dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Value Chain / Supplier: There is strong dissent at a high average probability
that local manufacturers will supply more than 85% of the parts used in local
assemblies of OEM’s for passenger cars in 2022.
Probability Low Probability High
…ASEAN has allowed for free trade in between all member
countries; localization in Thailand will not be driven by
government incentives but by scale effects and TOCO
considerations of the OEM when sourcing.
…Free trade will be facilitated through the introduction of AEC. As
a result Thailand will as well import some auto parts instead of
producing most of them.
…Increasing foreign demand for auto parts and components from
Thailand will strengthen the local industry.
…There is already a trend to have more local supply for significant
components.
Projection for (economic) value chain environment / Supplier: Probability * Consensus**
“Local value creation”: In 2022, local manufacturers supply more than 85% of the
parts used in local assemblies of OEM’s for passenger cars.
63% 30
Very Likely Strong Dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Value Chain / Supplier: There is strong dissent at a 50/50 probability whether
all major global automotive suppliers will have set up production plants in
Thailand in 2022.
Probability Low Probability High
…Many alternatives. Why cluster in Thailand? Costs rising. Labor
short. Engineering schools sub-par.
…related to FTA effectiveness, but most will rely on India and
export to Thailand.
...Automotive Know How will be concentrated in Thailand and will
play a major factor for automotive OEMs in location decisions;
however, this does not necessarily mean that TIER1/2 will have
plants only in Thailand and not in other ASEAN countries. Other
strategies come into play here.
Projection for (economic) value chain environment / Supplier: Probability * Consensus**
“Global automotive suppliers”: In 2022, all major global automotive suppliers
have set up production plants in Thailand.
53% 30
Likely Strong Dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Value Chain / R&D: There is strong dissent at a low average probability that
Thailand will be the only relevant R&D hub in South-East Asia in 2022.
Probability Low Probability High
…Only if Singapore, Malaysia and Indonesia disappear from the
map.
…Japan will still be strong in R&D.
…still difficult to have good solid R&D center in SE Asia, more in
India and China, then SEA is used for production.
…Malaysia has the same industrial attitude as Thailand.
…It should have developed by then.
…Investors will chose Thailand as R&D center because of it's
relatively cheap but well educated engineers.
Projection for (economic) value chain environment / R&D: Probability * Consensus**
“Automotive R&D hub”: In 2022, the only relevant automotive R&D hub in South-
East Asia is Thailand.
41% 30
Unlikely Strong Dissent
* Probability (0-100%); * * Consensus (Level of agreement between X Delphi study participants measured as Interquartile Distance)
Value Chain / R&D: There is strong consensus at a low probability that all
major international Tier 1 suppliers have serious R&D facilities in Thailand in
2022.
Probability Low Probability High
…What would the rationale be? Application engineering yes, but
not R&D. Also, look at how Thai universities rate in the global
context; maybe one in the top 200.
…In India and China, not much in Thailand.
…This will be the last bastion to fall. Although Thailand will lead
automotive R&D in the region, many Tier 1 suppliers will keep
their R&D in their own countries - close to the OEM R&D.
…They will need to have a base in Thailand.
…With the introduction of the AEC high skilled labour can migrate
to Thailand and compensate the shortfall.
Projection for (economic) value chain environment / R&D: Probability * Consensus**
“Serious R&D facilities”: In 2022, all major international Tier 1 suppliers have
serious R&D facilities in Thailand.
44% 10
Unlikely Strong Consensus
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Value Chain / Sourcing: There is strong dissent at a relatively high probability
whether Japanese suppliers in OEM’s and car parts in Thailand have a market
share less than 65% in 2022.
Probability Low Probability High
…Hard to be possible when Japanese is fully dominated and able
to control this market. Other change ranger such as US and
European car makers are very much far behind.
…Cannot see the major investment Japan has diminishing.
…More mix with Korean, Chinese and others. More strong
suppliers develop similar level of quality to support non-
Japanese OEM as well, which helps good bland in market.
…It is possibility that more Europe brands will set production
bases in Thailand to survive in the buying power shift of the
world.
