Unverified claims state that Isuzu Motors, a Japanese manufacturer, intends to move its production facilities from Thailand to Indonesia due to declining sales.
The stock price of Aapico Hitech Pcl (AH) fell sharply by more than 20% as a result of the reports.
For the top car assemblers in Thailand, AH designs, fabricates, and installs car assembly jigs and stamping dies as well as produces OEM automotive parts such fuel tanks, cross members, pillars, and floor pieces. Among the firm’s clients is Isuzu. At 11 a.m. on Thursday, the price of AH’s shares had dropped by more than 20%, reaching 32 baht per share. The stock’s morning low was 27.75 baht, with more over 1.2 billion baht in total trading value.
The market’s mood altered in the wake of worldwide news reports that Isuzu Motors was prepared to move its production base from Thailand to Indonesia, with plans to start the transfer process early next year by focusing on a lucrative market.
On the other hand, neither Tri-Petch Isuzu Sales Co Ltd. nor the Isuzu officials in Thailand have corroborated these reports.
Isuzu currently operates two car production facilities in Thailand, one each in the provinces of Samut Prakan and Chachoengsao. These facilities have a combined annual production capacity of 385,000 vehicles and employ about 6,000 people.
Isuzu Thailand recorded total sales of approximately 222.107 billion baht in 2022, an increase of 85.12%, and a profit of 17.182 billion baht. Tri Petch Isuzu Sales Co Ltd, meanwhile, reported a post-tax profit of 20.425 billion baht, an increase of 29.55%.
Sales of cars overall fell 6.1% year over year in the first quarter of 2023, nevertheless. The second-largest brand in Thailand after Toyota, Isuzu saw a decline in sales of 21.4%, to 17,133 units, accounting for 21.4% of the market.
Indonesia’s Minister of Industry met with Isuzu executives on Wednesday in Tokyo and expressed appreciation for their choice. For the migration of this manufacturing base, Indonesia plans to offer incentives and support.
Isuzu Motors, a significant Japanese automaker, intends to move its automobile manufacturing from one of its factories in Thailand to Indonesia, according to Agus Gumiwang Kartasasmita, Indonesia’s current Minister of Industry. Prior to the end of the current year, the company hopes to begin production.
In Indonesia’s Karawang, Isuzu already has one production facility. “We admire Isuzu’s decision,” Kartasasmita continued, “and after speaking with Isuzu’s management in Tokyo, we will offer incentives and support for the relocation process.”
Several Japanese automobile manufacturers, including Honda, Mitsubishi, Suzuki, and Subaru, now have production facilities in Indonesia.
Furthermore, Indonesia has set goals to become a hub for the production of batteries for electric vehicles by utilizing its rich resources, particularly nickel, a vital component of lithium-ion batteries.
15% of Isuzu’s worldwide production, or 44,694 vehicles, were produced in the Indonesian facility in Karawang in 2022.
Around 8,245 completely built-up (CBU) vehicles, which are autos made abroad and imported as fully constructed units, were shipped by Isuzu in the same year.
They expect exports to 25 nations to increase in 2023 compared to the previous year.
Isuzu has asked the Indonesian government for help in streamlining the export procedure, according to Yasuyuki Niijima, a senior official from Isuzu Motor.
Meanwhile, the Indonesian Minister of Industry hopes that Isuzu will use more domestic parts in the car-assembly process.
By increasing the percentage of domestically made parts used in autos, this project hopes to increase the use of domestically produced automobiles.
