The International Companies abandoning Thailand Thread.

[cyrille]

Mazda opens new plant in Chon Buri - The Nation

There ya go.

Some actual news rather than just bar room barfing of the 'whether this information is true or not' I'll be self importantly waffling about it for a while' variety,

[chassamui]

I understand why you want to avoid the question. I believe the points raised in the OP are just the tip of an iceberg threatening the whole economy. Followed to the logical conclusion it results in a disatisfied population, burdened with debt and leaking jobs.
The danger to farang is very real. Ignore it if you wish. It gives me no pleasure whatsoever to form this opinion, as I would prefer to live here in peace.
You are relying on traditional Thai resilience to natural disasters and political upheaval. This situation is now beyond their control and I cannot see any good coming of it in the short to medium term. My opinion just follows the logic of multi national corporations deserting massive investments in training and production, in favour of cheaper and more malleable economies elswhere in Asean.
An ill equiped dictatorship is not the ideal way out of these problems.

[cyrille]

I'm not avoiding anything except rumours which aren't worth countering. Everyday since I first came to Thailand in 1989 people have been predicting doom.

I note you also present no evidence whatsoever of this impending walking dead scenario. You post about 'real dangers' but present nothing other than bluster and imaginings.

[cyrille]

Btw - multinational companies don't make massive investments in infrastructure in a country that has never been democratic or efficiently governed and then split because..err..it's not democratic or efficiently governed.

[Nokturnal]

^ you're failing to recognize how big a problem with the coup and current governments is. The west is turning away from Thailand as the rhetoric continues. Meanwhile Thailand is blazing it's own destructive trail and embracing China. British recently came to visit 4 ASEAN nations, Thailand excluded. The writing is on the wall if you care to see it.

[chassamui]

Mazda opens new plant in Chon Buri - The Nation

There ya go.

Some actual news rather than just bar room barfing of the 'whether this information is true or not' I'll be self importantly waffling about it for a while' variety,

In order for them to be successful it would mean increasing motor sales, bearing in mind this was conceived more than 2 years ago when sales were much higher.

New vehicle purchases have fallen 23%

Mazda is no way equivalent to a 60% reduction in Toyota production.
Toyota is the top automotive company in the world. Their withdrawal will cause huge loss of face in Thailand.

Please continue with your exaggeration of what I actually said and your casual dismissal of a valid opinion.

[taxexile]

Whether this information is true or not, and I received it from a very reliable OEM Ex-pat source Thailand will lose 1000's of jobs in-house and more from the other local part supplier contractors

Thais thrive on rumour and hearsay, and maybe your information is a result of this article from Bloomberg which mentions an invitation to Toyota and others to relocate to the Philippines.

A downturn in Thais purchasing power will not affect Toyota, they will just export more of their production.

Thailand's Generals Don't Have an Economic Plan

91 AUG 4, 2015 6:00 PM EDT

By William Pesek

Militaries tend to justify coups d'etat by making assurances of political competence: The previous government failed the people, and military technocrats will now restore order, cleanse the system and get big things done.

The generals who seized power in Thailand in May 2014, however, have essentially abdicated that argument. To be sure, Prayuth Chan-Ocha and his fellow officers pledged to restore political calm, end corruption and bring happiness to tens of millions not benefiting from $373 billion of annual output. But 440 days on, Prayuth's regime has only made things worse.

Thailand's growth is the slowest among developing nations, its exports may contract 4 percent this year and Bangkok is the only major Asian stock market experiencing outflows. The currency is down 7 percent in six months. Thailand's new regime has learned the hard way that running Southeast Asia's second-biggest economy isn't as easy its officials once thought.

Prayuth's main problem is that he lacks an economic strategy. He and his team are so preoccupied micro-managing small-scale public order issues (like banning alcohol sales near schools) that they're neglecting the big picture.

Thailand, long a manufacturing powerhouse, needs a serious fiscal jolt. Factory output has fallen every month but one since March 2013, while exports have declined every month this year. The only thing the junta is doing about it is offering spin.

In a series of speeches, military leader-turned-Prime Minister Prayuth has claimed the country's declining gross domestic product is the product of his valiant corruption crackdown (and partly weak exports, too). "It’s because some people spend money from illegal businesses and money from fraud," he said June 5. "Now the government has come to set things right, causing that money to disappear."

