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Thai Rung Union Car Public Company Limited SET Opportunity Day, 8 th March 2006

Thai Rung Union Car Public Company Limited SET Opportunity Day, 8 th March 2006. Presented by: Sompong Phaoenchoke, Managing Director. http://www.thairung.co.th. Contents. Introduction Scope of Business Group Structure Industry Overview TRU Sales Breakdown Future Strategy

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Thai Rung Union Car Public Company Limited SET Opportunity Day, 8 th March 2006

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  1. Thai Rung Union Car Public Company Limited SET Opportunity Day, 8th March 2006 Presented by: Sompong Phaoenchoke, Managing Director http://www.thairung.co.th

  2. Contents • Introduction • Scope of Business • Group Structure • Industry Overview • TRU Sales Breakdown • Future Strategy • TRU’s Performance Prospects for 2006F

  3. Scope of Business • Research & Development (‘R&D’), Body Design & Process Engineering • Tool & Die Making • OEM (‘Original Equipment Maker’) Pressed Metal Parts • Auto Assembly • Contract Assembly • Original Design • Seats & Seat Components • Land Rover Dealer for Greater Bangkok • After-Sales Service

  4. Group Structure Thai Rung Union Car Public Company Limited “TRU” 46% 30 % Thai Auto Conversion Co. Ltd. (Joint venture with Toyota Group) Delta-TR Co. Ltd. (Joint venture with Delta Kogyo) • R&D • Pressed Metal Parts • Auto Assembly • Auto Seats & Components • Special Purpose Vehicles 91 % 91 % 94 % 94 % Thai Rung Tools & Dies Co. Ltd.* Thai V.P. Auto Service Co. Ltd. Thai Auto Press Parts Co. Ltd. (Amata City, Rayong Province) Thai Auto Body Assembly Co. Ltd. (not yet active) • Dies & Jigs • After-Sales Service • Spare Parts • Body Repair & Paint • Specialist Auto Body Maker • Special Orders • Government Tenders *Former name Thai Rung General Motor • Pressed Metal Parts • Plastic Parts 90 % 99.53 % TRU Leasing Co. Ltd. Thai Ultimate Car Co. Ltd. • Land Rover Dealer for Greater Bangkok • Accessories & Spare Parts • Rental, Leasing and Hire-purchase Finance of motor vehicles

  5. Thailand’s Total Vehicle Production and Exports (1996-2010F) Sources: Actual to 2005: Thailand Automotive Institute, Forecast: TRU • Thailand’s total vehicle production rose 21.25% in 2005 to 1,125,356 units, surpassing the million mark a year earlier than targeted. Out of this total, 440,715 (39.2%) were exported. • We believe growth will continue over the next few years at a lower, sustainable, rate of around 12% p.a.

  6. Total Auto Sales in Thailand (1996-2010F) Units 1,500,000 1,250,000 Average growth 23.9% p.a. 1,000,000 703,432 626,041 750,000 533,176 589,126 500,000 250,000 144,065 1997 2004 2003 2005 2006F 2008F 2010F 1996 1999 2007F 2009F 1998 2002 2001 2000 Sources: Actual: Thailand Automotive Institute, Forecast: TRU • At 703,432 units for the year, new vehicle sales for 2005 were up 12.4% on 2004, despite higher fuel prices, surpassing most forecasts. • The Thai auto market continues to grow despite worries over the general economy. • We expect growth to continue over the next few years at a lower, sustainable, rate of around 8% p.a.

  7. Total Export Value, Vehicles & Parts, 1996 to 2005 Baht millions 300,000 250,000 200,000 150,000 Parts 100,000 CBU 50,000 2005 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: Thailand Automotive Institute • In 2005, Thailand’s total CBU exports reached 440,715 units, 33% up on 2004. • Total automotive & parts exports for 2005 shot up by 45.6% compared to 2004, to reach 294 billion baht. • TRU increasingly benefits from rising demand for OEM auto parts used in finished auto exports, which looks set to continue.