…Suppliers will avoid cluster risk.
…VW, Ford and GM will increase presence.
Projection for (economic) value chain environment / Sourcing: Probability * Consensus**
“Japanese suppliers market share”: In 2022, the market share of Japanese
suppliers in OEM’s and car parts in Thailand is less than 65%.
56% 35
Likely Strong Dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Value Chain / Sourcing: There is strong dissent at a 50/50 probability whether
the quality of suppliers in Thailand is comparable to those in EU and Japan in
2022.
Probability Low Probability High
…This is related to people's mentality. Thai need more flexibility of
quality in terms of delivery and time R&D management, which
will be still critical.
…Culturally based, the tendency for compromises, not clearly
addressing and not sustainably solving issues as well as not
executing consistency in management practices is relatively
higher pronounced than in European countries and will hinder
the overall quality level.
…Most multi nationals will be present in Thailand.
…Most of mechanical parts will be very competitive except for
electronically part where part makers in Thailand still have no
competitive technology.
…Already Thai production quality is nearly the same as in Japan.
…It must to meet market demand.
Projection for (economic) value chain environment / Sourcing: Probability * Consensus**
“Quality of suppliers ”: In 2022, the quality of suppliers in Thailand is comparable
to those in EU and Japan.
54% 30
Likely Strong Dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Value Chain / Production: There is strong dissent at very high average
probability that Thailand is the largest automotive production base in South-East
Asia in 2022.
Probability Low Probability High
...Indonesia will overtake Thailand.
…As a consequence of the Thai flood crisis several companies
are diversifying their operations to other countries and thereby
weaken Thailand’s current leader position.
…Diversification will take place, low cost cars will be produced in
Indonesia, while higher priced cars will be produced in Thailand
and Thailand will emerge as the clear winner.
…Auto infrastructure needs some time to establish, in Thailand it
is already built up.
…Automotive OEMs need component parts, and Thailand is the
biggest parts production cluster, new OEMs will move in and
then bring more part suppliers.
Projection for (economic) value chain environment / Production: Probability * Consensus**
“Largest automotive production base”: In 2022, Thailand is the largest
automotive production base in South-East Asia.
69% 38
Likely Strong Dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Value Chain / Production: There is strong dissent at a 50/50 probability that
the total car production volume in Thailand is more than 5 million units per year
in 2022.
Probability Low Probability High
…If the world economic do not return back to normal within 5
years we might be unable to achieve that number.
…OEM’s have choice of production site in other countries always,
and speed of increase is not that high in my smell.
…Thailand has high costs compared to Indonesia.
…Thailand will export more vehicles.
…Most of Japanese car makers are under process to transfer
capacity from Japan to Thailand and Indonesia.It will make
Thailand become major exporting hub of Japanese.
…An adjusted gi = annual growth rate (2013 to 2022) = 0.03, 0.1,
0.09, 0.07, 0.05, 0.03, .01, 0.2, 0.1, 0.1 (with 2 economic
downturns) could bring the 2022 volume up to 5 Mio.
Projection for (economic) value chain environment / Production: Probability * Consensus**
“5 million units production”: In 2022, the total car production volume in Thailand
is more than 5 million units per year.
46% 30%
Unlikely Strong Dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Value Chain / Production: There is strong dissent at a 50/50 probability that
labour costs in the automotive industry are lower in Thailand than in China in
2022.
Probability Low Probability High
…China is a big country which doesn't use all of it’s labor yet, but
Thailand is going to reach the maximum level of labor use
already.
…Thailand does everything to impede migration of labor from
neighboring countries while at the same time forcing increases
in labor cost.
…Costs are continuing to increase in Thailand, inflation will hinder
the industry.
…They are lower now and costs in China will rise stronger than
Thai cost.
…Labor cost in China is increasing rapidly due to high inflation
and fast growth in the automotive industry. It will pass Thailand
very soon.
…Could come down from AEC.
Projection for (economic) value chain environment / Production: Probability * Consensus**
“Labour costs”: In 2022, labour costs in the automotive industry are lower in
Thailand than in China.
