Siam GS Sales, the distribution arm of Siam GS Battery, has sharply increased its sales target for the year from Bt2.5 billion to Bt3.5 billion amid strong growth in the local replacement market.
Siam GS Battery, which manufactures batteries for motored vehicles, earlier this year changed its sales strategy to focus on the replacement-equipment manufacturing (REM) market, as original-equipment manufacturing (OEM) is expected to shrink heavily this year in line with overall automotive production.
Prakasit Phornprapha, director of Siam GS Battery and Siam GS Sales, the manufacturer and distributor of GS Battery for automobiles, said the company had already achieved a 50-per-cent share in the replacement market, which is worth about Bt5.5 billion, higher than the 40-per-cent share targeted at the beginning of this year.
He said the global economic downturn had affected the automotive industry worldwide, leading to a slowdown in the OEM car-battery market. The company has therefore shifted its focus on growth of the replacement battery business in the domestic market, with the goal of boosting its share of the REM market to 60 per cent within this year.
"Local consumers have delayed their purchase of new vehicles amid the economic recession. They have used their old cars even longer. This helps our battery sales in the replacement market as people have changed batteries for the maintenance of their old vehicles," said Prakasit.
The company yesterday launched an integrated marketing communications campaign with Peter Corp Dyrendal, well-known artist, as new presenter in the latest commercial, being created under the 'World Class Technology' concept.
"We are injecting an additional Bt25 million into marketing to be held in the second half of this year, raising the year's total budget to above Bt100 million," said Prakasit. He said that Peter himself represents independent new generation people, aged under 30, who have great confidence. This will help boost brand recognition, especially among the target group of first jobbers, and serve as strong support for dealers nationwide in terms of product promotion and sales.
Saran Chinprahat, managing director of Siam GS Sales, said that the company's performance during the first half of this year was pleasing as it saw a year-on-year growth of 15 per cent in value and 50 per cent in volume in the domestic sales of replacement battery.
Monday, August 24, 2009
Bosch debuts no top-up auto battery
Bosch has launched a sealed maintenance-free battery to strengthen its product lineup in the increasingly competitive auto-battery market.
The S3 MF is an entirely maintenance-free battery with a labyrinth structure and ventilated cover that is sealed from the factory. The battery therefore requires no topping up over its lifespan of 18-24 months.
"This will make the battery problem-free for customers and increase their convenience," said Yingyuad Whangprayoat, general manager of Robert Bosch Thailand's automotive after-market division.
The S3 MF battery also uses calcium production technology, which ensures precise starting power.
The automative battery aftermarket has heated up this year with manufacturers shifting their focus to the aftermarket as demand from automakers dried up.
Bosch is aiming the S3 MF battery at almost all Japanese passenger and pickup vehicles.
But Mr Yingyuad gave no figure for the targeted market share or total value of the market.
The S3 MF is an entirely maintenance-free battery with a labyrinth structure and ventilated cover that is sealed from the factory. The battery therefore requires no topping up over its lifespan of 18-24 months.
"This will make the battery problem-free for customers and increase their convenience," said Yingyuad Whangprayoat, general manager of Robert Bosch Thailand's automotive after-market division.
The S3 MF battery also uses calcium production technology, which ensures precise starting power.
The automative battery aftermarket has heated up this year with manufacturers shifting their focus to the aftermarket as demand from automakers dried up.
Bosch is aiming the S3 MF battery at almost all Japanese passenger and pickup vehicles.
But Mr Yingyuad gave no figure for the targeted market share or total value of the market.
GS sets sights on 60% market share
Siam GS Sales, a leader in the storage battery market, is confident of maintaining its lead in the aims for market share of at least 60% market share this year as the local replacement market for automotive batteries continues to grow.
Prakasit Phornprapha, director of Siam GS Sales, part of the Siam Motors Group,said the company's broad product range and increased marketing budget would help the firm meet its goal.
The company expected to see its sales climb by 10.7% to 3.3 billion baht this year from 2.98 billion in 2008 despite a sluggish automotive market.
The company will spend 25 million baht on marketing for the rest of the year, bringing the annual total to more than 100 million.
Part of the marketing budget has been used to launch an integrated marketing campaign using rock singer Peter Corp Dyrendal as a product presenter. The new ads use a "World Class Technology"concept to promote the brand among independent buyers.
