“This year, JTEKT (Thailand) Co Ltd is preparing to become the management hub of eight companies within [the] Asean region under the name ‘Asean JTEKT Group’, which will be merged as one in order to deliver products and services that are No 1 and [the] only one to customers,” said Yoshikazu Konishi, president of JTEKT (Thailand).
The company is applying to the Board of Investment for regional-headquarters privileges and expects the process to be finalised by next March.
In his company’s first press conference in 50 years since starting its operations in the Kingdom, Konishi said JTEKT still viewed Thailand as an attractive place, and it had just established its second manufacturing site in the country last year, in Chachoengsao.
“The company expects [the] Thai automotive market to continue to slow down next year but is still confident it will pick up in 2018. Our Gateway factory still has vacant land enough to support future expansion,” he said.
JTEKT (Thailand) will become the headquarters for the group’s operations in Asean, which also include two other subsidiaries in Thailand, another two in Indonesia, and one each in the Philippines, Malaysia and Singapore.
Konishi said JTEKT was studying the possibility of setting up new production lines for steering systems in Malaysia and Indonesia next year as well as enhancing its sales and after-market functions for its bearing products in Thailand and Singapore.
JTEKT targets increasing its annual sales in Asean from about 120 billion yen (Bt41 billion) at present to 140 billion yen by 2020, and in Thailand from 35 billion yen to 42 billion yen during the same period.
It expects its Thailand sales to drop by 1.7 per cent this year. Its Thai operations currently export about 20-30 per cent of their capacity, especially steering products, which are mainly shipped to Indonesia and Malaysia.
Asean sales currently contribute about 8 per cent of the group’s total.
JTEKT, which invented electric power steering (EPS) three decades ago, has more than 130 companies in 28 countries employing more than 43,000 people. It is an affiliated company of Toyota, which has a 22.5-per-cent stake in JTEKT.
For bearing products, of which hub bearings are the main product, Konishi said the parent company in Japan was in the process of developing a better product that would be manufactured and distributed in Asean to achieve its goal of increasing market share of this product in the region from 29 per cent to 40 per cent.
JTEKT recently dispatched personnel from its technical centre to provide design knowledge to the Thai-Japan Institute of Technology and is considering establishing a long-term partnership with the institute, he said.
The group’s current annual production capacity in Thailand includes 850,000 EPS sets, 1.2 million units of hydraulic power steering, and more than 2 million hub-bearing units. It also produces driveline components.