Auto imports Thai one on

MOST Australians regard Thailand as a destination for cheap holidays and spicy food, but our Asian neighbour is growing into a regional automotive superpower.

Australian manufacturers are coming under pressure from cheap products imported without the usual duty thanks to a free-trade agreement struck in 2005.

Sometimes, the Australian car-makers come under pressure from the Thai divisions of their own global organisation. Toyota Australia is locked in negotiations to build the next generation Kluger and must beat Toyota Thailand to win the project.

Ford Australia has just binned its Focus production plan because it can’t compete with a ‘low-cost source’ in Asia. It won’t name the production location, but it is most likely Ford’s plant in Thailand which will begin producing the Fiesta from next year.

With minimal shipping costs, low labour costs and zero import duty, it comes as no surprise that imports of Thai-made vehicles to Australia have almost doubled since 2005. In that year, 84,831 Thai-built cars were sold in Australia, compared with 78,719 vehicles from South Korea.

In 2008, Australians bought 154,607 Thai-made cars and 96,437 cars made in South Korea.



Of course, Japan is still the number one source of cars sold in Australia with 378,437 of its vehicles sold here last year, about the same amount that came here in 2005.

Thailand has picked a winner by producing mainly commercial vehicles. All of the top-selling ladder-frame work utes, including the Toyota Hilux, most Nissan Navaras, the Holden Colorado, Isuzu D-Max, Ford Ranger and Mazda BT-50, come from the kingdom.

The 4x4 versions of these vehicles are rapidly growing in popularity in Australia, now representing about 8.2 per cent of the total new vehicle market compared with 6.3 per cent in 2005.

Thai operations also make most of the high-volume vehicles in Honda’s Australia range, while other brands are planning to source cars from there in future. GoAuto understands that Toyota Australia is set to take the next-generation Yaris light car from Thailand and Nissan could take the new Micra from there in 2010. Suzuki is also looking to source vehicles from there.

The Thai government introduced new incentives for domestic car-makers to produce fuel-efficient cars that use less than 5 litres per 100km, and has also slashed the import tariffs on hi-tech green components for locally produced cars that are not currently made in Thailand.

Honda is also looking to use a new free-trade agreement with India to source cheaper steel and some components from the emerging economy to drive down production costs in Thailand even further.

With Thai imports to Australia increasing dramatically, it is worthwhile looking at how many cars Australia has exported to Thailand in the last few years. Unfortunately, that number is zero.

Ford Australia looked at taking advantage of the new free-trade agreement to export the Territory, while Holden investigated shipping some Commodores, but the Thai government legislated for a 50 per cent excise on cars with an engine size of 3.0-litres or more, pricing them out of the market.

Last year, federal industry minister Kim Carr told GoAuto that such non-tariff barriers were a concern, and former Ford Australia president Bill Osborne labelled them archaic.

A new opportunity may arise from 2011 with Ford introducing a 2.0-litre Falcon that would dodge that tax. While Ford Australia said it didn’t make the decision to offer a four-cylinder Falcon based on any increased export potential, it wouldn’t hurt to add some extra volume and send something to Thailand for a change.