50% 36
Likely / Unlikely Strong dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Value Chain / Production: There is strong dissent at a 50/50 probability that
car and component production in Thailand is mostly automated in 2022.
Probability Low Probability High
…Not much of a pay-back. If investment in automation is required,
other countries like Malaysia with better skill base will be more
attractive.
…More customers are adding robots today.
…Already some level of automation has been successful in
Thailand. In process, it will be more automated but not as
significant as you would imagine.
…Automation will increase, but not to that extent.
...Labour shortage will drive automation.
…Cost of labor will drive this.
…It's already mostly automated.
Projection for (economic) value chain environment / Production: Probability * Consensus**
“Automated production”: In 2022, car and component production is mostly
automated.
52% 35
Likely Strong Dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Value Chain / Marketing: There is VERY strong dissent at relatively high
probability that the most important marketing channel for the automotive industry
in Thailand in 2022 is Social Media.
Probability Low Probability High
...Social media is just a hype and not a long term trend.
…There will always be a need for the conventional.
…Social Media is growing up its importance, but it might not reach
Thai rural area and not cover to all ones who have power of
buying cars.
…Communication is becoming more and more digitalized.
Therefore social media is highly relevant in the future.
…Some influence but more from actual hearing from peers.
…As everywhere in the world – unfortunately.
Projection for (economic) value chain environment / Marketing: Probability * Consensus**
“Social Media”: In 2022, the most important marketing channel for the automotive
industry in Thailand is Social Media.
56% 51
Likely Strong dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Value Chain / Marketing: There is moderate consensus at 50/50 probability
that Thailand’s motor shows in 2022 are as significant for global automotive
OEM’s as the shows in Europe, US and Japan.
Probability Low Probability High
…Two current shows need to merge into one to be able to hold
the most relevant show in 2022 as Jakarta will be catching up
very fast.
…Thailand‘s relevance in the automotive industry is as a sourcing
and production market rather an end-consumer market.
Therefore its motor shows will not become globally relevant.
…In Thailand all is related to R&D and trend impact rather than
selling shows.
…Thailand as the automotive hub in ASEAN provides access to a
market of about 600 Million people. Therefore Thai motor
shows gain relevance.
Projection for (economic) value chain environment / Marketing: Probability * Consensus**
“Motor Shows”: In 2022, Thailand’s motor shows are as significant for global
automotive OEM’s as the shows in Europe, US and Japan.
46% 15
Unlikely Moderate
Consensus
* Probability (0-100%); * * Consensus (Level of agreement between X Delphi study participants measured as Interquartile Distance)
Value Chain / Distribution: There is strong dissent at a 50/50 probability that
75% of all vehicles manufactured in Thailand are exported in 2022.
Probability Low Probability High
…Investors will derisk and hedge export bases.
…May be 50%.
…There will be growth of the local market as more eco cars are
produced here.
…The realization of the DAWEI deep seaport project reduces
logistic cost for exporting Thai made vehicles and therefore
boosts Thai automotive exports.
…The realization of the DAWEI deep seaport project reduces
logistic cost for exporting Thai made vehicles and therefore
boosts Thai automotive exports.
…That is the direction that I can see considering investment and
market domestic demand.
Projection for (economic) value chain environment / Distribution: Probability * Consensus**
“Export ratio”: In 2022, 75% of all vehicles manufactured in Thailand are exported.
54% 30
Likely Strong Dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Value Chain / Consumers: There is strong dissent at a 50/50 probability that
car density in Thailand is 200 cars per 1000 people in 2022.
Probability Low Probability High
... Macroeconomics don't support this number. Plus infrastructure
will collapse at that level.
…Too many cars to imagine, no infrastructure to support.
…Only in BKK area, others still primitive.
…It's already at >160.
…Average personal income will grow accordingly.
…More developed road infrastructure will lead to higher car
density.
Projection for (economic) value chain environment / Consumers: Probability * Consensus**
“Car density”: In 2022, car density in Thailand is 200 cars per 1000 people.
47% 35
Unlikely Strong Dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Value Chain / Consumers: There is moderate consensus at a very low
probability that the motorcycle has replaced small cars for personal transport
and is only be used for recreational transport in 2022.
