AFG looks into a (bleak) future?

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The Automotive Focus Group (AFG) was addressed by Chaiyant Savanachai, the Deputy Managing Director of Thai Steel Cable Public Company Limited. Chaiyant is very well qualified to comment on the Thai automotive sector, having a Bachelor Degree in Engineering from King’s Mongkut Ladkrabang, Master of Art in International Economics from Temple University Japan, a PhD in International Organization Management from the American University of London, combined with undoubted expertise in Manufacturing Strategy and Operations.

He began his discourse with the words, “Thailand’s auto industry is not in good shape.” With Thai Steel Cable supplying many of the OEM’s he could see at first hand just how the OEM’s were doing. In his company, they had the capacity for two shifts daily, but were currently only running one. Other Tier 1 and Tier 2 suppliers were in a similar position.

Chaiyant Savanachai, the Deputy Managing Director of Thai Steel Cable Public Company Limited says, “To survive, you need to go global.”Chaiyant Savanachai, the Deputy Managing Director of Thai Steel Cable Public Company Limited says, “To survive, you need to go global.”

Chaiyant then made the AFG members aware of the true situation in Thailand where rice prices are almost 50 percent down on the (artificially inflated) pledged rice prices of 2013.

That picture was also seen in the rubber producers with the market price also 50 percent down.

Unsold new vehicles were mounting up with an estimated 50,000 in warehouses.

Other sectors such as agriculture, fishing and the garment industry were also in trouble, and it is obvious that Thailand is relying on government spending to reverse the picture.

Chaiyant then addressed the issues with the forthcoming AEC at the end of 2015. Principal among these was just the sheer population inequality with Indonesia having three times the number of people compared to Thailand. As Indonesia’s industries grow, it has a huge number of people who will want cars and motorcycles.

Whilst Indonesia’s demands for product will assist their motor industry, the quality of the final goods does not do well in comparison with Thailand, and Chaiyant felt that Indonesia will need parts from Thailand.

He has a long range plan for Thai Steel Cable which will assist his company, but planning needs to be done. His final words were: “To survive, you need to go global.”