Nowadays, the "world map" of car production is being redrawn. In the past, the world’s three major automotive markets were North America, Europe, and Japan. The protagonists were Japanese, American, and European automotive manufacturers. However, in 2003, 10 years after the end of the Cold War, the world's annual automobile output exceeded 60 million vehicles for the first time, and the competitive environment has undergone great changes. In 2002, the sales volume of North American cars was 19.8 million, Europe was 16.52 million, and Japan was 5.78 million, all basically the same as the previous year. On the other hand, China's car sales are 3.24 million, which has doubled from the previous year.
China still has great growth potential. Of the 1.3 billion people, there are 300 million people living in the wealthy class only in the coastal areas. Some people speculated that China’s auto demand after 5 years will reach 10 million. Also in Asia, South Korea's Hyundai Motor Company is also rising. It not only has the advantage of low prices, but also improves product quality. Hyundai Motor Co.'s global auto sales are 2.8 million, followed by 2.97 million Nissan and 2.91 million Honda.
Import cars from abroad
With the changes in the market environment, the production and sales strategies of car manufacturers began to change. The economy of ASEAN countries was once slumped due to the 1997 Asian financial crisis. However, 7 years later, the GDP has almost returned to its pre-crisis level. Economic prosperity and car sales are also booming, but the traffic jam in Bangkok, the capital of Thailand, is very serious. 70 kilometers north of Bangkok, there are Japanese-funded enterprises with dense industrial areas. There is a factory of Honda Thailand. Honda Muiichi, general manager of Honda Thailand, said: “The cars produced here are exported to Japan, and Thai employees are proud of this.†During the first half of the 90s of the last century, Japanese automakers imported cars from overseas production bases. It is out of political considerations. For example, Honda imported the Accord wagon from a US subsidiary. However, Honda’s import of cars from Thailand is part of its merchandising strategy.
In Japan, it is necessary to take certain risks in the production of small models. In Thailand, which is at the initial stage of automobile adoption, small cars are a popular type of vehicle. Therefore, Honda produced small cars for the Asian market in Thailand and imported Fit cars from Thailand to meet the needs of the domestic market.
Increase productivity
In the free trade zone where tariffs are reduced or exempted among member states, this supplementary system is already quite complete. Six countries including Thailand, Malaysia, Indonesia and the Philippines signed the ASEAN Free Trade Area Agreement in 1992. Now, Japan is holding negotiations with ASEAN countries on tariff reductions. In the past, if a car sold in Indonesia with a price of 1 million yen was sold in Thailand, the tax would be 1.8 million yen. For this reason, Japanese car manufacturers have to build factories in various countries. However, if it is the import and export of free trade zone members, some tariffs will be reduced or eliminated, and the circulation of finished products and parts will be easy. Japanese car manufacturers want to increase the efficiency of production and parts supply.
Toyota has implemented a division of parts and components in the ASEAN Free Trade Area, producing Thai-loved models in Thailand and Indonesian- favored models in Indonesia. Toyota has established a complementary system of parts and supplies in the ASEAN Free Trade Area. Due to poor operating performance in the 1990s, Nissan was lagging behind in its entry into the ASEAN market and did not establish a production base for parts and components. However, Nissan enjoyed the benefits of the ASEAN free trade zone. In 2002, Nissan established a branch company in Thailand responsible for purchasing parts and components, and established a system to effectively supply parts and components to ASEAN countries.
"Detroit of Asia"
Thailand has long encouraged foreign companies to enter the country, and Japanese automakers have marched to Thailand in the 1960s. Since then, many parts manufacturers have followed the march into Thailand, and Thailand's infrastructure has been quite complete. If you can purchase quality parts, you can improve the quality of assembled cars. Compared with China, which lacks high-quality parts manufacturers, Thailand has a superior environment for producing export cars. The Thai government likens Thailand to "Detroit of Asia". Its vision is not limited to the ASEAN region, but it also contends to export cars to other regions. The idea of ​​the Thai government coincides with the idea of ​​a car manufacturer seeking to reduce costs. Automobile giants such as General Motors Corp. and Toyota Motor Co., Ltd. are pushing the concept of "export bases" centered on Thailand. General Motors and Isuzu Co., Ltd. jointly developed the "D-MAX" pickup truck in Thailand and sold it to the rest of the world since 2003. Toyota started implementing the IMV plan this year. This plan aims to achieve the common use of five types of parts such as pickup trucks and urban off-road vehicles, and concentrates production in countries and regions with low labor costs such as ASEAN, Argentina and South Africa.
Japanese domestic shock
Some people pointed out that the establishment of these export bases will have a great influence on the manufacturing industry in Japan. This mode of production, which concentrates production into low-labor-cost areas, is not only for the purpose of satisfying local demand, but also meeting the needs of other regions. This reminds us of the fact that the electronics industry has established strongholds in Southeast Asia and China in the past. What is still fresh in memory is that the electronics industry related factories have gone overseas to lead to hollowing out of the industry, and the result has become a social problem.
Today, there are signs of this threat. For example, according to the IMV plan, Toyota is shifting its HILUX, a small pickup truck produced by its Hino Motor Co., to Thailand. Isuzu has already transferred its pickup truck production base to Thailand. Toyota's deputy general manager in charge of Asian affairs, Akio Toyoda, explained: “The basic philosophy of Toyota is to produce cars in well-selling areas. Not only has the demand in the ASEAN region grown, but the demand in the Middle East, Africa and South America has also grown, so we have expanded Overseas production."
ASEAN’s auto exports exceeded imports. In China, in addition to Japanese auto makers such as Toyota, Nissan, and Honda, world-class automakers such as GM and Volkswagen have also expanded production. Most people think that China’s car demand will peak in 2008 when the Beijing Olympics will be held. Since then, there will be a surplus of production, and cars will be exported to all parts of the world. In fact, Chinese-made cars have begun to export.
Huge car industry is everywhere in the world. As a production base, Japan will become a small part of the "world map" of automobile production.