AFG debates the future

(L to R) Richard Jackson, Mike Diamente, Ramesh Ramanathan, and Frank Weiand discuss pressing subjects affecting the automotive industry.

The Automotive Focus Group (AFG) showed last weekend that it is truly a forward looking organization, with a panel debate on pressing subjects affecting the automotive industry.
The panelists were Mike Diamente (Dana Spicer), Ramesh Ramanathan (Visteon) and Frank Weiand (BMW) with Richard Jackson as the moderator.
The perennial problem of skilled labor was the first topic, with all agreeing that the current emphasis on holding university degrees and no real trade schools produces a disparity in the make-up of the work force. Inducements to stay with one employer were necessary with packages to include transport required.
A discussion on wages provided some differing opinions. Ramesh felt that wages were too high, compared to India and China, resulting in the Nissan March being produced there for export. This was not the feeling shared by Mike Diamente or Frank Weiand who felt that Thai wages were still very low on a world scale and Thai workers are very efficient to make up for the differences between India and Thailand.
Another interesting topic was on the effectiveness of the BOI, which was heading in the direction of wanting high end technology, but all felt that the English language abilities (or lack of it) needed addressing. Frank Weiand pointing out that on a survey of 54 countries with English as a second language, Thailand was number 53!
Mike Diamente was happy to admit that he was pro Thailand, a country where making money was a virtue and he admired the resiliency of the Thai culture in meeting the new problems.
When directly asked about the performance of the current Thai government, Ramesh said that the generally populist movement was not surprising, considering that this is similar to many governments in the world.
The AEC, due for 2015, was not going to be such an earth-shattering event in the panel’s opinion because its rules are non-enforceable. The biggest competitor to Thailand was going to be Indonesia, but all felt that it would be many years before Indonesia caught up with the Thai infrastructure.
Following on from the debate, the AFG members began a networking event above the Beach Club of the Pullman Pattaya Hotel G, with congratulations being in order to the panel, moderator and AFG Vice President Frank Holzer for a well organized meeting. Frank can be reached by email [email protected].

Thai economist urges gov’t to closely control Bt2 trillion spending

The government’s Bt2 trillion investment on infrastructure development will not stimulate Thailand’s economy in the near future but will take at least a few years, a leading economist said last week.
Somprawin Manprasert, deputy dean of the Chulalongkorn University Faculty of Economics said the mega budget spending, if approved, would take some time before construction could start and positive contributions to the economy would take several years.
However, once the projects materialize, they will greatly stimulate the economy, he said.
He said Thailand’s gross domestic product (GDP) growth this year will be lower than 4 percent given the government’s interrupted economic policy and short-term stimulation measures.
It is necessary that the government maintain economic growth to avoid volatility and boost manufacturing efficiency especially in education and infrastructure development to strengthen the nation’s economic pillars, he said.
He said Thailand’s efficiency would diminish and GDP growth decline if the government fails to take action, he added.
He expressed concern that the mammoth borrowing would lead to the problem of public debt in the long run as some of the projects would not be achieved as projected while the government would shoulder a heavier burden from the higher ageing population.
The government must closely monitor all projects to ensure they move forward as planned, he said.
Dr Somprawin said the US Federal Reserve’s announcement to retain the quantitative easing stimulus should strengthen the US economy next year and consequently contribute to global economic expansion.
The International Monetary Fund has predicted global GDP growth at 3.8 percent next year - a positive factor for Thailand’s GDP growth, forecast at 4.5-5 percent next year.
Thailand’s export growth next year, though predicted at lower than 10 percent, should be better than this year but concerns remain regarding household debt which rocketed to 80 percent of GDP, prompting a warning by the Bank of Thailand, he said. (MCOT)

