Thailand : Isuzu ready for GM powertrain plant

BANGKOK : October 1, 2008 - Isuzu expects to be unaffected by the plan of its customer General Motors to build a powertrain plant in Thailand, because Isuzu's own pickup trucks can absorb the total capacity of its diesel engine factory at Lat Krabang in Bangkok.


Isuzu Engine Manufacturing Thailand Co currently supplies diesel engines for Chevrolet Colorado pickup trucks in Thailand. It will cease delivery in 2010 when a similar plant built by GM for US$445 million starts production.

"We will have no problem, even when GM stops receiving products, because the excess output can be absorbed by our own pickup trucks, which are getting a boost from exports," said Morikazu Chokki, president of Tri Petch Isuzu Sales Co, the local distributor of Isuzu vehicles.

He said Isuzu's pickup exports were healthy, though some European markets would be hit by the US financial crisis.

The Middle East market, Isuzu's biggest export market, continues to grow. Isuzu has also extended its pickup exports to many new markets worldwide.

As a result, total export volume this year will be around 140,000 units, up from 130,000 units last year.

Mr Chokki acknowledged that domestic political uncertainty has damaged consumer confidence. However, he expects the downward trend in oil prices, the harvest season and export growth to boost vehicle sales in the last quarter of the year, the high sales season.

Thailand's automobile market may have total demand between 650,000 and 660,000 units by the end of this year, slightly better than total sales of 631,251 units last year, he said.

Pickup trucks are expected to be between 55% and 60% of this year's total automobile market, with Isuzu accounting for 150,000 units.

Record-breaking diesel prices in recent months had shocked consumers, deterring them from buying pickup trucks and bringing the market down, said Mr Chokki. But several rounds of diesel price cuts helped sales revive.

GM plans to make 2.5-litre and 2.8-litre diesel engines for pickup trucks at its plant in Rayong, with an annual capacity of more than 100,000 units.

Toyota Motor Thailand has also announced an investment of 5.4 billion baht to expand diesel engine production in Thailand from 200,000 to 350,000 units per year. Its new plant should begin commercial production in 2010.

Mr Chokki said Isuzu also intends to expand its diesel engine plant but has yet to finalise an investment plan.

Meanwhile, the Isuzu group in Thailand signed an agreement yesterday with the Vocational Education Commission (VEC) to develop skilled technicians for automotive factories.

Under this 50-million-baht agreement, Isuzu will supply 155 commonrail diesel engines and teaching kits and provide a training programme for instructors in 155 vocational schools and colleges.

[Source : Bangkok Post]