Challenge of Mechanical and Automotive Engineering Program in Thailand to Support Thailand s Automotive Industry
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1 Challenge of Mechanical and Automotive Engineering Program in Thailand to Support Thailand s Automotive Industry Yossapong Laoonual, PhD Committee, Thai Society of Mechanical Engineers (TSME) Assistant Professor Department of Mechanical Engineering King Mongkut s University of Technology Thonburi (KMUTT) Special Expert (joint appointment with KMUTT) Thailand Automotive Institute (TAI) Baden-Württemberg Forum Bangkok, 28 th April 2014, BITEC Bangkok, Thailand
2 Contents Thailand s Automotive Industry Challenge of Automotive R&D in Thailand Role of Higher Education in Thailand s Automotive Industry Conclusion 2
3 Thailand s Automotive Industry During 1960s Auto industry regarded as a major driver of Industrialization BOI passed Industrial Promotion Act and provided incentives for foreign investment in car assembly (50% reduction of import duties and trade taxes) Auto industry caused a substitution trade deficit from import parts. The policy changed from import substitution to export promotion and import of completely built up (CBU) units were banned to promote local production and instituted local content requirements Thailand announced its first motorcycle industry policy (50% of motorcycle assembly parts be locally produced and later increased to 70%) Source: Nittaya Wongtada and Tatchawan Kanitpong (2011) Thailand: Automotive and Auto Parts Industry in Facets of Competitiveness: Narratives from ASEAN, World Scientific Publishing Co. Pte. Ltd. 3
4 Thailand s Automotive Industry Successful period in Thailand s economic development which attracted the investment of Japanese auto parts makers Establishment of Thailand Automotive Institute (TAI) to coordinate industrial strategies in Regarded Thailand as Detroit of Asia Present BOI announced new eco-car phase 2 scheme. Ten OEM have official applied Asia Financial Crisis In 2007, BOI announced its investment promotion scheme for Eco-car manufacturing. (Exemption on corporate income tax and import duty of production machinery and up to 90% for raw material) Source: Nittaya Wongtada and Tatchawan Kanitpong (2011) Thailand: Automotive and Auto Parts Industry in Facets of Competitiveness: Narratives from ASEAN, World Scientific Publishing Co. Pte. Ltd. 4
5 Thailand s Automotive Industry Assembler (Car 17 Companies, Motorcycle 7 Companies) Foreign J/V LSEs Tier 1 (Total 648 Companies) Foreign Majority 47 %. Thai Majority 30 % Pure Thai 23 % SMEs Tier 2,3 (1,700 Companies) Local Suppliers [* LSEs : Large Scale Enterprises SMEs : Small & Medium Enterprises] Source: Thailand Automotive Institute, April
6 Thailand s Automotive Industry Thailand s Automotive Industry Growth, (thousand) 2,500 Domestic sales Export Production 2,454 2,456 2,000 1,500 1,645 1,458 1, ,125 1,194 1,301 1, Note: Including passenger car, pick up 1 ton, van, bus, truck. Excluding motorcycle. Source: Thailand Automotive Institute (TAI) April
7 Thailand s Automotive Industry Import Export of Thailand s Automotive Industry Source: Thailand Automotive Institute (TAI), April
8 Challenge of Automotive R&D in Thailand Automotive Technology Roadmap for Thailand Source: Study of Technology Road Map for Thailand s Automotive Industry by MTEC, NSTDA & TAI in 2010 Photo: Thailand Automotive Institute (TAI), Ministry of Industry (2012) Master Plan for Automotive Industry
9 Challenge of Automotive R&D in Thailand Toward Production & R&D Base We have trained them (Thai people) to produce the cars and now the locally made cars are being exported around the world. The fact that customers in so many countries are continually buying these cars shows that Thai work quality is excellent. Toyota understands that the potential of the Thai people is very high. In the future looking beyond production to R&D, there may be the chance that our Thai employees will design the cars as well as produce them. - Mr. Kyoichi Tanada - President of Toyota Motor Thailand and President of the Japanese Chamber of Commerce in Bangkok Source: BOI (2012) Thailand s Automotive Industry. 9
10 Challenge of Automotive R&D in Thailand R&D and Technical Centers in Thailand Types 1991 ISUZU Technical Center of Asia 1997 HONDA R&D Southeast Asia Co., Ltd. (Motorcycle and multi purpose engine) 2007 change to TOYOTA Motor Asia Pacific Engineering and Manufacturing Co.,Ltd DENSO International Asia Co.Ltd. OEM 1 st Tier THAI SUMMIT R&D Next Technology Co., Ltd. TOYOTA Technical Center Asia Pacific Co.,Ltd. HONDA R&D Asia Pacific (Automobiles) NISSAN Technical Center South East Asia 10
11 Challenge of Automotive R&D in Thailand Master Plan for Automotive Industry Source: Thailand Automotive Institute (TAI), Ministry of Industry (2012) Master Plan for Automotive Industry
12 Challenge of Automotive R&D in Thailand Thailand Automotive Institute According to Master Plan for Automotive Industry , Thailand will focus on excellence in research and development (R&D), and will step forward to be the leader in R&D in terms of research center of the ASEAN Economic Community (AEC) in Mr. Vichai Jirathiyut - President of Thailand Automotive Institute ตามแผนแม บทอ ตสาหกรรมยานยนต ป ประเทศไทยจะม งเน นส ความเป นเล ศด านเทคโนโลย การ ว จ ยและพ ฒนา และก าวส การเป นประเทศท ม ศ นย ว จ ยและพ ฒนาด านยานยนต ของประชาคมเศรษฐก จอาเซ ยน (เออ ซ ) ป ค ณว ช ย จ ราธ ย ต - ผ อำนวยกำรสถำบ นยำนยนต Source: MCOT. New president of Thailand Automotive Institute (TAI) emphasized that Thailand will be number 1 for automotive production base [in Thai]. URL: 24 th April
