Tags: Thailand | car | factory | VW

VW Said to Consider Setting Up Its First Car Factory in Thailand

Tuesday, 01 Apr 2014 01:03 PM

Volkswagen AG, Europe’s largest automaker, has applied to set up its first car plant in Thailand to help narrow the gap with Toyota Motor Corp. in southeast Asia, people familiar with the matter said.

The Wolfsburg, Germany-based manufacturer is seeking to participate in a government program offering tax exemptions for automakers investing at least 6.5 billion Thai baht ($200 million) in local manufacturing, said the people, who asked not to be identified because a final decision has not been made.

Annual production must reach at least 100,000 cars in the fourth year after starting operations, and manufacturing must begin by 2019, in order to receive the incentives. The program from Thailand’s Ministry of Industry includes vehicle assembly, components and engine production. Carmakers had until yesterday to apply, according to a ministry statement from last October.

VW sees a “strong market opportunity” in southeast Asia, Chief Financial Officer Hans Dieter Poetsch said in a presentation published on the company’s website last week.

The carmaker anticipates average annual market growth of 4.5 percent through 2018 in the region comprising Indonesia, Thailand, Malaysia, Philippines and some smaller countries in the area. VW started assembling Passat sedans in Malaysia with local automaker DRB-Hicom Bhd. in 2012.

Volkswagen hasn’t made a final decision yet on producing vehicles in Thailand as the exact terms and conditions may still change, the people said. VW declined to comment on any plans it has for the country.

Chief Executive Officer Martin Winterkorn said last month that the automaker may sell more than 10 million vehicles worldwide in 2014, four years earlier than initially planned, as VW seeks to overtake Toyota as the industry leader by 2018.

VW delivered 9.73 million vehicles in 2013 as a boost in Chinese demand helped it surpass General Motors Co. to become the world’s second-biggest carmaker. VW, which also owns the Audi and Porsche premium marques and Seat and Skoda mass-market nameplates, will introduce more than 100 models through 2015. VW outlined plans in November to invest 84.2 billion euros through 2018 to build new models and expand production.

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Volkswagen AG, Europe's largest automaker, has applied to set up its first car plant in Thailand to help narrow the gap with Toyota Motor Corp. in southeast Asia, people familiar with the matter said.
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2014-03-01
Tuesday, 01 Apr 2014 01:03 PM
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