A disaster crisis simulation exercise by staffs at Nissan's global headquarters in Yokohama, Japan.
Producing region, but also the 12th largest in the world. Then came the March 11 earthquake in Japan last year followed by the devastating floods that hit Thailand in October.
This was a double blow to Japanese brands who control nearly 90 per cent of the Thai market. So when the tsunami struck Japan, Thailand was badly hit in the ensuing events.
Just as Japan recovered and was starting to pickup the pieces, Thailand was hit by massive floods, knocking out several automotive parts manufacturers. Honda was the worst hit and its Ayutthaya plant was submerged in roof-level water.
When the final production figures were compiled, the damage wasn't as bad as expected, with output dropping by only 0.8 per cent to 794,081 units.
Within the industry, there was talk that auto companies were planning to move out of Thailand following the losses suffered by manufacturers.
Toyota was the first to assure the Thai government that it would not be scaling back on its investment in Thailand. President Akio Toyoda said,"We will stand by the community as we help Thais to overcome this obstacle."
He backed up the declaration by announcing a 19.8 billlion yen (RM736 million) investment in Thailand to expand Toyota's plant in Chachoengsao district and Toyota's subsidiary Thai Auto Works (TAW).
Two months later, Toyota's engine manufacturing subsidiary Siam Toyota Manufacturing announced an additional 14 billion yen (RM521 million) investment to expand its capacity in preparation for the next generation Corolla Altis due by 2014.
According to Toyota Motor Thailand (TMT) projections, the domestic Thai automotive market is expected to recover strongly, possibly even setting a record of over one million units in domestic sales. Toyota exports from Thailand is expected to increase by over 50 per cent from last year.
TMT president Kyoichi Tanada said,"It can be seen that there is still a very high demand (for automobiles) in Thailand and it is likely to increase in 2012.
“With constant marketing campaigns from various brands introducing this year’s models as well as supportive government policies, we foresee that the automobile sales in Thailand will reach 1.1 million units, a record high in Thai annual sales.”
The Thai Industry Ministry is confident that Thailand will be one of the top-10 car producing countries in the world.
Industry Minister M.R. Pongsvas Svasti said, "The automotive industry is our core industry, generating 360 billion baht (RM36.04 billion) of exports a year and employing 350,000 workers. It's clear that government policy will support Thailand in becoming the top producer in Asean and one of the top 10 in the world."
Thailand is ranked No.14. Before the flood disaster struck, Thailand was ranked No.12 in 2010.
Pongsvas Svasti added, "If there are no disruptions, we will see production of at least 3 million units a year from 2017."
Total production, for both the domestic market and for export, is expected to hit 2.1 million units this year.
This article first appeared in March-28's edition of CBT Quarterly Review.
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