But average Thais trying to eke out a living tell another story. As documented by my Bloomberg colleague Chris Blake on July 1, bribes demanded by public officials and the mafia are increasing under the junta, particularly in Bangkok’s red-light districts. “Thailand’s shadow economy ranks globally among the highest,” says economist Friedrich Schneider, author of "Hiding in the Shadows: The Growth of the Underground Economy." He estimates Thailand’s shadow economy was 40.9 percent of real GDP in 2014, including some illegal sectors such as gambling and small weapons, but largely excluding drugs.

Prayuth would be wise to reshuffle his cabinet, half of which is comprised of military personnel with little experience in their portfolios. That would relieve some of the social pressure bubbling around his regime. The country's already elevated levels of household debt are rising as growth and wages stagnate. In the first quarter alone, outstanding household debt from commercial banks alone jumped 7.2 percent.

But Prayuth all but admitted on July 27 that he doesn't understand the basics of modern political leadership when he said he won’t be pressured to make changes "just because somebody is at fault or because of social pressure." Speculation had been rife that Prayuth might tap Somkid Jatusripitak, who was deputy prime minister and finance minister in the government of former premier Thaksin Shinawatra. But it's hard to see how he could do that given that the coup was aimed at running Thaksin and his sister, former Prime Minister Yingluck Shinawatra, out of politics forever.

Prayuth's first step should be to accelerate the government's $54 billion spending plans for roads, mass transit and other projects. Absent those improvements in infrastructure, Thailand won't be able to keep foreign automobile manufacturers in the country, and thus retain its reputation as the "Detroit of Asia." And with the Philippines already lobbying Toyota and other auto giants to relocate their Thai factories, Prayuth doesn't have any time to lose.

Prayuth also must set a clear timetable for relinquishing power. That's a necessary first step to restoring confidence in the economy; investors tend to look askance at permanent military takeovers. Yet the junta hasn't even finalized a new constitution it says is required to allow Thais to cast ballots again. It is increasingly apparent that its talk of reform before elections is just a delaying tactic. The public would be forgiven for concluding the coup wasn't about improving the lives of average Thais but grabbing power for power's sake.

When you seize power, though, it's best to have a plan. The chronic drift and uncertainty of the last 14 months is breeding a lack of trust from the trading floors of New York to the night markets of Bangkok. It's undermining growth, deepening poverty and increasing the odds Thailand will experience a lost decade. And as the government's economic argument loses force, the only authority it will have left is its force of arms.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author on this story:
William Pesek at wpesek@bloomberg.net

To contact the editor on this story:
Cameron Abadi at cabadi2@bloomberg.net

Thailand's Generals Don't Have an Economic Plan - Bloomberg View

[cyrille]

You do realise the op is based on something somebody heard somewhere and the news story I linked to is actual...umm...news, right?

Thanks for the info about Toyota though. I'd never heard of them.

[cyrille]

British recently came to visit 4 ASEAN nations, Thailand excluded. The writing is on the wall if you care to see it.

Oh for goodness sake.

[thefactoryoutlet]

Great ! Maybe Thai will start to learn that when you have a job you should care and be good to try to keep it !

[Seekingasylum]

The Thai have no car industry of their own but by taxing imports, necessary to satisfy domestic demand, at high rates they successfully induced manufacturers to set up assembly plants which attracted a lower tariff thus greatly increasing the home market. Vehicles assembled here were also supplied to the EU markets viz Mitsubishi Warriors.
Now, the AEC is up and running imminently and a rationalisation of tariffs will be agreed and in effect goods manufactured anywhere within the community should be able to be sold within any member state without penalty.

I suspect some re- location of manufacturing will be necessary to balance out the supply intra - region otherwise some countries will get mightily pissed off and threaten to scupper the AEC.

There is also the question of labour availability which is proving troublesome for some manufacturers in recruiting and retaining staff of the required calibre. Honda etc have been banging on about this for some time. Low labour costs offset this problem for quite a while but as wages rise then the compromise becomes less appealing. Samsung I believe cited labour quality as a reason for shifting to Viet Nam but I suspect local political pressure had more to do with it.