Probability Low Probability High
…Motor cycles will remain a flexible low cost means of
transportation. The importance of low cost cars however has
increased.
…Still act as one of major transporting method, all related to city
development and rail / road infrastructure but there is not much
improvement in last 10 years.
…Small cars flopped even in India.
... Motor cycles will be used in rural areas.
…As cars get cheaper and salaries go up this will happen. It has
already happened to a significant extent.
…GDP in Thailand grows fast and therefore gives people more
purchasing power. If affordable Thai people will always prefer a
car over a motorbike.
Projection for (economic) value chain environment / Consumers: Probability * Consensus**
“Motorbikes for recreational transport”: In 2022, the motorcycle has been
replaced by small cars for personal transport and is only used for recreational
transport.
28% 20
Unlikely Moderate
Consensus
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Value Chain / Consumers: There is moderate dissent at a rather high
probability that public transportation is the only efficient mode of transportation
throughout the metropolis in 2022.
Probability Low Probability High
…Thai likes to drive and private feeling among friends.
…Since cars will remain a very important status symbol in
Thailand, public transportation will never be the most preferred
means of transportation.
…It already is.
…If emphasis is on "efficient" then yes, all other means of
transportation will not be providing adequate ratios of
1) Resources per person per kilometer
2) Time per person per kilometer
…The transport system will be improved.
…It is already.
Projection for (economic) value chain environment / Consumers: Probability * Consensus**
“Public transportation”: In 2022, public transportation is the only efficient mode of
transportation throughout the metropolis.
58% 25
Likely Moderate Dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Value Chain / Consumers: There is strong dissent at a very low probability that
Bangkok has introduced car-sharing (i.e. fractional car ownership / pay per use
vehicles) throughout the metropolis in 2022.
Probability Low Probability High
…Sharing a meal: yes. Sharing cars, no.
…People want ownership
…It’s too risky for cars being stolen and deceit.
…Additional rise in traffic volume will bock the metropolis seriously
and make parking space really expensive. Therefore people will
consider car-sharing as a convenient alternative.
…Low vehicle-ownership rates due to low incomes will boost car-
sharing in Bangkok.
Projection for (economic) value chain environment / Consumers: Probability * Consensus**
“Car-sharing”: In 2022, Bangkok has introduced car-sharing (i.e. fractional car
ownership / pay per use vehicles) throughout the metropolis.
27% 30
Unlikely Strong Dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Society: There is VERY strong dissent at a 50/50 probability that there is an
annual demand for one million low-emission vehicles per year in Thailand in
2022.
Probability Low Probability High
…no incentives (government driven) in sight and unlikely to be
done unless government becomes more focused on the issue
and implements real policies rather than face saving, false
compromises.
…Thai people will not relief on low-emission yet but price only.
…cost of technology are too high.
... In terms of capacity, there is obligation for OEM to produce in
given years, but mainly it will be used for export base.
…Thailand has a new green Automotive Master Plan.
…there might be a chance when the Thai government sees
possibilities to gain profit from it by implementing charges on
car manufacturers which doesn’t provide low-emission vehicles.
…Thailand has strong views on the environment.
…trends will change due to pressure from ASEAN for low
emission vehicles and overall pollution reductions.
Society Projection Probability * Consensus**
“Demand for low emission vehicles”: In 2022, there is an annual demand for one
million low-emission vehicles per year in Thailand.
50% 45
Unlikely Strong dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Society: There is very strong dissent at a 50/50 probability that total cost of
ownership of a car is the most important factor for a purchase decision of an
average Thai car buyer in 2022.
Probability Low Probability High
…Status of "owning a car" is more important than TOCO; this is
embedded in the national culture and requires significant
external triggers to start shifting towards a more cost oriented
view (e.g. fuel prices increase ten fold, taxes etc.)
…One of the most important, yes, but the most important, no.
Practicality for intended purpose (e.g. truck)and overall appeal
(e.g. design)are likely to supersede cost of ownership.
…Thailand will have more disposable income by 2022
…Total cost will be key criteria for purchasing intention when most
of people are the mid income and debt will be national issue to
control.