  8. Export of Auto Parts from Thailand Baht millions 100,000 80 , 000 60 , 000 40 , 000 20,000 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Source: Thailand Automotive Institute • Thailand’s auto parts exports exceeded Bt.91 billionin 2005, up by an impressive 72.6% on 2004. • Despite rising fuel costs and other worries, the trend looks set to continue. • TRU’s OEM auto parts sales have started to benefit and will benefit further from Thailand’s continuously expanding auto exports.

  9. TRU Sales Breakdown 4Q05 Total Sales Q2/05 Q3/05 Q1/05 Q4/04 Q4/05 847.24 776.05 879.14 Bt. millions 669.00 673.34 +16.0% -0.6% +9.2% Change QoQ -23.4% -14.9% Change YoY -24.9% -22.6% -33.4% -27.8% -3.6% Breakdown Q4 2005 • In Q3 2005 TRU’s sales recovered somewhat, thanks to sales of taxis and improving parts sales. • In Q4 there was further growth, largely from Service and Other Sales Income, which rose by Bt.81m or 71% QoQ. • TRU’s 4Q2005 sales were down by just 3.6% YoY, indicating that recovery is under way. Service & Other Sales Income 23.0% Modified Vehicles 17.4% Dies & Jigs 3.2% Parts Sales 30.9% Retail Vehicle Sales 25.5%

  10. TRU Sales Breakdown Both the the fall-off in sales of modified vehicles and the Company’s success in boosting the OEM Parts area of its business, are reflected in the changing breakdown of sources of income as seen below, with Modified Vehicles down from 37% of Total Revenues in 2003 to just 24% in 2005, and OEM Parts Sales rising to 29% from 9% two years ago. Year 2003 2004 2005 Total Revenues Bt.3,326 million Bt. 3,970 million Bt. 3,050 million Service & Other Sales Income 403 M฿ 12% Service & Other Sales Income 463 M฿ 12% Modified Vehicles 1,218 M฿ 37% Modified Vehicles 1,686 M฿ 42% Service & Other Sales Income 589 M฿ 19% Modified Vehicles 744 M฿ 24% Retail Vehicle Sales 1,092 M฿ 27% Retail Vehicle Sales 1,016 M฿ 31% Retail Vehicle Sales* 693 M฿ 23% Dies & Jigs 110 M฿ 3% Dies & Jigs 143 M฿ 5% OEM Parts 317 M฿ 9% OEM Parts 875 M฿ 29% SKD Export 341 M฿ 10% SKD Export 6 M฿ 0% Dies & Jigs 31 M฿ 1% OEM Parts 471 M฿ 12% SKD Export 148 M฿ 4% Note: Retail Vehicle Sales includes some charges for assembly and fitting of accessories

  11. TRU OEM Parts Sales Trend 2003-2005 Mil. Baht % Growth

  12. TRU Future Strategy: Boosting Parts Business • TRU’s strategy is to continue boost the contribution made by parts sales. • Margins on OEM parts are lower than those on modified vehicles, typically not more than 15% gross for standard pressed parts. However, parts orders tend to go with model life, and therefore provide stability and volume. • Opportunities to enhance margins by adding value, e.g. by incorporating design elements, sub-assembly. • Greater growth potential given continued relocation of multinational automakers to Thailand and their increasing use of Thailand as an export manufacturing base. • Automakers expanding production facilities – e.g. Toyota’s new plant at Chachoengsao,Nissan’s production expansion and export plans. TRU will boost capacity in order to make the best use of all opportunities arising from this growth. • We have recently imported additional machines for Thai Auto Pressparts Co Ltd., the Group’s modern, purpose-built press plant at Amata City Industrial Estate, Rayong. • We have started selling plastic parts (fenders, etc.) made by Thai Auto Pressparts.

