Tan Chong International unveils new Subaru plant in Thailand

Singapore-based, Hong Kong-listed Tan Chong International Limited (TCIL) has officially unveiled its first Subaru assembly plant in Bangkok's Ladkrabang Industrial Estate. Named Tan Chong Subaru Automotive (Thailand) Limited (TCSAT), it is a joint venture between TCIL and Japan's Subaru Corporation, driven by the need to meet the increasing demand for Subaru's best-selling model in South East Asia.

TCIL owns a majority 74.9% stake in the plant through its subsidiary, TC Manufacturing and Assembly (Thailand) Limited, while Subaru Corporation holds the remaining 25.1%. Occupying more than 100,000m², it is situated just about 10km from Suvarnabhumi Airport and 30km from central Bangkok.

Thailand's status as an automotive hub, with many Japanese automakers such as Honda and Toyota, established suppliers of components and strong localisation ability, meant the plant could be started up quickly and at a reasonable cost.

With an initial investment of $5 billion baht ($212.3 million), it will deliver more than 6,000 fifth generation, Completely Knocked-Down (CKD) Subaru Foresters in its first operating year.

According to Mr. Tomohiro Ishitobi, Senior General Manager of Overseas Sales and Marketing at Subaru, 43% of the CKD Forester's components are made by local suppliers. These include things like the seats, dash panels, infotainment systems and tyres.

It is also the first plant outside Japan to fully produce Subaru cars in Asia. The Tan Chong Motor Assemblies plant in Segambut, Malaysia, which assembles the Subaru XV and Subaru Forester, does not only focus on the Subaru brand.

At maximum operating capacity, the Ladkrabang plant is expected to produce about 100,000 cars per year, consisting of four Subaru models. For now, neither TCIL nor Subaru can confirm what the other three models will be.

Motor Image Group, a wholly owned subsidiary of TCIL, will distribute the cars in Thailand, Malaysia, Vietnam and Cambodia. Some 100 Foresters have already been delivered to customers in Thailand.

Motor Image also reported record sales figures at the Bangkok International Motor Show in March, largely contributed by strong consumer interest in the model. Singapore customers, however, will continue getting the made-in-Japan Foresters for now. This is due to our stricter Euro 6 carbon emission standards, which the Thai-assembled models currently do not meet.

Speaking at the opening, Mr. Glenn Tan, Deputy Chairman and Managing Director of TCIL, said, "This is truly a milestone for us, to be able to build Subaru cars ourselves in Thailand. From distribution, dealerships and aftersales, we are now also manufacturing Subaru cars."

"This strategic long-term move will allow us to better manage our supply chain, widen our product lineup, localise better and be less dependent on supply from Japan. We will be better able to respond and meet consumer demand for Subaru cars in the region, and perhaps even beyond the region in future."

The facility also has its own test track, built to assess the condition of every Subaru before it leaves the plant. It is currently staffed by more than 400 local workers, who are supported by expatriates from Japan, Malaysia, the Philippines and Singapore.