Thailand-Automotive Hub of Asia

Transcription

1 Thailand-Automotive Hub of Asia Duangjai Asawachintachit Deputy Secretary General Thailand Board of Investment (BOI) April 28, 2014 Bangkok, Thailand

2 At the Center of Asia: Thailand has the World s 17 th largest manufacturer 23 rd largest industrial output 24 th biggest economy by purchasing power 28 th biggest exporter (as % of total world goods) Source: Economist Pocket in World Figures 2014

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4 The World Bank Ranks Thailand among the easiest places to do Business in Asia and 18 th in the World Source: Doing Business 2014, October 2013

5 UNCTAD Survey Top Ten Prospective Host Economies for Source: UNCTAD Investment Prospect Survey, based on 159 company responses Country Rank China 1 USA 2 India 3 Indonesia 4 Brazil 5 Germany 6 Mexico 7 Thailand 8 UK 9 Japan 10

6 2013 Country Manufacturing Competitiveness Index Rankings * ( ) = rankings Source: 2013 Global Manufacturing Competitiveness Index by Deloitte Touche Tohmatsu Ltd. And the U.S. Council on Competitiveness as of April, 2013

7 JETRO Survey of Japanese-Affiliated Companies in Asia and Oceania (FY 2012) BUSINESS OUTLOOK: ESTIMATED OPERATING PROFIT IN 2012 MAJOR INDUSTRY CATEGORIES BY COUNTRY AND REGION (COUNTRIES/REGIONS FOR WHICH N 30) Motor vehicles/ Motorcycles Electric machinery Source: JETRO Survey of Japanese-Affiliated Companies in Asia and Oceania (FY2012)

8 Thai Economy: Sophisticated World s 9 th biggest car marker (2.5 m cars manufactured in 2013) Regional hub for electrical & electronic products, consumer goods, processed food Upper middle income country with growing middle class

9 2013 Economic and Projection (% YoY) Projection Projection GDP (at 1988 price) Current Account to GDP(%) Inflation Unemployment rate Source: NESDB as of Feb 17, 2014, IMF and Bank of Thailand as of April 2014

10 Thailand: the Crossroads of ASEAN 10 Countries, One Single Market in 2015 GDP US$ 2.3 trillion Population Foreign Direct Investment 616 million US$ 111 billion GDP Growth 5.7% (2011) 6.4% (2012) 5.2% (2013) 4.9% (2014) ASEAN s GDP to double to US$4.7 trillion in 2020 Source: UNCTAD and IMF as of April,

11 Expanding Regional Integration AEC (ASEAN Economic Community) 616 million population (9% of world population) RCEP (Regional Comprehensive Economic Partnership) (ASEAN + China, Japan, Korea, India, Australia & NZ) 3.3 billion population (50% of world population) GDP: US$ 2.5 trillion (2% of world s GDP) FLAGSHIP OF ASEAN - Emerging regional architecture - A new generation FTA - A high ambition agreement Source: RCEP Seminar by DTN as of April 30, 2013 GDP: US$17.1 trillion (27% of world s GDP) THE BIGGEST FTA - Market size (16 countries) - Regional supply chain - FDI (intra-extra region)

12 Thailand s Bilateral FTAs Thai-Canada FTA Thai-TTP Thailand-EU FTA Thai-Turkey FTA Thai-Pakistan FTA Thai- BIMSTAEC Source: Thailand s FTAs, Agriculture Trade and Prospect on the ASEAN Economic Community, March, 2014

13 Regional FTAs ASEAN Economic Community by 2015 ASEAN-China Free Trade Area ASEAN-Korea Free Trade Area ASEAN-Australia/New Zealand Free Trade Area ASEAN-Hongkong Free Trade Area ASEAN-India Free Trade Area In force Expansion of Scope ASEAN-GCC Free Trade Area In pipeline ASEAN-Japan Comprehensive Economic Partnership Source: Thailand s FTAs April, 2014

