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PSR Analysis: The Indian Automotive Industry was largely left disappointed with the budget after no direct steps were taken to arrest the decline in automotive sales. Although keeping long term benefits in mind, the budget did introduce measures to boost the rural economy, which in turn will directly benefit the commercial vehicle industry which is an important driver for the economy.
THAILAND–Vehicles produced in Thailand are exported to the world, including Asia, Oceania, the Middle East and Europe. However, the automobile industry is in trouble because of the double punch of the global economy slowing down due to the US-China trade friction and the spread of the new coronavirus.
Akihito Komuro
Exports, which account for half of Thailand’s automobile
production, where Japanese and other automakers such as Toyota and Honda have
production bases, have fallen, and vehicle production turned negative for the
first time in five years in 2019. In addition, the spread of the new
coronavirus is catching up. It is expected that the impact on Thailand’s
automobile industry will be even greater if the shutdown of factories in China
and production cutoffs are prolonged and parts procurement is delayed.
PSR Analysis: From about September 2019, it has been reported that many Southeast Asian automobile industries, including Thailand, have begun to slow down, but this has been attributed to a slowdown in trade due to US-China trade friction.
Today, of course, there is the same problem, but the rapid spread of COVID-19 is a new problem. Many automotive industries around the world are supported by the supply of parts from China, and a slowdown in supply could severely impact car production. Especially in Southeast Asia such as Thailand and Indonesia. PSR
Akihiro Komuro is a Research Analyst covering the Far East and Southeast Asia for Power Systems Research.
My other article in this month’s issue of PowerTALK News describes how home battery systems, even though they are not themselves viable products for most consumers, still benefit from a virtuous cycle of product improvement and investment because of the relative success of battery-powered vehicles and other battery-powered products.
Tyler Wiegert
But the COVID-19 pandemic has not missed those drivers. Venture Beat magazine reports that investors are largely avoiding lithium this year, preferring to safeguard cash until the economy starts to improve. The delay in funding could have several knock-on effects.
One is consolidation in the industry. Ganfeng Lithium is picking up a lithium project from Lithium Americas, a smaller operation. Fewer, larger players in the market later on might have price consequences for lithium adoption after the economy improves and demand for those goods increases.
Move is opposed by Russian KAMAZ which plans to make similar machines.
Maxim Sakov
Market players have proposed canceling import taxes and utilization fees for commercial vehicles fueled by LNG until 2025. The target of the measure is the development of LNG-transport until the appearance of domestic analogs of such machinery.
The suggestion comes from foreign makers of LNG on-highway tractors and supported by Gazprom. Now, no imported vehicles are exempted from these taxes.
The import tax for on-highway tractors is 5% of their cost, and the utilization fee is 10 to 12K Euro. LNG tractor is more expensive than its diesel analog by about 35K Euro.
The Russian automotive sector is expanding and has a good chance to meet existing payable demand, reports industry minister Mr. Manturov. He said the domestic market has taken fourth place in Europe by volume for the first time.
Car sales have been growing the last three months, and dealers are talking about a shortage of inventory. If the production does not recover until Spring, the market will be short, they say. But the minister said OEMs will handle this challenge easily.
LG Chem says it will build a cathode material plant for automotive battery materials in Gumi, central South Korea. LG Chem has the second largest automotive battery business in the world. They will continue to invest in increasing production in the materials field to meet the increasing demand and plans to start mass production by 2025 and will build a dedicated line for cathode materials with high nickel content, called NCMA, which can increase the output of batteries.
LG Chem’s new plant will be its fourth; it has two cathode material plants in operation in Korea and one in China. The current production capacity is 80,000 tons. LG Chemical produces its own cathode materials, separation membranes, and adhesives, and supplies them to LG Energy Solution, its battery subsidiary. LG Chem is working with Toray Industries, Inc. to secure the amount of separation membrane to be procured.
Changan Automobile Group, a major Chinese automobile manufacturer, will establish a new plant for electric vehicles such as EVs in Thailand, according to the Board of Investment of Thailand (BOI). The investment will be US$ 284 million (9.8 billion baht or about 38 billion yen), and construction is expected to be completed within a few years. The initial production capacity will be 100,000 vehicles a year, and on-board batteries will also be manufactured. The Thai government has established an incentive program to encourage local production of EVs, and Chinese EV giants have been actively investing in the country.
In addition to EVs, the new plant will produce electric vehicles such as HVs and PHVs. The company plans to supply vehicles to Southeast Asian countries, Australia, South Africa, and other markets.
Chinese automotive equipment manufacturer Suzhou Harmontronics Automation Technology plans to build an electric motorcycle factory in Thailand’s Eastern Economic Corridor (EEC), eyeing a market set to grow, thanks to government subsidies.
The company plans to invest $281 million (10 billion baht) to secure annual production capacity of 150,000 units by 2028. The plans were revealed by the office of the EEC.
Suzhou Harmontronics will build the factory at an industrial park in Chonburi Province, within the EEC zone, and will assemble electric motorcycles and manufacturing replaceable batteries and charging equipment at the facility. A start date for operations was not disclosed.
Editor’s Note: This report includes a conversation with Miguel Elizalde Lizárraga, the executive president of ANPACT (the National Association of Bus, Truck and Engine Manufacturers) and a visit to the Expotransporte 2022, the largest truck show in Latin America.
Lorena Violante
ANPACT represents the trucks, buses and engine manufacturers in Mexico. It participates actively with government organizations and other important related associations to ensure the truck and bus industry gets enough support, incentives, alliances, agreements and information to grow in the local market. Also, to continue with their outstanding role as one of the most important exporters of heavy duty vehicles globally.
The ANPACT gathers the most important trucks, buses and engine manufacturers in Mexico such as Kenworth, Freightliner, International, Mercedes Benz, Man, Volkswagen, Scania, Dina, Mack, Volvo, Isuzu, Hino, Detroit and Cummins.
During our conversation, Elizalde provided timely insights into the Mexican transportation industry and the major market challenges this country is facing today.
Chris Fisher
Vehicles manufactured in Mexico produce an important impact on the country’s economy, logistics and mobility. For example, 71% of the foreign trade value is moved to the US through heavy duty trucks. Much of the movement of goods in Mexico is through trucks, and people use buses as their main transportation.
According to ANPACT´s August statistics, manufacturers produced a total of 127,858 heavy duty vehicles from January through August this year. This is 18% more than 2021 production. Through August, export volumes increased by 15.7% (106,824 units) compared to 2021. Retail demand has increased so far by 20.5% (25,196 units).
Current challenges the transportation industry is facing today in Mexico include road safety, environmental regulations implementation, supply chain lead times, driver shortage, e-commerce, vehicles renewals, safety and energy infrastructure.
Power Systems Research had a booth presence at the 2019 North American Commercial Vehicle (NACV) show that took place at the World Congress Center in Atlanta, GA, Oct. 28-31, 2019.
The NACV featured a “Technology Showcase” where many of the leading OEMs and supply chain companies put their latest market introductions on display. There were over 500 exhibitors at the show – assembled in both Exhibition Hall A and Exhibition Hall B of the World Congress Center.
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