Still, given the size of the market potential within the region there is more than enough capacity to go round but up-skilling and raising education standards will be crucial to attracting manufacturers.

Laying blame at the door of the junta is a bit silly really since no matter which cabal is in power no one really develops a strategic plan which can actually be implemented with any degree of certainty. Still, when one looks at the volte faces over the prohibition on the sale of alcohol near schools fiasco one begins to question that assumption....

[FlyFree]

Some actual news rather than just bar room barfing of the 'whether this information is true or not' I'll be self importantly waffling about it for a while' variety,

Hilarious how self-proclaimed farang 'businessmen' in Thailand run around self-importantly trumpeting bar rumour instead of actually acting like businessmen innit.

Another 'look at me' thread sans substance.

[chassamui]

The writing is on the wall if you care to see it.

He is in rose tinted denial, based on historical resilience.

A downturn in Thais purchasing power will not affect Toyota, they will just export more of their production.

Not to Europe. They are still producing vehicles to meet NCAP IV emissions standards. NCAP V is a target for 2019 for Thai automotive manufacture.

Oh for goodness sake.

There's that rose tinted denial again.

Vehicles assembled here were also supplied to the EU markets viz Mitsubishi Warriors.

Do you have a link for that Gent? I'm surprise such a minor Jap manufacturer would use Thailand to export to EU standards when Toyota can't be arsed.

[chassamui]

Thatt Bloomberg piece is a useful indicator, even though it makes a few OTT assumptions and it is after all just an informed opinion piece. A bit like mine really.

[taxexile]

I believe European versions of Suzuki cars are produced in Hungary, not Thailand.

[CaptainNemo]

British recently came to visit 4 ASEAN nations, Thailand excluded. The writing is on the wall if you care to see it.

Oh for goodness sake.

Whilst I think Cyrille makes a very sound point about paranoia and blather, it is worth observing that Thailand does have current and potential local competition, and competition is a good thing.

As Cyrille also says, we can't know the future, but we can observe risks: potential hazards and probabilities. We know that the people at the top of the country will probably not be around in 10 years' time, and we know that there is a recent history of unrest in the country that is probably a result of economics, lack of rule of law/corruption, and lack of welfare state/fully functioning tax system.
These countries are experiencing their own equivalent of the industrial revolution (a bit different, as the products of the original indrev were just dropped on top of their feudal society, with all sorts of disruptive effects).

The head of any organisation has a trickle-down influence on the whole organisation - and the country is the organisation in this case. The leaderships of all these countries matter in terms of business confidence.
When you've got a general acting as foreign minister and coming out with embarrassing rubbish in public with another foreign minister; and a general as prime minister coming out with embarrassing comments about a criminal investigation connected to the tourism industry, business confidence is seriously damaged, because it's clear that the leadership are chickenheads. Who are the leaders in the manufacturing developing world that you can take seriously and enjoy the stability and consistency to do business with over the long term? Vietnam seems to be making progress in this respect, and there's all to play for for other countries in the area, once they get their infrastructure and other aspects of reliability sorted out, like corruption.
China and Thailand are having a wobble, and that's clear; China has it's limitless supply of labour; and Thailand always has it's hospitality sector to fall back on, and as long as it can deliver the goods in terms of reliable cheap manufacturing, it'll keep bobbing along, but it is facing a more challenging future, with more rivals rising up, and it's own internal issues to resolve.
In 10 years you might have Rangoon and Saigon and Manila supplanting Bangkok as cheap manufacturing centres, just because the doom hasn't happened in the past, it doesn't mean it won't happen in the coming future.

[Chittychangchang]

King Power and Singha beer have plenty of Baht to throw around overseas promoting "amazing Thailand"!
Anyone see the Leicester City match?

[chassamui]

In 10 years you might have Rangoon and Saigon and Manila supplanting Bangkok as cheap manufacturing centres, just because the doom hasn't happened in the past, it doesn't mean it won't happen in the coming future.