14 Low Corporate Income Tax 2013 Source: KPMG ASEAN Tax Guide, as of 2013

15 Thailand s New Personal Income Tax Scheme Income Taxed amount Tax rate Old New 0-150, ,000 Exempted Exempted 150, , ,000 10% 5% 300, , ,000 10% 10% 500, , ,000 20% 15% 750,001-1,000, ,000 20% 20% 1,000,001-2,000,000 1,000,000 30% 25% 2,000,001-4,000,000 2,000,000 30% 30% More than 4,000,000-37% 35% Note: The new tax rate will be applied for 2013 tax calendar year onwards. Source: as of Jan 2014

16 BOI s Liberal Investment Regime & Attractive Investment Incentives Policy Tax Non-Tax 100% foreign ownership No local content requirements No export requirements No restriction on foreign currency Import duty exemptions/ reductions Corporate Income Tax/ Exemption for 3 to 8 years 50% reduction of corporate income tax for up to 5 years Double deduction on utility costs Deductions for qualifying infrastructure costs Land ownership rights Work permit & visa facilitation

17 BOI ZONING AND INCENTIVES

18 BOI Incentives for Automotive Makers Manufacture of passenger cars Condition: The actual production must not be less than 100,000 units/year in any year during the first five years of operation. All production must be based on the same platform approved by the Board. The total investment during the first 5 years of corporate income tax exemption must not be less than 15 billion baht, excluding cost of land and working capital. An investment plan for parts production and a plan for parts utilization must be submitted and approved by the Board. Rights and benefits: Exemption of import duties on machinery regardless of zone. 5-year exemption of corporate income tax regardless of zone. Other rights and benefits shall be granted according to BOI Announcement No.1/2543 dated Aug 1, Source: A Guide to BOI Investment as of Nov 24,2011

19 BOI Incentives for Automotive Parts (1) 1. Manufacture of vehicle parts (General parts) Incentives Exemption of import duties on machinery Exemption of corporate income tax (Cap) Zone 1-3 years (In Industrial Estate) Zone 2-3 years (Outside IE) / 7 years (In Industrial Estate) Zone 3-8 years

20 BOI Incentives for Automotive Parts (2) 2. Manufacture of vehicle parts (Hi-tech parts) ABS Substrate for catalytic converters Electronic fuel injection systems Automobile transmission Battery for electric-powered vehicles Traction motor for automobile such as hybrid or fuel cell cars Electronic Stability Control(ESC) Regenerative Braking System Electric air conditioning system for automobile Rubber tires for vehicles Classified as Priority activity Incentives - 8-yr Exemption All Zones - Import duty Exemption on Machinery Aircraft tread tires Electronic parts for vehicles

21 Living Abroad Thailand: Best Overall Expat Experience Ranking Country 1 Thailand 2 Bahrain 3 China 4 Cayman Islands 5 Australia 6 Singapore 7 India 8 Taiwan 9 Spain 10 Brazil Source: HSBC Expat Explorer 2013

22 German Automotive and Parts Companies in Thailand Robert Bosch GmbH

23 Thailand s Automotive Industry Current Situation and Trends

24 Thai Automotive Cluster and Supply Chain Structure SUPPORTING INDUSTRY MACHINERY, EQUIPMENT&DEVICE, MOLD & DIE, JIG & FIXTURE Passenger & Pick-up (17 companies, 23 factories) Motorcycle (8 companies, 8 factories) Manufacturer *Vehicles 100,000 persons Dealer, Service center 200,000 persons Vehicle Parts (386 companies) Vehicle & Motorcycle Parts (122 companies) Motorcycle Parts (201 companies) Engines,Drivetrains, Steering, Suspension, Brake Wheel, Tire, Bodyworks, Interiors, Electronics and Elec Systems Tier 1 SME (1,700 companies) Stamping, plastics, rubber, machining, casting, forging, function, electrical, trimming Tier 2 & 3 Parts Manufacturers 450,000 persons Supporting Industries 100,000 persons Service Industry Distribution (W/H) Finance Testing Consulting Logistic Banking/Leasing Upstream Industry Steel, Plastic, Rubber, Electronics, Glass, Textile, Leather, Chemical, Oil, Coating and Gulvanize 32 Associations / Institutes Universities / Technical Colleges Policy & Supporting Body Government

