Nissan Motor Co., Japan's third- largest automaker, will export Thai-built Navara pickup trucks as it expands its use of the Southeast Asian country as a low- cost production base.
Nissan, based in Tokyo, will start shipping its new one-ton pickup truck to more than 100 countries from August, said Carlos Ghosn, Nissan's chief executive officer, in an interview in Bangkok. He didn't specify the quantity.
General Motors Corp., Toyota Motor Corp. and Ford Motor Co. have boosted production of trucks in Thailand to take advantage of lower production and part costs and tax breaks. Nissan is spending 29 billion baht ($911 million) to increase its Thai output by more than half to 200,000 vehicles by the end of 2008, making it the company's third-largest manufacturing base in Asia after Japan and China.
``The costs in Thailand are very competitive,'' Ghosn said during a visit to Nissan's plant in a suburb of capital Bangkok. ``Thailand is the other export base that we have built outside of Japan.''
Nissan still lags behind Toyota, GM and Ford in exports from Thailand. The Japanese automaker shipped 2,637 automobiles, or 1.7 percent of total vehicle exports, in the January-March period, according to Toyota's Thai unit which compiles the data.
Truck Demand
Automobile output in Southeast Asia's biggest vehicle market may rise 1.5 percent to 893,000 units this year, more than two-thirds of which are one-ton trucks, Toyota's Thai unit said in January.
Expansion by automakers benefits local companies such as Hemaraj Land & Development Pcl, Thailand's second-biggest industrial land developer.
``There remains upside potential for investment in Thailand's automotive sector,'' said David Nardone, the company's chief executive officer said. ``Japanese automakers are moving their production of pickup trucks to Thailand for exports. That brings along their suppliers.''
Hemaraj raised its forecast for land sales in 2007 by 18 percent as producers of cars and petrochemicals expand their plants, Nardone said on June 26. The company in May signed a contract to sell about 118 acres of land to Thai Summit Co. Ltd., an auto-part maker, he said.
Economic Growth
Thailand's economy posted faster-than-expected growth of 4.3 percent in the first quarter as exports of automobiles and other products helped counter a slump in domestic consumption and investment.
Exports in May rose 21 percent to a record $13.1 billion led by a 32 percent rise in shipments of automobiles and parts, the commerce ministry said on June 20.
Listed Thai auto parts manufacturers and other companies that service the industry are recommended as ``a good sector that people might look at,'' said Asoke Wongcha-um, who helps manage the equivalent of $7 billion of mostly-Thai assets at Kasikorn Asset Management Ltd. in Bangkok. Nissan will benefit from robust economies in its export markets while confidence recovers in Thailand, he said.
Nissan in November began exporting Tiida sedans to Australia from Thailand. The company also plans to export 11.5 billion baht worth of parts every year from the country, making it Nissan's second-largest production base for parts for export after Japan, it said in November.
Political Concerns
Ghosn said he is worried about the current political situation in Thailand because it affects consumer demand for new vehicles in the domestic market.
Thousands of protesters have staged weekly rallies to support former Prime Minister Thaksin Shinawatra and demand the resignation of army chief Sondhi Boonyarataklin and other military leaders.
Thailand's new vehicle sales dropped 7.8 percent in May, a fifth straight month of decline, as falling consumer confidence curbed demand in Southeast Asia's biggest automobile market, Toyota's Thai unit said on June 12.
``For a car manufacturer heavily invested in Thailand, it's not sufficient to have just a good export base,'' said Ghosn. ``We're following, just like anybody else, the situation with a lot of attention, hoping that it will stabilize very soon.''