…Small car segment is growing and these buyers are more
budget conscious.
…Another big financial crisis which forces Thais to reduce their
cost and save for the future.
…Thai\'s hire purchase and image is important so cost still
important but other factors too.
Projection for social environment: Probability * Consensus**
“TCOO for purchase decision”: In 2022, total cost of ownership of a car is the
most important factor for a purchase decision of an average Thai car buyer.
51% 41
Likely Strong Dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Society: There is VERY strong dissent at a low probability that 100% Biodiesel
is the most popular fuel in the rural areas of Thailand in 2022.
Probability Low Probability High
…Hard to be possible when palm oil shall supply to food sector
too.
…Not in the next 10 years. The government has given so much
program to promote investors to come based on usual fuel,
adapting Biodiesel requires additional structure change for
OEM, which is being studied but not in next 10 years.
…It is a profit maximizing question. Therefore the government
plays an important role in this question.
...When the price of the world diesel oil is too high, people in rural
area will do save their cost by using more Biodiesel.
…Thailand can produce Biodiesel locally.
…Biodiesel is economical and environmentally friendly.
Projection for social environment: Probability * Consensus**
“Biodiesel”: In 2022, 100% Biodiesel is the most popular fuel in the rural areas of
Thailand.
38% 50
Unlikely Strong Dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Technology: There is VERY strong dissent and at a relatively high probability
that roads are the only relevant mass transportation infrastructure in Thailand in
2022.
Probability Low Probability High
…True for upcountry while Bangkok will see a significant improve
in mass transportation in order to prevent a total collapse of the
infrastructure.
…Thailand will have a developed high speed train system by then
because the government planes to spend more than 1 trillion
THB to develop rail infrastructure.
…Thai government provides more and better infrastructure on
rails since the traffic on the roads will increase dramatically and
is not controllable anymore.
…Inaptitude to manage large mass-transport projects.
…Thailand seems to lack vision and will to develop a
comprehensive rail network for example.
…Yes, still if you say only in next 10 years, however, in the longer
term Rail transport and Vessel transport will be examined
effectively.
…Though many new sky train lines will have been finished before
2022 but that for Bangkok Metropolitan, Thailand is not merely
Bangkok.
Projection for (soft/hard technological) infrastructure environment: Probability * Consensus**
“Roads for mass transportation”: In 2022, roads are the only relevant mass
transportation infrastructure in Thailand.
56% 50
Likely Strong Dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Technology: There is strong consensus at a relatively high probability that
Thailand has a significant shortfall of unskilled and semi-skilled labour in the
automotive industry in 2022.
Probability Low Probability High
…0%, if labor can move freely within AEC.
…Significant shortfall is already immanent and existing;
Government will ease immigration policies to neighboring
countries which will have reduced the pressure on labor by
2022.
…The government increase the possibility of education also in the
country side and could promote more upcountry people to move
to the industrial area, or might use foreign labor effectively.
…The demand will rise stronger than the supply.
…100%, if current system of protected profession, and exclusion
clauses remains in place.
…Even if government relaxes it’s policy of protection it wont be
sufficient to address the growth because the process to
restructure education system is still moving too slow.
…It will take decades for the complete mind-set change needed
to view a vocational/technical skills-based education as equally
important and attractive as an academic education.
Projection for (soft/hard technological) infrastructure environment: Probability * Consensus**
“Labour shortfall”: In 2022, Thailand has a significant shortfall of unskilled and
semi-skilled labour in the automotive industry.
57% 10
Likely Strong Consensus
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Technology: There is strong dissent at 50/50 probability that most high skilled
automotive engineers from ASEAN area are working in Thailand in 2022.
Probability Low Probability High
…Thailand has faced a “brain drain” in recent years, with its skilled
students and workers migrating in search of better opportunities
and pay.
…Indo and others are not far behind.
…Indonesia is catching up, with macroeconomics and
demographics in their favor.
…Thailand is the center of SE Asia and have the biggest
automotive parts production cluster in the region with a good rate
of growing up.
