Volvo sets up in Thailand to take advantage of coming AEC
The well-known and highly-regarded Swedish automobile manufacturer Volvo Group believes the advent of the Asean Economic Community (AEC) at the end of 2015 will see the Southeast Asian regional economy grow by an average of five to six percent each year.
The Volvo Group sees this growth as being very good for the truck market, and the Swedish company has been concentrating on setting itself up as a leader in this market segment by creating strategic bases in China, India, and Thailand.
Volvo has focused on investing and expanding its facilities across the Asia-Pacific region, with the Chinese market easily the largest segment, with expected demand for heavy-duty trucks in China expected to reach 750,000 units. However, Thailand is also a major player for Volvo with heavy-duty truck demand estimated to run at around 100,000 units across the Southeast Asian region.
In December 2014, Volvo Group announced that it had completed a five billion baht investment plan in Thailand, which included spending one billion baht setting up its regional headquarters in the country. As well as becoming a key player across the region in the heavy haulage sector, Volvo Group has also identified the growing logistics business across Asean as another area where it can take on a leading role.
Volvo Group first introduced Volvo trucks to Thailand in 2008, and a few years later followed up with UD Trucks, which were formerly known as Nissan Diesel. UD had become part of Volvo in 2007.
Thailand is the current global production base for the export of Volvo and UD trucks, especially supplying the Southeast Asian, Middle Eastern, and African marketplaces.
In August 2014, Volvo Group launched another brand of heavy-duty trucks, called Quester, at its assembly plant, which is situated in Bangkok on the Bang Na-Trat Road.
Quester is the first UD truck to be developed for growth markets, where costs and the overall demand need to be managed carefully because these markets are not yet in a position to require, or be able to afford, the higher end products. As Volvo noted, their heavy-duty trucks remain focused on the premium segment of the overall market place.
In 2009 the Volvo Group invested around two billion baht to expand their annual production capacity in Thailand to 4,500 Volvo trucks and 20,000 UD trucks. As well, between 2011 and the first quarter of 2014, Volvo increased the number of their service centres and wholly-owned showrooms from five to 15 across Thailand, spending about three billion baht in the process.