Japanese parts suppliers in Thailand: expansion of production capacity and other ventures

Tigers Polymer, Toray, Nippon Light Metal, Nittan Valve, Aisin Chemical, JTEKT, Panasonic, etc.

2016/11/08

Summary

Map of automotive plants in Thailand (click to see a map of facilities)

 The following is a report on Japanese parts suppliers in Thailand. It will look at initiatives including the construction of new production facilities, production capacity augmentation, operational structure and development function enhancement, and production item expansion (covering a period of roughly one year leading up to late September 2016).

 The number of automobiles produced in Thailand between January and August 2016 has recovered to 1.304 million vehicles (a year-over-year (y/y) increase of 3.4%). Although domestic sales have dropped for some models due to the introduction of a new commodity tax in January 2016, healthy sales of SUVs and pickup trucks that were relatively unaffected by the tax led to vehicles sales of 493,000 units for a y/y increase of 0.2% in the period January to August 2016. Exports also increased y/y by 1.0% to 788,000 vehicles during the same period.

 There have been no changes to the strategies of Japanese OEMs that use Thailand as a global export base. Although sales in the Thai market were expected to expand in the second half of 2017, there is concern that the death of the King of Thailand may have negative effects on consumer sentiment.

 In the midst of these events, Thai-based Japanese automotive parts manufacturers are continuing to actively expand production capacity to support increases in mid-term demand and exports, expand production items, and strengthen cost competitiveness. Additionally, other trends are visible including enterprise integration or formation of joint ventures to newly enter market or strengthen operations, and the establishment of new development companies.




Trends of Japanese automobile parts manufacturers in Thailand

New companies Kuraray (butadiene derivatives), Saitama Kiki (steering parts for large vehicles), Daido Steel (forged parts for transmissions), Toray Hybrid Cord (automotive cords), Marugo Rubber Industries (vibration-proof rubber)
Expansion of production capacity <New plants>
Tigers Polymer (fourth plant for air conditioner ducts, etc.), Toray/Toray Carbon Magic (transferred to new carbon fiber-reinforced plastic parts plant), Nippon Light Metal Holdings (second plant for aluminum secondary alloy) 
<Expansion  of plants or delayed plans>
Mitsuchi (new building for seat framework mechanism parts), Jatco (delayed expansion of CVT plant)
<Enhancement of facilities>
Nittan Valve (new engine valve rationalization line), Press Kogyo (new line for pickup truck parts)
New production items at existing plants <New plants and companies>
Aisin Chemical (new construction of a plant for automatic transmission-use wet friction materials), Kobe Steel (establishment of a joint venture for special steel wire materials), JTEKT (construction of a second plant, steering wheel cloth, shell bearings), Nachi-Fujikoshi (forged and machined parts production company established for integrated production of bearings)
<Enhancement of facilities>
Sumitomo Riko (establishment of an exclusive line for plastic hose modules), Toray (new production equipment installed for PPS resin compound), Panasonic (production line installed for heat-resistant phenolic resin molding materials used in onboard parts)
Strengthening of business structures Asahi Tec(plant’s aluminum business made independent), JTEKT(comprehensive base for Southeast Asia established in Thailand), Nippon Steel & Sumitomo Metal (business integration of two sheet metal companies), Nissin Kogyo(joint venture established to strengthen brake business), Futaba Industrial(legal liquidation of press mold-related company), Meiwa Industry(acquired complete ownership of interior parts company)
Development <Establishment of new companies>
Denso Corporation/Toyota Tsusho Corporation (joint venture established to strengthen onboard software development)

(Source) Created from each company’s plans

 Trends of Japanese automobile parts manufacturers in Southeast Asia aside from Thailand are reported in the report “Japanese Parts Manufacturers in Southeast Asia: Indonesia, Vietnam, Malaysia, The Philippines, Laos” from July 2016.

Japanese Supplier Reports: