Japanese automakers are veering around to the idea of using Thailand as a global hub for their compact cars in the Asia-Pacific region and parts of Europe. In contrast, India’s domestic market will be top priority though exports could be conceived later.
Importing fully built up cars back to Japan from Thailand is also emerging a strong possibility. The Thai eco car plan is a key growth driver of this strategy where the likes of Nissan, Honda, Toyota, Suzuki and Mitsubishi have planned similar models for India. For instance, the Nissan March is the Micra for India while Honda’s compact car will debut in both countries by end-2011.
Where Thailand outscores India as an attractive location is the fact that it is part of the ASEAN Free Trade Area, which eliminates tariff barriers between 10 countries in the region. Japanese car makers have constantly maintained that similar trade pacts would help Indian ancillary suppliers become part of their global sourcing plans.