  13. TRU Future Strategy: Boosting Parts Business • OEM Sales team has been strengthened and enlarged. • We have expanded our customer portfolio, adding a number of new names including Mitsubishi (2nd tier.) We will continue to broaden our range of customers. • Upgrading and expanding die-making facilities at Thai Rung Tools & Dies Co. Ltd (formerly Thai Rung General Motors.) • Estimated capital expenditure: Thai Auto Pressparts Bt.500-600m + Thai Rung Tools & Dies Bt.120m., total Bt.620-720m. over the next three years. • The ‘flat deck’ which we have been making for Isuzu for the last few years, has been performing very well, with exports running to several hundred per month. We aim to maximize this further. • Opportunities for developing new versions of ‘flat deck’ for other pick-up makers, both for export and with a view to introducing this type of deck to the Thai market. • We are branching out into new areas of parts making: - accessories, plastic parts – initial success of “Parto” accessories for Toyota Fortuner, plans for Yaris accessories, initially for Thai market, but with good prospects for exports in the future.

  14. TRU Future Strategy: Modified Vehicles • TRU will continue to develop and bring to market new multi-purpose vehicles, in line with its long success story of meeting Thai customers’ needs for comfort, luxury and versatility. • Update on deliveries of TR Bangkok Limousine taxis • We sold a total of 257 units in 2005 mainly under the joint TR-SME Bank project. • Forecast for 2006 is 800-1,000 units. • Marginson sales of taxis are similar to those on other modified vehicles. • Medium-term aim is to capture 10%-15% of total taxi market. There are currently around 80,000 taxis in operation. By law they must be replaced after 9 years, with effect from 2006 (previously 12 years). • Since February this yearTR Bangkok Limousines can be registered as vehicles for hire (“green plate”) which means they can now be sold to hotels, car hire companies, etc.

  15. TRU Future Strategy: Contract Assembly • TRU is one of the very few Thai-owned fully integrated assembly facilities. • TRU has experience in this field, e.g. in the past, many years assembling the Isuzu‘Buddy’ van, and currently, Komatsu excavator cabs. • TRU is therefore well placed to win assembly contracts from newcomers to the Thai market. • These newcomers are attracted partly by Thailand’s export potential, and by the benefits of AFTA and various bilateral FTAs. TRU stands to gain from this. • We are in discussions with such potential new foreign entrants. • In any such agreement we would strive to develop a partnership where we could add value by utilizing our experience and integrated facilities.

  16. TRU Retail Vehicle Sales • In 2005 TUC sold 180 vehicles. • More than 130 (70%) were locally assembled Freelanders. • Sales of Discovery and Range Rover, already expensive as CBU imports, suffered from the high rates of excise tax applied to larger engine vehicles. • Target for 2006 is 150 vehicles.

  17. TRU’s Performance Prospects for 2006F • In 2006F TRU will continue to derive a large proportion of its sales from modified vehicles • Sales of the TR Bangkok Limousine will improve performance for 2006. • The Company continues to strive to develop new models to meet consumer requirements. • The PARTS DIVISION will again show strong growth in 2006F. • Parts pressing and sub-assembly at Thai Auto Pressparts of Isuzu D-Max chassis frame parts, GM Chevrolet Optra body parts, and various Toyota parts all continue to grow. • We plan to develop new versions of the ‘flat deck’ currently made for Isuzu, for sale to other makers. • Komatsu, a long-valued customer, has embarked upon an interesting export expansion program in which we are playing a meaningful part. • Thanks to the sustained growth of the Thai auto industry, we have won additional stamping work from other makers with capacity constraints, and continue to seek opportunities of this kind. • We will continue to broaden our customer portfolio. • We aim to boost OEM parts sales by a further 25%-30% in 2006 • As well pushing OEM parts, we are also moving into the field of ACCESSORIES, which offers great potential, not only in Thailand but for export markets too. • CONTRACT ASSEMBLY provides interesting opportunities which are being explored.

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