Toyota to step up Thai engine output as Asia demand grows

Source：February 29, 2012 | Nikkei Engli Release Date：2012-03-02 801

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* Toyota will spend Y14 billion to increase engine production capacity in Thailand * Siam Toyota Manufacturing will add capacity by 100,000 to 840,000 engines a year in early 2014 * The capacity increase will create 200 new jobs * The engines will be supplied in Thailand and exported to Vietnam and Taiwan

By Yoshio Takahashi of DOW JONES NEWSWIRES

TOKYO (Dow Jones)--Toyota Motor Corp. (7203.TO) will ramp up engine production capacity in Thailand, as the car maker speeds up shifting its focus toward burgeoning demand in Asia and other emerging markets.

Japan's biggest car maker by volume said Wednesday that it will raise the annual capacity to make engines at its Siam Toyota Manufacturing Co. subsidiary by 100,000 engines or 14% to 840,000 at a cost of Y14 billion, creating 200 new jobs. The subsidiary had 3,000 employees at of the end of January.

The decision comes on the heels of plans unveiled last month to construct a new vehicle assembly factory in Thailand and to resume a production line at another local plant that had been suspended to catch up with increasing demand in Asia.

Building up production capacity outside Japan is a vital tactic for Japanese car makers to ease the pain of the yen's strength which dents the international competitiveness of Japan-built vehicles. They also continue to seek to build cars where demand is in order to cut costs and to quickly respond to changes in sales trends.

Even after floods in Thailand disrupted production at many Japanese car makers last year, Toyota like many of its Japanese rivals sees the southeast Asian country as a global hub where many competitive suppliers are operating. The government also attracts manufacturers with tax incentives to producers of small fuel-efficient vehicles.

Siam Toyota Manufacturing will increase its production capacity for the "ZR" engines for the Corolla series models in early 2014, supplying the engines to the Thai market and also exporting them to Vietnam and Taiwan.

Toyota announced its latest expansion plans as the outlook for Thailand looks bright.

Toyota Motor Thailand Co., another Toyota local subsidiary, has said that it expects industrywide sales in the country to surge 38.5% to 1.1 million vehicles in 2012, supported by solid domestic demand and supportive government policies. Sales fell 0.8% to 794,081 vehicles last year on the earthquake and tsunami that hit Japan last March and the Thai flooding.

Toyota aims to boost its Thailand sales 55.1% to 450,000 vehicles in 2012, reversing a fall of 11% to 290,061 last year, as it looks to grab a 40.9% share ofSaldos - Entrega gratuita