Central bank governor sets infrastructure development as Thailand’s priority

The Bank of Thailand (BoT) last week urged the government to elevate Thailand’s infrastructure so as to improve the country’s cost of living standard and competitive edge.
BoT Governor Prasarn Trairatvorakul said Thailand’s economic infrastructure, the contributing element to sustainable economic growth, is volatile in light of weakened economic growth which has fallen from 9 percent before the 1997 economic crisis to 4 percent at present.
Per capita income is at 15-20 percent, representing an unimproved cost of living standard compared to that of neighboring countries like Malaysia, South Korea and Taiwan, he said, indicating that the problems were due to wide income gaps and diminishing competitiveness.
He quoted a World Economic Forum survey in the last five years in which Thailand’s 28th rank dropped to 37th while Indonesia improved from 54th to 38th and the Philippines climbed up 12 ranks.
Thailand’s major challenges are political instability, corruption, a lack of preparedness in technology and education while monetary and financial policies were too restrictive to boost the country’s economy, he said.
The government must improve production capability and efficiency to cope with negative factors and sporadic volatile impact if it wants to boost Thailand’s economy, said Prasarn.
The BoT governor said Thailand describes itself as the hub of Southeast Asia given its role as the manufacturing base for significant industries and good trading partners, but it has not made full use of the strength for economic expansion.
Thailand needs a major change, especially the private sector which much boost its manufacturing capability, while the Thai work force must adjust itself to new production technology with the government’s support, he said.
He called on Thai people to be open to diverse attitudes and create a value standard that excludes corruption and is in favor of good governance. (MCOT)

THAI revamps ticket sales operations to boost revenue

Thai Airways International (THAI) has announced a major structural shakeup with a revamp of its sales operations to turn around the company’s poor performance.
THAI president Sorajak Kasemsuvan said last Friday that the Board of Directors’ decision on restructuring was the most crucial in the past decade, aiming for sustainable sales growth given the national flag carrier’s recent expansion of its fleet.
“It is vital that THAI improve its marketing system to compete with low-cost and other airlines worldwide,” he said.
The responsibility for sales operations, involving Bt170 billion revenue from ticket sales, solely rests on the vice president for sales, resulting in management inefficiency, he said.
Under the new structure, sales will be divided among four vice presidents. The first section concentrates on sales in the domestic and Indochina markets, and sales through call centre and ticket counters, which generate a combined revenue of Bt50 billion. Emphasis will be given to improving the call centre service.
The section on sales in Asia involves Bt60 billion revenue, and the section on Europe, Australia and Africa will have to deliver Bt60 billion in revenue.
The digital commerce section, which concentrates on ticket sales through the Internet and social media, is projected for a revenue increase from Bt18 billion at present by 15 percent this year and 20 percent next year.
By next year, revenue from ticket sales through the Internet must reach Bt30-36 billion, said Sorajak, expressing confidence that the restructuring would generate sustainable revenue and end the company’s financial losses.
A report on THAI flight TG679 which skidded off a Suvarnabhumi Airport runway and a review of Sorajok’s management performance were postponed to the next Board of Directors’ meeting next month.
Board of Directors chairman Ampon Kittiampon said the panel approved opening four new routes from Bangkok to Chongqing, Changsha, China and Luang Prabang, Lao PDR, to be operated by Thai Smile, THAI’s sister airline.
The new route between Bangkok and Sendai, Japan, will be operated by THAI. (MCOT)

Auto exports in August highest in 25 years despite reduced domestic sales

Thailand’s automobile exports last month reached their highest figure ever at more than 103,000 units, the highest since the country began producing vehicles for export in 1988.
Federation of Thai Industries (FTI) automotive industry group spokesman Surapong Paisitpattanapong said that the total of 103,065 units was a 17-percent increase year-on-year and a 24-percent increase from July this year. The auto export value in August reached Bt47.9 billion, or a 12-percent growth year-on-year.
According to Surapong, the export value for automobiles, engines and spare parts reached Bt68.6 billion, a growth of 12 percent from the same period last year.
Thailand exported 720,141 cars from January through August this year, counting for 97 percent of car production for export, a 12-percent increase year-on-year, with an export value at Bt328.4 billion, or an increase of 7 percent.
In August alone, 193,074 vehicle units were produced, a decrease of 9.9 percent year-on-year, while the production figure in the first eight months reached over 1.7 million units, an increase of 16.4 percent compared to same period last year. (MCOT)