…Especially, Chinese and Indian will be present with experienced
skills to fulfill the gap since skilled Thai workers will be still short.
…Thailand will maintain it's status as Automotive hub.
……Competition with neighboring countries such as Indonesia and
Malaysia is significant. However, Thailand will come up as the
manufacturing hub for ASEAN.
Projection for (soft/hard technological) infrastructure environment: Probability * Consensus**
“ASEAN’s engineers in Thailand”: In 2022, most high skilled automotive
engineers from ASEAN area are working in Thailand.
53% 36
Likely Strong Dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Malaysia: There is moderate consensus at a low probability that Malaysia has
found a JV Partner for Proton and has become a serious player with more than
1’000’000 vehicles produced per year and 30% export ratio in 2022.
Probability Low Probability High
…Quality and design is still not that shiny, additionally they have
their own management problem.
…So many engagements, but never a wedding.
…Proton will vanish.
…Proton always has difficulty on improving technology in order to
match the world standard.
…Unlikely. Many have looked, but few have continued with Proton.
…Local value creation requirements in Malaysia boost its exports.
…Chines brands will enter the Malaysian market and therefore
help the industry growing.
…Looks like Honda is the enabler, if one can trust the newspaper
reports.
Projection for ASEAN environment: Probability * Consensus**
“Malaysia”: In 2022, Malaysia has found a JV Partner for Proton and becomes a
serious player with more than 1’000’000 vehicles produced per year and 30% export
ratio.
42% 20
Unlikely Moderate
Consensus
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Indonesia: There is moderate consensus at a low probability that Indonesia has
increased its automotive export to 50% and has overtaken Thailand as the
leading automotive production hub in South-East Asia in 2022.
Probability Low Probability High
…Indonesia supports mainly domestic demand.
…Indonesia cannot build up a component parts cluster within 10
years and labour cost are the same as in Thailand.
…Indonesia is politically too unstable.
…It is depending on car makers policy from which base they
export, but from Japanese point of view Thailand will be main
exporting base because Thailand’s supply chain is more
competitive.
…Macroeconomics and demographics favour Indonesia.
…Many companies will continue to invest in Indonesia and by this
help bringing it to the top in South-East Asia.
Projection for ASEAN environment: Probability * Consensus**
“Indonesia”: In 2022, Indonesia has increased their automotive export to 50% and
has overtaken Thailand as the leading automotive production hub in South-East
Asia.
41% 20
Unlikely Moderate
Consensus
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Myanmar: There is strong dissent at a low probability that Myanmar has an
automotive industry with more than 1’000’000 car capacity per annum strongly
dominated by Chinese manufacturers in 2022.
Probability Low Probability High
... Automotive industry will be set up in Myanmar but development
in all aspects need more than 10 years.
…Maybe 500’000 but not dominated by Chinese.
…Myanmar needs more time to develop the infrastructure.
…Hard for such fast capacity building unless the market grows
significantly.
…Myanmar is still far from being en enticing market for industrial
investment. In order to get to that scale, projects would have to
be starting now.
…China is developing Myanmar as logistics gateway and
production will follow.
.. Yes, some chance and Chinese will be major player followed by
Japanese.
Projection for ASEAN environment: Probability * Consensus**
“Chinese Domination in Myanmar”: In 2022, Myanmar has an automotive
industry with more than 1’000’000 car capacity per annum strongly dominated by
Chinese manufacturers.
38% 40
Unlikely Strong Dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
Myanmar: There is moderate dissent at a 50/50 probability that the DAWEI
deep seaport is the biggest deep sea port in South East Asia in 2022.
Probability Low Probability High
…Other ports that are well established will remain highly utilized
and relevant.
…China's Western Seaboard.
…Oversized ambition will meet reality.
…Still Thailand or Singapore act as major player but DAWEI has
potential for sure.
…A lot of investment is going into this project.
…Successful completion of the project by 2022.
Projection for ASEAN environment: Probability * Consensus**
“DAWEI deep seaport”: In 2022, the DAWEI deep seaport has taken over to be
the biggest deep sea port in South East Asia.