A bit simplistic but yes, even Cy might be able to get to grips with that.
Thailand has China as its biggest trading partner. Small wonder they would like to buy submarines from another unstable economy.
These are highly complex issues and Thailand might yet be saved by a big chunk of QE thrown at infrastructure projects. The problem is this government is fiddling with minor national issues while the economy goes down the toilet. They lack the competency of even the most corrupt democracies.
In 1997 it was an Asian problem, now its a global issue and the people at the helm are not seaworthy.
A new cosntitution will take far too long and will still be riddled with flaws and open to fraud because it is driven by people with no understanding how government actually works.

[sabang]

The only people who would deny that Thailand is wholesale losing foreign investment to elsewhere in Asean are PADite's- and lets face it, they're in denial about everything. Large manufacturers such as Toyota are hedging their bets by building new plant in other, faster growing and more politically stable economies such as Indonesia & the Filipines. Toyota is shifting all of it's Fortuna production to the Fil's, and Samsung announced it is shifting it's TV production to Vietnam, and I believe is shifting out of semiconductor manufacturing here. I doubt that the likes of Toyota will be pulling out of Thailand entirely though LT- they have considerable plant on the ground here, plus local manufacturing capacity helps them stay competitive in the domestic market due to tariff protection (although this should diminish with Asean integration). More likely is that new investments will be directed elsewhere, eg Toyota shifting production of the Fortuna to the Filipines.

[thaimeme]

Whether this information is true or not, and I received it from a very reliable OEM Ex-pat source Thailand will lose 1000's of jobs in-house and more from the other local part supplier contractors

Thais thrive on rumour and hearsay, and maybe your information is a result of this article from Bloomberg which mentions an invitation to Toyota and others to relocate to the Philippines.

A downturn in Thais purchasing power will not affect Toyota, they will just export more of their production.

Thailand's Generals Don't Have an Economic Plan

91 AUG 4, 2015 6:00 PM EDT

By William Pesek

Militaries tend to justify coups d'etat by making assurances of political competence: The previous government failed the people, and military technocrats will now restore order, cleanse the system and get big things done.

The generals who seized power in Thailand in May 2014, however, have essentially abdicated that argument. To be sure, Prayuth Chan-Ocha and his fellow officers pledged to restore political calm, end corruption and bring happiness to tens of millions not benefiting from $373 billion of annual output. But 440 days on, Prayuth's regime has only made things worse.

Thailand's growth is the slowest among developing nations, its exports may contract 4 percent this year and Bangkok is the only major Asian stock market experiencing outflows. The currency is down 7 percent in six months. Thailand's new regime has learned the hard way that running Southeast Asia's second-biggest economy isn't as easy its officials once thought.

Prayuth's main problem is that he lacks an economic strategy. He and his team are so preoccupied micro-managing small-scale public order issues (like banning alcohol sales near schools) that they're neglecting the big picture.

Thailand, long a manufacturing powerhouse, needs a serious fiscal jolt. Factory output has fallen every month but one since March 2013, while exports have declined every month this year. The only thing the junta is doing about it is offering spin.

In a series of speeches, military leader-turned-Prime Minister Prayuth has claimed the country's declining gross domestic product is the product of his valiant corruption crackdown (and partly weak exports, too). "It’s because some people spend money from illegal businesses and money from fraud," he said June 5. "Now the government has come to set things right, causing that money to disappear."

But average Thais trying to eke out a living tell another story. As documented by my Bloomberg colleague Chris Blake on July 1, bribes demanded by public officials and the mafia are increasing under the junta, particularly in Bangkok’s red-light districts. “Thailand’s shadow economy ranks globally among the highest,” says economist Friedrich Schneider, author of "Hiding in the Shadows: The Growth of the Underground Economy." He estimates Thailand’s shadow economy was 40.9 percent of real GDP in 2014, including some illegal sectors such as gambling and small weapons, but largely excluding drugs.

Prayuth would be wise to reshuffle his cabinet, half of which is comprised of military personnel with little experience in their portfolios. That would relieve some of the social pressure bubbling around his regime. The country's already elevated levels of household debt are rising as growth and wages stagnate. In the first quarter alone, outstanding household debt from commercial banks alone jumped 7.2 percent.

