THAILAND: German tyre-maker mulling Thailand or China for new plant

German automotive group Continental will decide in September whether to choose Thailand or China as its new tyre-manufacturing site.

Sirivan Koo-Amphorn, general manager of Continental Tyres Thailand, said she would soon meet with Thai Deputy Prime Minister Somkid Jatusripital to hear what incentives and support the government could offer to the proposed project, in addition to the Board of Investment's privileges.

"China has offered us a free plot of land. But we [Thailand] have some advantage because made-in-China tyres are not well accepted in Asia-Pacific except in Australia," she said.

The proposed tyre project would serve not only the Thai market but would also be for export to other countries in the region, she said.

Sirivan said Continental hoped to win support from the government considering the fact that tyre manufacturing is one the targeted industries that the government has decided to promote because of its benefit to rubber planters.

Sales of Continental tyres in Thailand have grown fourfold since 2012, though its market share is still less than 3 per cent. The German automotive group aims to increase that share to 10 per cent by 2025 if it can establish a factory here, or by 5 per cent if there is no factory.

The company currently imports tyres from Malaysia, where it has a production base.

Despite a sluggish tyre market overall, Continental increased its sales in Thailand by more than 20 per cent during the first half of this year and expects them to grow even more in the second half, thanks to an expansion of its dealership network. The company plans to add 100 dealers to its current network of nearly 300 over the next 12 months.

The company will also set up its first two "ContiShops" in Thailand, as well as start penetrating the pickup-truck, sport-utility and van tyre markets next year. It currently focuses only on the high-inch tyre segment (16-inch rim and up).

Sirivan said Continental Tyres Thailand booked 20-per-cent growth in sales revenue to nearly Bt1 billion last year, despite a decline in the OEM (original equipment manufacturer) market.

Meanwhile, Continental announced that it had chosen Thailand as the first market in the Asia-Pacific region to have its ContiPressureCheck (CPC) tyre-pressure monitoring system. Equipped with sensors mounted inside the tyre and a control device and receiver attached to the chassis, CPC is aimed at reducing fleet costs by ensuring proper tyre use and maintenance.

Sirivan said CPC's initial targets included major fleet operators of buses and hazardous-goods trucks. It aims to sell 4,000 tyres equipped with the system this year.

Unlike in Europe where it works on an open-system platform, Continental has joined forces with GT&T Engineering, a Singapore-based provider of vehicle-tracking systems, to launch the CPC system to Thailand, Malaysia, Singapore and Australia.

Srun Pitaksit, managing director of Global Positioning Liberty System, a company that is working with GT&T to deploy the CPC system in Thailand and other markets, said fleet operators would not have to pay for the hardware but only a monthly fee of a few hundred baht for using the system.

Besides saving fuel, extending the tyre's life span and reducing the chance of accidents, CPC will help tackle the No 1 problem in Thai fleets, tyre theft, he added.

Source: Daily “The Nation”, Bangkok; 30 July 2016

(Syed Rashid Ali, Karachi, Pakistan)