52% 27
Likely Moderate Dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
China: There is moderate dissent at low probability that Thai automotive exports
to China account for 30 per cent of the Thai automotive exports to global
markets in 2022.
Probability Low Probability High
…China will not import but produce domestically.
…Chinese still consider automotive as sensitive list. So they will
block them out.
…China will still have their own OEM’s domestically, no need to
rely on other countries much (except high end).
…Unlikely, as OEM will build in China for local market and in
Thailand for the rest of the world.
…Only Thailand can produce the luxury class cars.
Projection for global environment: Probability * Consensus**
“Exports to China”: In 2022, the Thai automotive exports to China account for 30
per cent of the Thai automotive exports to global markets.
32% 25
Unlikely Moderate Dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
China / Japan: There is strong dissent at a rather low probability that China is
the second largest foreign automotive investor in Thailand after Japan in 2022.
Probability Low Probability High
... Myanmar is the target for China.
…Chinese investments will go to Indonesia because it’s a larger
market.
…It’s hard for Chinese car to find acceptance in Thailand or in
ASEAN by culture whereas US cars are still competitive and
more accepted.
…China will increase investment in Thailand but not within next 10
years.
…China will strongly engage in ASEAN.
…Chinese OEM and suppliers need other place like Thailand to
invest in order to support not much Yuan appreciation as well as
duty exemption in importing countries.
Projection for global environment: Probability * Consensus**
“Investments from China and Japan”: In 2022, China is the second largest
foreign automotive investor in Thailand after Japan.
44% 30
Unlikely Strong Dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23 Delphi study participants measured as Interquartile Distance)
China / Japan: There is strong dissent at a rather low probability that in 2022
many Western and Japanese automotive companies have shifted new
investments to Thailand for exports to China and India.
Probability Low Probability High
…Companies will build where they sell. Why would a relatively
high cost location export to low cost countries?
…Japanese would shift more to India or other non-explored
country, Thailand, they would monitor labor wage increase.
…If they shift it will be to India.
…India and China will continue to grow to support their domestic
markets rather than exports.
…Japanese part makers are moving to Thailand to follow car
makers that transfer capacity to Thailand. And sooner European
car and part maker will follow when it is the only room to maintain
their competitiveness in global market.
…Thailand is the perfect low cost base to produce for export.
…Only Thailand can produce high technology or luxury cars.
Projection for global environment: Probability * Consensus**
“Investments from China and Japan”: In 2022, many Western and Japanese
automotive companies have shifted new investments to Thailand for export to China
and India.
43% 30
Low Strong Dissent
* Probability (0-100%); * * Consensus (Level of agreement between 23Delphi study participants measured as Interquartile Distance)
1 Setting the Stage: Why a Thailand Automotive 2022 Study
2 The Industry Intelligence Approach applied
3 Summary and Outlook
THAILAND 2022 – (Outlook): Turning scenario insights into functional
consequences today through the “Institutions-Resource Matrix” (Example).
Political Value Chain
Socio-cultural Technological Infrastructure
Scenario Development
Probability Impact
Desirability Roadmap
Industry Environment P-S-T
Projection 1 Projection 2
Probability Impact
Desirability
Industry Value Chain
Projection 1 Projection …
Institutional
Dynamics
Effects on Department's Strategic Plans
Organizational(Structures, Processes, Leadership Style etc.)
Technological(IP Rights, Production
Technologies, Tacit Knowledge etc.)
Human(Executives, Employees
etc.)
Physical(Plants, Machinery etc.)
Relationships(within company,
functions, customer or suppliers etc.)
R&D
Procurement
Production
Marketing
Distribution
After Sales
Modification of Local Operations
CONTACT: The ACC-HSG / AFG research team can be contacted to further
discuss your interests and answer your questions.
ASIA CONNECT Center-HSG
Dr. Roger Moser, Director
University of St.Gallen
Dufourstrasse 40a
CH-9000 St.Gallen, Switzerland
Tel: +41 71 224 73 54
E-mail: [email protected]
Web: www.acc.unisg.ch
Paolodal Pozzo Toscanelli, 1457
Automotive Focus Group
Uli Kaiser