13 Challenge of Automotive R&D in Thailand OEM and 1 st Tier 2 nd Tier and SME Customer demand on fuel-efficient vehicle Lack of technological advancement Strictly requirement on the pollution and safety standard and regulation Upgrading Thai local SMEs to be regional/ global suppliers Insufficient number of engineers/researchers/workforce 13
14 Challenge of Automotive R&D in Thailand Additional Right and Benefit of Eco-car Phase 2 Scheme Corporate Income Tax Exemption Note - Exempted tax shall not exceed the investment value of the project excluding cost of land and working capital - The investment plan or expenditures in developing Thai Auto-part suppliers and mold & die manufacturers must be approved by the BOI Normal incentive 6 years, regardless of zone Additional right and benefits Additional one more year shall be granted if the project invests or spends on development of Thai auto parts suppliers and mold & die manufacturers of not less than Bt500 million during the first five years of corporate income tax exemption period. Additional right and benefits Additional two more years shall be granted if the project invests or spends on development of Thai auto parts suppliers and mold & die manufacturers of not less than Bt800 million during the first five years of corporate income tax exemption period. Also import duty exemption on machinery is provided. Source: BOI (2013) Eco cars: Modest or No Greenhouse Gasses, Industrial Focus, Thailand Investment Review, Dec 2013, Volume 23, No
15 Role of Higher Education in Thailand s Automotive Industry Mechanical Engineering Automotive Engineering Automotive Engineering Program Most automotive engineering program based on mechanical engineering program. Available automotive programs in Thailand B.Eng. in Automotive Engineering Non-B.Eng. in Automotive Technology M.Eng. in Automotive Engineering 15
16 Role of Higher Education in Thailand s Automotive Industry Subjects Required for Automotive Engineering Program Production & Manufacturing Basic subjects on mechanical engineering. Incorporating elements of electrical, electronics, production, software and safety engineering. Specific subjects based on main component parts in automotive technology and innovation. Comfort and Safety Economics Vehicle Dynamics Automation and Controls Materials Electrical & Electronics Structure, Body & Aerodynamics Car Photo : 16
17 Role of Higher Education in Thailand s Automotive Industry B.Eng. Program in Automotive/Mechanical Engineering in Public University Chulalongkorn University B.Eng. in Automotive Engineering (Thai Program) B.Eng. in Automotive Design and Manufacturing Engineering (Inter) KMUTNB B.Eng. in Automotive Engineering Technology (College of Industrial Technology) KMUTT B.Eng. in Mechanical Engineering (Automotive), in preparation (Expected in 2015) Suranaree University of Technology B.Eng. in Automotive Engineering Thammasat University B.Eng. in Automotive Engineering (English Program) Prince of Naradhiwas University B.Eng. in Automotive Engineering Technology 17
18 Role of Higher Education in Thailand s Automotive Industry B.Eng. Program in Automotive Engineering in Private University Rangsit University B.Eng. in Automotive Engineering Siam University B.Eng. in Automotive Engineering Sripatum University B.Eng. in Automotive Engineering Thai-Nichi Institute of Technology (TNI) B.Eng. in Automotive Engineering 18
19 Role of Higher Education in Thailand s Automotive Industry Non-B.Eng. Program in Automotive Technology Siam University B.Ind. in Automotive Technology (2 years program) Siam Institute of Technology B.Tech. in Automotive Technology Mahachai Institute of Automotive Technology B.Tech. in Automotive Engineering Rajabha Rajangarindra University B.Sc. in Automotive Mechanical Engineering 19
20 Role of Higher Education in Thailand s Automotive Industry Graduate Program in Automotive Engineering KMITL (Joint with KMUTT) M.Eng. in Automotive Engineering (under Thailand Advanced Institute of Science and Technology and Tokyo Institute of Technology, TAIST-Tokyo Tech Program) KMUTT (Joint with KMITL) M.Eng. in Automotive Engineering (under Thailand Advanced Institute of Science and Technology and Tokyo Institute of Technology, TAIST-Tokyo Tech Program) KMUTNB M.Eng. in Mechanical and Automotive Engineering (under The Sirindhorn International Thai-German Graduate School of Engineering, TGGS) 20
21 Role of Higher Education in Thailand s Automotive Industry Current More Requirements Supply engineers to support the industry. Provide technical and policy consultation. Collaborate with manufacturers in research and development. Industry shifted from Production base To Production and R&D base Provide advanced technical training to the industry. Collaborate with OEM and supplier to design or develop the vehicle and auto parts. 21
22 Conclusion Thailand is one of major automotive production base in the region. In the medium to long term, Thailand s automotive industry will actively participate in Design, Research and Development. A large number of mechanical and automotive engineers is required to sustain the growth of the industry. Higher education institutes will not only provide the workforce to the industry, but also actively establishing joint research programs with the manufacturers of all levels. 22
23 Thank you Yossapong Laoonual, PhD Special Thanks to Dr. Kitchanon Ruangjirakit, Department of Mechanical Engineering, KMUTT for helping in PowerPoint preparation. Baden-Württemberg Forum Bangkok, 28 th April 2014, BITEC Bangkok, Thailand
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