SAIC Maxus sets up shop in Thailand

SAIC Motor and Thailand’s CP Group signed an agreement, on Jan 23, to set up the Maxus Motor (Thailand) Co, marking a significant breakthrough in SAIC Motor’s global strategy and allowing Maxus, a key part of SAIC’s vehicle sector, to enter the Thai market, an important one in Southeast Asia.

Taking part in the signing ceremony were Thai officials, SAIC Motor officials, and the SAIC Commercial Vehicle Co.

This joint venture marks the start of Maxus’s vehicle exports to Thailand, with Maxus Motor (Thailand) being the general distributor. The day of the signing, the first vehicles, about 100 Maxus models, were to be delivered, including Maxus V80 Minibuses, mainly for use as commuter vehicles for government departments and media organizations, and school buses. There will also be rental services provided by the joint venture. The vehicles will arrive in Thailand in early March and make their debut at the Thailand Motor Expo.

Thailand is a major member of ASEAN and is an important automobile market in Southeast Asia, where Thailand, Malaysia and Singapore account for around 87 percent of the automobile market, with a share in the commercial vehicle sector as high as 93 percent. The China-ASEAN free trade agreement says that, if an assembly plant is set up in any ASEAN nation with a localization level of a certain percentage, its products are eligible for preferential tariff treatment in the ASEAN community and can be exported to any ASEAN member. And, when the China-ASEAN Economic Community takes shape in 2015, it will mean unprecedented opportunities for Chinese vehicles in SE Asia.

The ASEAN nations have a population of nearly 600 million and an aggregate GDP of more than $2.33 trillion, so they are simply too big a market to ignore. Some forecasts put automobile sales in the ASEAN market above 3.3 million units by 2020. And when such factors as taxation, labor, and geographical location are taken into consideration, Thailand is a prime site for international automakers to enter the market.

Maxus Motor (Thailand) is a landmark event for Chinese automakers in their expansionist moves to the Southeast and Maxus is expanding thanks to its competitive edge and the backing of SAIC, a Global 500 company. It has exported vehicles to 22 countries, including Malaysia and Singapore, and now in Thailand, another great stride in SAIC Motor’s global strategy.