NSK Ltd. (Japan) has won a major new contract with Toyota Motor Corp. (Japan), to supply virtually all of the transmission, cooling system and driveline bearings for the new high-volume Hilux line of pickup trucks being produced in Thailand.
Toyota is shifting all Japanese production of pickup trucks, now handled by its Hino subsidiary, to an expanded plant in Samrut Prakan, Thailand. Toyota produced 122,000 Hilux pickups at one Hino plant in Tokyo alone. Pickup truck production was relocated to Thailand in late 2002.
Toyota has budgeted investing more than USD $720 million at Samrut Prakan to implement its global sourcing project and increase Hilux truck capacity from 90,000 units to over 200,000 units per year. In addition, the company is spending more than $65 million on a new Research and Development facility in Bangkok.
Winning the Hilux contract means NSK must now invest heavily at to meet the dramatic increase in demand. NSK Bearings Manufacturing (Thailand) Co. Ltd.'s bearing plant in Chonburi is undergoing a major expansion project, projected to cost at least $9.3 million. The expansion will more than triple the plant's bearing production capacity, to over 11 million sets per year, by mid-2004.
Toyota has been involved in Thailand since 1957, when it became the company's first foreign investment location. Toyota cars were built there in 1964, from complete kits. Today, Toyota Motor Thailand Ltd. holds a 35% market share in the country, celebrating 25 years as its top-selling auto and truck brand. While the overall vehicle market in Thailand grew 37% last year, to over 400,000 units, Toyota had a 56% Thai sales increase, to over 130,000 vehicles. In 2003, Toyota expects Thai sales to grow another 19%, to over 155,000 units.
After internal Thai demand, the country is the largest ASEAN vehicle exporter. Toyota's primary export markets for the new Hilux pickup trucks will be Japan, the Philippines, Malaysia and Taiwan.
The Thai government has many incentive programs in place, encouraging auto manufacturers to position the country as a global production center for motorcycles and trucks. The government offers economic incentives for ASEAN free-trade country exporters, to encourage R&D spending, and foster the development of Tier 2 and Tier 3 automotive suppliers.
The programs are working, leveraged by the fast-growing demand in Thailand itself. In addition to NSK, there are now more than 380 Tier 1 auto industry suppliers in the country, and over 800 Tier 2 and Tier 3 vendors.
Recently, additional investment incentives became available for Thailand's more desirable Zone 1 and Zone 2 areas around greater Bangkok -- areas which include Toyota's and NSK's plants.
Toyota Motor Thailand's President, Ryoichi Sasaki, said Toyota Thailand currently produces the Hilux truck, Vios passenger cars, Hilux pickup truck engines, Camry parts and bodies for export to other Toyota facilities in the region. The Thai facility imports transmissions from the Philippines and gas engines from Indonesia. In 2003, for example, over 240,000 Toyota diesel engines will be produced in Thailand, 130,000 of them for export to its other factories.
In the region, Toyota has factories in Thailand, Indonesia, Malaysia, the Philippines, Vietnam, Taiwan and China, employing over 26,000 people.
The new Toyota Innovative International Multipurpose Vehicle (IMV) project, along with strong incentives offered by the Thai government to automakers, are driving the shift to Thailand. The IMV project links various vendors overseas as a global supply network. Mr. Sasaki said, "We will create a regional network of suppliers to complement our existing capacities in ASEAN and Toyota group resources."
Other News:
NSK Wins Major Toyota Truck Contract
SKF Reports Third Quarter 2003 Results
New SKF Reliability Maintenance Institute launched in Dubai
NN Acquires KLF Rolling Elements Business
China: Wanxiang Corporation Successfully Purchased Rockford Company(USA)
NSK Expects Euro Operations will Return to Profitability
RBC Will Acquire Timken's Standard Plant Airframe Bearing Business
China: The Cooperation with Foreigen Corporations Enables Wafangdian Bearing Group Corporation More Competitive