25 Strength of Thai Automotive Industry Top 100 Global Suppliers Active in Thai Automotive Industry Japanese Global Suppliers 2. Denso 4. Aisin Seiki 13. Yazaki 15. Sumitomo 16. Toyota Boshoku 18. Calsonic Kansei 19. JTEKT 20. Hitachi 28. Toyoda Gosei 33. NTN 34. NSK 35. Mitsubishi 39. NHK Spring 40. Koito 41. TS Tech 43. Takata 46. Bridgestone 49. Tokai Rika 57. Showa 61. Mitsuba 66. Asahi Glass 72. Stanley 74. Akebono Brake 82. Sanden 84. F-Tech 92. Alpine 94. Pioneer 98. Omron Other Global Suppliers 1. Robert Bosch 3. Continental 6. Faurecia 7. Johnson Control 8. ZF 11. TRW 12. Delphi 14. Lear 17. BASF 21. Valeo 22. Visteon 23. Autoliv 25. Mahle 27. Dana 31. BorgWarner 36. Teneco 44. Federal-Mogul 47. Michelin 50. GKN Driveline 52. Goodyear 56. Grupo Antolin 58. Bayer 59. TI Automotive 65. Draexlmaier 67. American Axle 73. Rieter Auto. 84. F-Tech 86. Hayes Lammerz 93. 3M 28/29 Companies 29/71 Companies

26 World s Automotive Production 2013 (Units of production) World s Production: Million (+3.6%) Thailand : 2.53 Million (+4.3%) #9 in World s Automotive Production #1 in ASEAN for Automotive Production Source: OICA as of Mars, 2014

27 Overview of ASEAN Automotive Industry Vietnam Population : 87 Million Production 2013 : 93,630 Units Sales 2013 : 98,649 Units Product Champion : Motorcycle Philippines Population : 92 Million Production 2013 : 79,169 Units Sales 2013: 181,738 Units Thailand Population : 67 Million Production 2013 : 2,457,057 Units Sales 2013 : 1,330,672 Units Product Champion : 1-ton Pick up & Eco-Car ASEAN Key Indicators 2013 Population GDP 616 million 2.5 trillion (US$) GDP Growth rate : 5.2% Car Production Car Total Sales 4,439,474 units 3,549,506 units Source: ASEAN Automotive Federation Indonesia Population : 240 Million Production 2013 : 1,208,211 Units Sales 2013 : 1,229,901 Units Product Champion : SUV and MPV, Big Truck Malaysia Population : 28 Million Production 2013 : 601,407 Units Sales 2013 : 655,793 Units Product Champion : Passenger Car

28 By 2018, ASEAN will be the 6 th Largest Automotive Market Globally Global Rank SALE ,708,634 11,562,701 3,524,789 3,475,760 3,173,634 2,904,338 2,593,769 2,409,826 2,204,229 1,941,253 Source: Frost & Sullivan & ASEAN Automotive Federation SALE 2015F 29,010,852 16,466,283 5,788,462 5,364,935 4,591,476 3,850,511 3,499,860 3,429,031 2,704,451 2,563,360 SALE 2018F 33,391,276 16,970,585 9,039,806 6,287,188 4,717,218 4,692,961 4,025,975 3,968,411 2,897,909 2,793,822

