Toyota officials, led by Asia Pacific president Susumu Matsuda, met with deputy Prime Minister Somkid Jatusripitak on September 4 and confirmed Thailand’s status as a key production hub of the automaker.

Somkid said Toyota had invested in hybrid vehicle production here, in order to create an economy of scale for the future.

“We have told Toyota to speed up the launch EVs in Thailand in line with the country’s goal of becoming a production and export hub for electric vehicles,” he said.

Toyota currently has four EV models that should go on sale in Thailand, rather than the conventional hybrids, he said.

“Toyota may want to maximise profits from previous investments before adjusting (its product lineup), but we have told them to make a swift decision because the new generation of Thai motorists prefers EVs to vehicles powered by combustion engines,” Somkid said.

Somkid did not mention a timeframe, but industry experts have expressed doubts that Toyota would speed up its plan for EVs in Thailand, or even go a step up with PHEVs (Plugin Hybrid Electric Vehicles). as was the case with several European luxury car makers.

“Toyota is a very big company and large delivery of each model is required,” said an industry source. “Small volume models have been taken off the market before. For Toyota to start offering PHEVs or EVs in Thailand, there must be a significant demand and this will take at least 5-10 years.”

Toyota EVs that will welcome visitors at the 2020 Tokyo Olympics.

Somkid also asked Toyota to consider developing the Thai workers’ skills, particularly in engineering and automotive technologies.

“We have collaborated with leading companies including Google and Huawei. Toyota’s participation in human resources development in Thailand will be rewarded with additional privileges from the Thai government. Also, it will further strengthen our bond with Japan,” he said, adding that Thailand could also serve as Toyota’s human resources centre for CLMV countries.

The Japanese automaker currently assembles hybrid vehicles in Thailand with the Camry and newly-launched Corolla coming in hybrid versions.

Toyota officials said hybrids have three major components – traction motor, battery management system and drive control unit. It wants the Thai government to look into battery-production costs as EVs require a large number of batteries.

The government is also interested in working with Toyota on smart farming. The Japanese automaker has already done much research and development in this field for the benefits of Thai farmers.

Additionally, KBank has sent staff to the affected areas to provide assistance to customers.

KBank president Predee Daochai said that as part of relief support for flood victims, business customers will be granted a debt moratorium of up to six months, and access to loans for business rehabilitation with no principal payment for up to six months and a loan term of no more than five years.

For home loan, credit card and express cash card clients, assistance measures will also include a debt moratorium of up to six months.

Customers with mortgage loans with KBank can access a new loan for home repairs, plus a six-month grace period for principal payment.

Auto loan clients will be offered a 50-per-cent reduction of instalment payment for up to six months, including the waiver of fees and late payment penalties.

Flood-affected customers can apply for assistance measures from now until October 31, 2019.

The region’s 5 per cent growth in assets under management for the latest year – off from an annualised 15 per cent clip for the prior six years – was still relatively strong for a year that saw AUM for the global industry finish 1 per cent lower, the report said.

According to the report, the Asia-Pacific region accounted for 77 per cent of the $1.88 trillion (Bt57.48 trillion) in global inflows for 2018. That marked an acceleration from the region’s 56 per cent share of global flows from 2013 to 2018.

Meanwhile, net profits for Asia’s asset management industry in 2018 grew 3 per cent, down sharply from an annualised pace of 14 per cent over the previous six years.

That subdued profit growth for the latest year could set the pace for the coming five years as global market uncertainties, such as the prospect of trade wars, and geopolitical volatility promise a more challenging environment for money managers, said Fumiaki Katsuki, a Tokyo-based partner with McKinsey.

Even so, with Asia’s less efficient capital markets offering more scope for active management, profit margins for asset managers in the region remained roughly double those of managers in North America and Western Europe, Katsuki said.

Within the region, China remained the prime dynamo driving global asset management inflows, accounting for more than 65 per cent of global flows in the latest year.

Growing allocations from pension funds and insurance companies, meanwhile, continue to redefine the region’s institutional landscape.

The report said while pension funds, with a 40 per cent share of institutional AUM, remain the dominant client segment, allocations from insurance companies are growing quickly – accounting for a majority of institutional flows in 2018 that boosted their share of AUM to 10 per cent from 7 per cent.

Vishal Kaushik, a Singapore-based senior expert at McKinsey, said a growing hunt for yield now has prompted insurers to boost allocations to external managers of fixed income and multi-asset strategies. That, in turn, has lifted their share of institutional flows to 70 per cent to 80 per cent from 30 per cent to 50 per cent a few years ago, he said.

To adapt to tougher conditions ahead, McKinsey’s report cited the need to add scale, potentially through acquisitions; increase focus on “digitising the value chain”; and ensure fee flexibility by focusing on solutions-oriented offerings such as multi-asset strategies.

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