But Prayuth all but admitted on July 27 that he doesn't understand the basics of modern political leadership when he said he won’t be pressured to make changes "just because somebody is at fault or because of social pressure." Speculation had been rife that Prayuth might tap Somkid Jatusripitak, who was deputy prime minister and finance minister in the government of former premier Thaksin Shinawatra. But it's hard to see how he could do that given that the coup was aimed at running Thaksin and his sister, former Prime Minister Yingluck Shinawatra, out of politics forever.

Prayuth's first step should be to accelerate the government's $54 billion spending plans for roads, mass transit and other projects. Absent those improvements in infrastructure, Thailand won't be able to keep foreign automobile manufacturers in the country, and thus retain its reputation as the "Detroit of Asia." And with the Philippines already lobbying Toyota and other auto giants to relocate their Thai factories, Prayuth doesn't have any time to lose.

Prayuth also must set a clear timetable for relinquishing power. That's a necessary first step to restoring confidence in the economy; investors tend to look askance at permanent military takeovers. Yet the junta hasn't even finalized a new constitution it says is required to allow Thais to cast ballots again. It is increasingly apparent that its talk of reform before elections is just a delaying tactic. The public would be forgiven for concluding the coup wasn't about improving the lives of average Thais but grabbing power for power's sake.

When you seize power, though, it's best to have a plan. The chronic drift and uncertainty of the last 14 months is breeding a lack of trust from the trading floors of New York to the night markets of Bangkok. It's undermining growth, deepening poverty and increasing the odds Thailand will experience a lost decade. And as the government's economic argument loses force, the only authority it will have left is its force of arms.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author on this story:
William Pesek at wpesek@bloomberg.net

To contact the editor on this story:
Cameron Abadi at cabadi2@bloomberg.net

Thailand's Generals Don't Have an Economic Plan - Bloomberg View

Revealing article for those who are not up to speed with the desperate reality of current affairs.

....as it appears many aren't.

[chassamui]

Revealing article for those who are not up to speed with the desperate reality of current affairs. ....as it appears many aren't.

Most unlike you Jeff, admitting your surrogate country might actually be a failure?

[Hans Mann]

Survey: Capacity at 55% in H1

The weak global economy has led to declining orders from overseas importers, forcing Thai industries to cut their production capacity and overtime payments to employees, reports the Employers' Confederation of Thai Trade and Industry (EconThai).

The drop in worker income has put more pressure on already weak domestic purchasing power, it said.

EconThai's survey showed overtime payments in the first half of this year dropped by 21.1% because of lower production capacity, which fell to 55%. Production capacity for small and medium-sized enterprises fell to 48% in the first half.

Tanit Sorat, EconThai's vice-president, said the weak global economy was continuing to hurt Thai business according to the survey of 11 business clusters, including electronics and automotive, which employ millions of Thais.

"There are no new orders from overseas markets and the domestic economy is still sleepy. Businesses have to cut their production capacity ...

Survey: Capacity at 55% in H1 | Bangkok Post: business

[BobR]

Originally Posted by Seekingasylum
Vehicles assembled here were also supplied to the EU markets viz Mitsubishi Warriors.
Do you have a link for that Gent? I'm surprise such a minor Jap manufacturer would use Thailand to export to EU standards when Toyota can't be arsed.

Mitsubishi is already exporting that crappy little Mirage to the USA, has been for about 3 years.
First U.S.-bound vehicle exports highlight Thailand's growth ...
http://www.autonews.com/.../first-u....ehicle-exports...
Automotive News
Oct 14, 2013 - The Thailand-made Mirage is a revived nameplate that succeeds the Mitsubishi Colt small car, previously made in Japan. Mitsubishi decided to ...

[cyrille]

Please, please, no stuff about the weakening global economy, particularly the struggles of China. It's all far too sensible and backed up by people who apparently follow the news rather than just spout off.

This thread is about what LT overheard the other day and how Chas reckons farang en masse will be targeted for crime in Thailand - something which has never previously happened in the history of he Kingdom.

Please start a new thread if you have something sensible to say.

[Pragmatic]

If you hate the place so much, or feel as a farang you have no say you should go somehere else!

In all my postings on TD you will not find one where I claim to hate Thailand. My remark was to do with the exchange rate which should benefit us farang if the Thai economy falters.