"This will help boost brand recognition, especially among our target group of those on their first job, and support our dealers nationwide in terms of product promotion and sales," said Mr Prakasit, a son of Mr Phornthep, the group chairman of Siam Motors.
Siam GS Sales managing director Saran Chinprahat said the replacement market for automotive batteries grew significantly in the first half this year.
But demand from automobile makers for batteries dropped as a result of poor automotive sales both abroad and at home.
"As consumers delay buying new vehicles, increased maintenance spending,including replacement batteries, for the existing eight million units on the streets is inevitable," said Mr Saran.
Because sales reached nearly 2 billion baht in the past seven months, Siam GS Sales increased its sales target to 3.3 billion.
"The success can be attributed to the variety of our marketing activities," said Mr Saran.
"The activities include monthly sales promotions, roadshows, free inspection service and new products offering consumers more choices emphasising product quality and reasonable prices."
The company introduced the D-Tech series of maintenance-free batteries yesterday for passenger and pickup vehicles.
The new series was a joint development between GS battery in Thailand and Japan featuring Dry-MF Technology (D-Tech).
Mr Saran said he is confident the new battery will help the company gain an additional 10% market share this year.
The retail price of the D-Tech series is about 3% cheaper than a conventional maintenance-free battery.
Prakasit Phornprapha, director of Siam GS Sales, part of the Siam Motors Group,said the company's broad product range and increased marketing budget would help the firm meet its goal.
The company expected to see its sales climb by 10.7% to 3.3 billion baht this year from 2.98 billion in 2008 despite a sluggish automotive market.
The company will spend 25 million baht on marketing for the rest of the year, bringing the annual total to more than 100 million.
Part of the marketing budget has been used to launch an integrated marketing campaign using rock singer Peter Corp Dyrendal as a product presenter. The new ads use a "World Class Technology"concept to promote the brand among independent buyers.
"This will help boost brand recognition, especially among our target group of those on their first job, and support our dealers nationwide in terms of product promotion and sales," said Mr Prakasit, a son of Mr Phornthep, the group chairman of Siam Motors.
Siam GS Sales managing director Saran Chinprahat said the replacement market for automotive batteries grew significantly in the first half this year.
But demand from automobile makers for batteries dropped as a result of poor automotive sales both abroad and at home.
"As consumers delay buying new vehicles, increased maintenance spending,including replacement batteries, for the existing eight million units on the streets is inevitable," said Mr Saran.
Because sales reached nearly 2 billion baht in the past seven months, Siam GS Sales increased its sales target to 3.3 billion.
"The success can be attributed to the variety of our marketing activities," said Mr Saran.
"The activities include monthly sales promotions, roadshows, free inspection service and new products offering consumers more choices emphasising product quality and reasonable prices."
The company introduced the D-Tech series of maintenance-free batteries yesterday for passenger and pickup vehicles.
The new series was a joint development between GS battery in Thailand and Japan featuring Dry-MF Technology (D-Tech).
Mr Saran said he is confident the new battery will help the company gain an additional 10% market share this year.
The retail price of the D-Tech series is about 3% cheaper than a conventional maintenance-free battery.
Thursday, August 20, 2009
AH expects H2 turnaround
Aapico Hitech Plc (AH), a manufacturer of auto parts and pickup truck frames,expects second-half revenue to rise by 30% to 40% from the first half as the domestic and global auto market improves.
The auto industry is expected to fully recover in 2010, with sales of 1.2 million forecast for next year compared with fewer than 1 million this year, said Yeap Swee Chuan, the AH president and chief executive.
The launch of fuel-efficient "eco-cars"and new sub-compact "B" cars will help drive growth next year, he told investors at a briefing at the Stock Exchange of Thailand yesterday.
Domestic sales, meanwhile, have shown signs of recovery, with sales up to 30,000 units in June from a low of 10,000 in March.
In any case, AH expects full-year 2009 revenue to be from 25% to 30% less than the 9.53 billion baht reported last year,due to the plunge in sales in the first half of the year. Growth is expected to rebound to between 15% to 20% in 2010.
AH reported first-half revenue of 3 billion baht, down from 4.78 billion in the same period last year. Second-quarter revenue fell to 1.54 billion baht from 2.46 billion last year.
The company posted a first-half loss of 109.9 million baht, compared with profit of 249.4 million last year. Secondquarter losses totalled 39 million baht,compared with profit of 107.26 million in the same period last year.