29 Thailand s Automotive Industry Market --4 wheels 3,000,000 2,500,000 Export Domestic 2,000,000 42% 46% 50% 1,500,000 1,000,000 31% 45% 53% 56% 54% 55% 50% 58% 54% 50% 500,000 35% 65% 69% 55% 47% 44% 46% 45% 50% 0 Source : The Thai Automotive Industry Association f 38

30 Automotive Product Categories in Thailand 2013 Source: Automotive Industry Club, FTI

31 Main players in Thailand Source: The Thai Automotive Industry Association (TAIA)

32 Total Production Capacity (4 Wheel) Production Capacity (Units) 3,500,000 3,140,000 3,000,000 2,725,000 2,500,000 2,000,000 1,576,500 1,682,700 1,866,800 1,500,000 1,208,300 1,000, , Source: The Thai Automotive Industry Association (TAIA)

33 Thai Automotive Industry Milestones Thailand is a global green automotive production base with strong domestic supply chains which create high value added for the country 2 nd Milestone 2.45 million units Rank Top 10 3 rd Milestone 3 million units 1 st Milestone 1 million units Rank 15 th Source: The Thai Automotive Industry Association (TAIA) 42

34 Strength of Thai Automotive Industry Pick-up Truck Toyota Motor Asia Pacific Engineering & Manufacturing 1 st Product Champion Honda R&D Asia Pacific Isuzu R&D Nissan Technical Center South East Asia Denso International Asia (R&D) R&D Center Thailand HUB Eco-Car 2 nd Product Champion Source: The Thai Automotive Industry Association (TAIA)

35 Eco-Car Program Product Eco Car 1 Eco Car 2 Engine Type Benzene 1,300 cc Benzene 1,300 cc Diesel 1,400 cc Diesel 1,500 cc Fuel consumption (Liter/100 km) 5 Liter 4.3 Liter Emission Standard Co2 (g/km) Euro 4, Co2 < 120g/km Euro 5, Co2 < 100g/km Minimum Investment (MB) 5,000 6,500 Minimum Production 100,000 units/year (from 5th year) 100,000 units/year (from 4th year) 10 applications received with total capacity of 1.58 M units Production to start by 2019

36 Incentives: BOI Incentives for ECO-CAR 2 1. Exemption of import duty on machinery regardless of zone for the period approved by the Board 2. Up to 90% reduction of import duties on raw materials for the period of not more than 2 years 3. Exemption of corporate income tax for the period of not more than 6 years regardless of zone. Exempted tax shall not exceed the investment value of the project excluding cost of land and working capital 3.1 One additional year of corporate income tax exemption will be granted if there are investment or expenditures in developing Thai parts, tool and die manufacture not less than 500 million baht within the first 5 years of corporate income tax exemption period. * 3.2 Two additional years of corporate income tax exemption will be granted if there are investment or expenditures in developing Thai parts, tool and die manufacture not less than 800 million baht within the first 5 years of corporate income tax exemption period. * Note: *The investment plan or expenditures must be approved by the Board of Investment.

37 BOI SERVICES

38 BOI SUPPORT SERVICES Investment Matchmaking Program 1-Stop for visas & work permits: work permits in 3 hours Subcontracting Development Program by BUILD Unit ASEAN Supporting Industry Database Interaction with other govt. agencies on behalf of investors Country desks Overseas offices 50

39 ASEAN Supporting Industry Database (ASID) Information and profiles of companies in supporting industries and manufacturers of parts and components in 10 ASEAN countries ASID can be easily accessed via the internet at Contact: BOI Unit for Industrial Linkage Development (BUILD) Tel: ext. 7

40 More Convenience, less time, more efficiency! 18th Floor, Chamchuri Square Building 319 Phayathai Road, Pathumwan Domestic Call: , Inter. Call: (66 2) osos@boi.go.th 52

41 Where to contact us in Germany BOI OFFICE IN GERMANY Mr. Chanin Khaochan Director Thailand Board of Investment, Frankfurt Office Bethmannstrasse 58, Frankfurt am Main, Germany Tel.: Fax: Website: