Friday, May 25, 2012

AFG Meeting Report

Check out Doc Iain's comprehensive report on the May 2012 AFG Meeting. Thanks again to our speaker Peter Wolf, our members, sponsors and partners for making this an interesting session on BMW Thailand and the EABC European Asean Business Centre.

The report was published yesterday in Pattaya Mail the report is as follows:


The Automotive Focus Group (AFG) packed the meeting room at the Pattaya Marriott Resort and Spa to listen to Peter Wolf, the MD of BMW Manufacturing Thailand at the Rayong plant.

Peter Wolf has been the MD at BMW Manufacturing Thailand since July 2010 and has been part of the overall growth of the company in Thailand which has maintained growth rates between 26-28 percent over the past three years, with their 220 employees producing 5,000 vehicles annually from CKD.  To service this output, which is mainly for domestic markets BMW now has 18 service centers, plus four dedicated to MINI.  There is, however, some limited export of the 7-Series to Indonesia and the 5-Series to Malaysia.

Peter Wolf, MD BMW Manufacturing Thailand.

Initially, the manufacturing plant had one assembly line which was expanded from the 3-Series to include the 7-Series, but this was expanded to incorporate a second assembly line because of the differences in the 5-Series.  At present the plant handles 25 variants, 10 engines, 21 exterior colors and 22 interior colors.

BMW keep their local content between 43-51 percent, but sourcing locally is not as easy as it should be, according to Peter Wolf.  Local homologation just takes too long, as Thai bureaucracy can be slow and cumbersome.  There are also price differentials not in the favor of local sourcing.

After the address covering BMW, Peter Wolf introduced the EABC to the AFG Members.  This is the European-ASEAN Business Center and the EABC has as its associates, most of the major Chambers of Commerce.  It is a European Trade Organization located in Bangkok which aims to contribute to the improvement of the trade and investment climate for European companies in Thailand.  BMW, of course, is represented there.

Following the presentation was a lively Q&A session with the AFG’s founding president George Strampp first to grasp the thorny nettle of the ‘grey market’.  Peter Wolf admitted that there were problems with different rules and regulations between locally produced and externally sourced vehicles.  However, he did say that BMW does service ‘grey market’ vehicles as after all, they are BMW’s and all BMW’s, no matter where manufactured have to meet BMW’s high standards.

John Lindsay, FUTURIS and Leigh Wilmott, Austrade
Leight Wilmott from Austrade asked whether there was a need to change set-ups between Germany and Thailand, to which Peter Wolf said “No changes, including run-flat tyres.”

He was asked if we were going to see new manufacturers setting up in Thailand, such as VW-Audi, but he did not believe so.  He also did not feel that Thailand’s local suppliers were in a position to supply other manufacturing countries, but did express a cautionary note that unless Thailand brings down the bureaucratic red tape barriers, then Thailand could be left behind by neighboring countries which could be looking for a slice of the ASEAN automotive industry pie.

Hardy souls then moved on to the AmCham, AustCham, BCCT combined chambers of commerce networking also held in the Marriott’s meeting room.