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Japan's Toyota Motor Corp, the world's third largest automaker, is set to balance its production in Asean and China by the end of the decade with a volume of 800,000 units each, of which 500,000 units would be produced in Thailand, according to an auto expert and former Toyota executive.
But with the threat of stiff competition from China, Thailand must further develop the sector in the areas of human resources, engineering capabilities and supporting industry strengths within three years, said Toyoharu Fujimoto.
Mr Fujimoto, now an adviser to Thai Automotive VCF Co _ the country's first automotive venture capital fund _ said Thailand was positioned by automakers as an automotive manufacturing and engineering hub for ``specific models''. With automakers shifting their focus to China to tap the huge market volume, many are trying to minimise the risk by setting up production facilities elsewhere.
To meet the 2010 production plan, Toyota is raising its production volume from 254,000 units in Asean and 20,000 units in China as of 2001. Asean is now the Japanese firm's third largest manufacturing base after its home country and North America.
Aside from being a production hub, Thailand will serve as a technical centre for Toyota with plans to have 1,000 engineers on its payroll next year.
As well, Denso, one of Toyota's major suppliers which is partially owned by the automaker, has moved its production of diesel engine injection pumps to Thailand with plans to export output worldwide. Other Toyota-related companies plan to follow suit.
In order to take advantage of what might be in store for the future, Mr Fujimoto said Thai manufacturers must beef up their engineering and production design capabilities.
``A challenge is that we (Thailand) have to achieve both cost and quality competitiveness, meaning we have to meet the Japanese quality standards with Thai (production) costs,'' he said.
Mr Fujimoto, who has worked with Toyota in both Japan and Thailand, said vehicle production in Thailand would increase steadily from 600,000-plus units this year to exceed one million units by 2005 before tripling to 1.8-2 million by the end of the decade, with the export ratio rising from the current rate of 45% of total production.
To boost exports, Thailand must diversify its product range beyond one-tonne pick-ups which has a limited market. One potential vehicle to be considered is one-litre passenger cars.
Export could reach one million units by 2010, Mr Fujimoto, said while as the same time expansion of the local vehicle market is highly possible, depending largely on the development of the Thai economy.
The ratio of cars to people in Thailand is currently one car per 12 people. This compares to the world average of 1:4 and one car per 2.5 people in the United States.
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