The launch of Nissan's new eco-car in 2010 will help boost AH sales, said Mr Yeap. Nissan currently provides 5% of the company's revenue.
"Six or seven years ago, we did not have Isuzu as a client. It is now our biggest customer, at 34% of revenues,"he said.
"Three years ago, we had no Nissan.But it soon will become our biggest customer, with good growth prospects."
Shares of AH closed yesterday on the SET at 5.25 baht, up 25 satang, in trade worth 7.5 million baht.
The auto industry is expected to fully recover in 2010, with sales of 1.2 million forecast for next year compared with fewer than 1 million this year, said Yeap Swee Chuan, the AH president and chief executive.
The launch of fuel-efficient "eco-cars"and new sub-compact "B" cars will help drive growth next year, he told investors at a briefing at the Stock Exchange of Thailand yesterday.
Domestic sales, meanwhile, have shown signs of recovery, with sales up to 30,000 units in June from a low of 10,000 in March.
In any case, AH expects full-year 2009 revenue to be from 25% to 30% less than the 9.53 billion baht reported last year,due to the plunge in sales in the first half of the year. Growth is expected to rebound to between 15% to 20% in 2010.
AH reported first-half revenue of 3 billion baht, down from 4.78 billion in the same period last year. Second-quarter revenue fell to 1.54 billion baht from 2.46 billion last year.
The company posted a first-half loss of 109.9 million baht, compared with profit of 249.4 million last year. Secondquarter losses totalled 39 million baht,compared with profit of 107.26 million in the same period last year.
The launch of Nissan's new eco-car in 2010 will help boost AH sales, said Mr Yeap. Nissan currently provides 5% of the company's revenue.
"Six or seven years ago, we did not have Isuzu as a client. It is now our biggest customer, at 34% of revenues,"he said.
"Three years ago, we had no Nissan.But it soon will become our biggest customer, with good growth prospects."
Shares of AH closed yesterday on the SET at 5.25 baht, up 25 satang, in trade worth 7.5 million baht.
Toyota to raise output, inks Sanyo deal
Toyota Motor has raised its production target for this year and plans to start buying batteries from Sanyo Electric to meet brisk demand forr its hybrid vehicles, reports said yesterday.
The world's largest auto-maker now aims to produce 5.95 million vehicles in 2009, up from a prevous goal of 5.8 million, the Nikkei business daily and other media reported without naming sources.
Toyota is enjoying brisk demand for its remodelled Prius, which has been Japan's top-selling car in recent months as government incentives spur strong demand for fuel-efficient vehicles.
The Japanese giant will buy some 10,000 lithium-ion batteries a year from Sanyo from 2011 because its battery joint venture with Panasonic is having difficulty keeping up with strong demand, the Nikkei said. Sanyo, which is being bought by Panasonic, now supplies nickel-metal hydride batteries to Honda Motor and Ford. It also plans to supply lithium-ion batteries to Germany's Volkswagen.
A Toyota spokesman declined to comment on teh reports, which sent Sanyo shares soaring more than 10 per cent to 247 yen, while Toyotal shares gained 0.2 per cennt to 4,050, Yen outperforming the wider market
The world's largest auto-maker now aims to produce 5.95 million vehicles in 2009, up from a prevous goal of 5.8 million, the Nikkei business daily and other media reported without naming sources.
Toyota is enjoying brisk demand for its remodelled Prius, which has been Japan's top-selling car in recent months as government incentives spur strong demand for fuel-efficient vehicles.
The Japanese giant will buy some 10,000 lithium-ion batteries a year from Sanyo from 2011 because its battery joint venture with Panasonic is having difficulty keeping up with strong demand, the Nikkei said. Sanyo, which is being bought by Panasonic, now supplies nickel-metal hydride batteries to Honda Motor and Ford. It also plans to supply lithium-ion batteries to Germany's Volkswagen.
A Toyota spokesman declined to comment on teh reports, which sent Sanyo shares soaring more than 10 per cent to 247 yen, while Toyotal shares gained 0.2 per cennt to 4,050, Yen outperforming the wider market
Monday, August 17, 2009
HAPPY BIRTHDAY, TO THE SEATBELT!
Yep, the three-point seatbelt found in our cars is 50 years old this month, thanks to Swede Nils Bohlin, a Volvo car engineer.
