Thailand says Sawasdee to Subaru

It was an impressive display of Japanese technological prowess and Thai expertise, befitting a luxury automotive brand as Subaru.

The Tan Chong Subaru Automotive (Thailand) Ltd. (TCSAT), which will produce the fifth generation Subaru Forester for key markets in the Asean region, showcased high performance robotics at several stages of the assembly process to ensure that the production standards and processes here would meet the same stringent levels as Japan.

And this is highly crucial, considering that the TCSAT is the first Subaru plant in Asia outside Japan. This only meant that the stakes are indeed high for this new production facility, which is a joint venture between Hong Kong-listed Tan Chong International Ltd. (TCIL) and Japan’s Subaru Corp.

“Thanks to the technology and skills transfer from Japan, we now know how to ship parts, put together a CKD (completely knocked down) kit, assemble quality cars, and use highly automated processes, including world class paint facility, to build quality Subarus here. This plant will allow us to better manage our supply chain and widen our product line up so we can respond faster and better to what our customers from different markets want,” TCIL deputy chairman and managing director Glenn Tan said during the unveiling ceremony.

“Our first cars from here, the fifth generation Subaru Forester, had been a runaway success. Customers were so impressed by the quality of our made-in-Thailand cars that they initially didn’t believe that it was (produced) here. We had a record of 200 bookings for the car at the recent Bangkok International Motorshow. This is not surprising given what we have done to make sure that the cars are of high quality and (will) meet Japanese production standards,” Tan added.

Growing demand

Philippine media was fortunate to witness the unveiling of the 5-billion Baht TCSAT in Bangkok late last month, replete with a full tour of the whole facility, which features robust quality control procedures to ensure that every car produced at the TCSAT is safe, comfortable and reliable.

According to officials, the TCSAT can produce 6,000

Subaru Foresters in its first year of operations, meant to meet a robust and growing demand for this SUV within Southeast Asia. Eventually, the facility—which occupies more than 100,000 sqm of space within the Ladkrabang Industrial Estate—can produce as many as four models at a capacity of 100,000 units annually.

Tomohiro Ishitobi, senior general manager of Subaru Corp., said on the sidelines of the launch, that expanding the presence of Subaru in the region was not the primary reason for adding a new facility as TCSAT.

This was more of a strategic move on the part of Subaru.

Ishitobi explained that they needed the facility in order to “sell the new Forester locally here in Thailand,” and better cater to markets like Cambodia and Vietnam, which reportedly have high import duties.

“So local production is a must. Tan Chong used to have a factory here (in Bangkok)… that they want to utilize, and that was the beginning of the discussions. Considering the longevity of the project, Tan Chong thought (Bangkok) is the perfect location.

Given the (ease of) local procurement and (availability) of parts, Thailand is the best market as it has lots of good suppliers,” Ishitobi further said.

Thailand’s status as an automotive hub, with many Japanese automakers, established suppliers of components and strong localization ability, meant the plant could be started up quickly and at a reasonable cost. In addition, trade agreements in ASEAN, further allow the cars to be competitively built and exported to meet growing demand.

The TCSAT-produced vehicles will be distributed in Thailand, Malaysia, Vietnam and Cambodia by the Motor Image Group, a wholly-owned subsidiary of TCIL. The Philippines will continue to be served by Subaru Japan.