Mr Bohlin had found that the existing two-point lap belt only helped to prevent the occupant from being slingshot through the windscreen, but could not stop serious back injury or banging against the inside of the car.
So he devised a way to anchor one piece of fabric belt to not only secure the hips to the seat but hold the occupant's upper body in place by inventing a new anchorage point on the car's central pillar (aka B-pillar).
Mr Bohlin proposed to Volvo that the company install his invention as a standard safety feature in all of their passenger cars, before the practice became the worldwide industry standard for front seat occupants.
It took another eight years for the three-point seat belt to be fitted in the rear seats of Volvos and another two years before the inertia-reel type that we use today became standard for the front seat.
Many cars' front seatbelts today have further safety enhancements such as pre-tensioners,where a device senses a frontal crash and triggers the belt mechanics to instantly pull the belts tight to minimise injury.
Is there any more that can be done to improve seat belts?Yes, you might notice that all race cars have four (two shoulder straps and two lap straps)or even six-point seatbelts (like the four-pointer but with two crotch straps) these types firmly hold the body in place.
The less the body moves, the less likely it is to sustain injury in a crash.Of course, road cars need to have some slack and freedom of movement so that the wearer is happy travelling, while still being equipped with devices that automatically secure occupants in dangerous moments.
So, don't be surprised if the next generation of seat belts has four straps.The only questions are whether they come in the normal H-pattern or an X-pattern, and who will put them in a production car first?
NEXT SUNDAY inDrive : an independent car service network knows how to service your car.Watch my electric Mini E video clip on youtube.com/wiwatchang Emails go to brunchdrive@gmail.com and my tweets are on twitter.com/wiwatchang
LIFE SAVER: Nils Bohlin,inventor of the three-point safety belt.
Mr Bohlin had found that the existing two-point lap belt only helped to prevent the occupant from being slingshot through the windscreen, but could not stop serious back injury or banging against the inside of the car.
So he devised a way to anchor one piece of fabric belt to not only secure the hips to the seat but hold the occupant's upper body in place by inventing a new anchorage point on the car's central pillar (aka B-pillar).
Mr Bohlin proposed to Volvo that the company install his invention as a standard safety feature in all of their passenger cars, before the practice became the worldwide industry standard for front seat occupants.
It took another eight years for the three-point seat belt to be fitted in the rear seats of Volvos and another two years before the inertia-reel type that we use today became standard for the front seat.
Many cars' front seatbelts today have further safety enhancements such as pre-tensioners,where a device senses a frontal crash and triggers the belt mechanics to instantly pull the belts tight to minimise injury.
Is there any more that can be done to improve seat belts?Yes, you might notice that all race cars have four (two shoulder straps and two lap straps)or even six-point seatbelts (like the four-pointer but with two crotch straps) these types firmly hold the body in place.
The less the body moves, the less likely it is to sustain injury in a crash.Of course, road cars need to have some slack and freedom of movement so that the wearer is happy travelling, while still being equipped with devices that automatically secure occupants in dangerous moments.
So, don't be surprised if the next generation of seat belts has four straps.The only questions are whether they come in the normal H-pattern or an X-pattern, and who will put them in a production car first?
NEXT SUNDAY inDrive : an independent car service network knows how to service your car.Watch my electric Mini E video clip on youtube.com/wiwatchang Emails go to brunchdrive@gmail.com and my tweets are on twitter.com/wiwatchang
LIFE SAVER: Nils Bohlin,inventor of the three-point safety belt.
Helmet delicacy
There are two sides to Felipe Massa's tragic accident in Hungary recently:either the helmet he wore gave poor protection or it helped save his life. I believed it was the latter.
The coil spring that broke loose from Brawn GP racecar of fellow driver Brazilian Rubens Barichello bounced back in to the path of Massa's car and struck him in the helmet while speeding at around 260kph.
That Massa escaped death can be attributed to a combination of factors - doctors' competence, modern medical facilities, the circuit medical team's prompt rescue and the driver's helmet.
Following Aryton Senna's tragic death in 1994 at Imola when he rammed his car at speed and a broken metal suspension from his car breached his helmet causing fatal injury, the FIA Institute has worked with experts from various disciplines to develop a safer helmet among numerous other safety equipment, technical specifications and rules.
The currently enforced technical specification for the helmets is called the FIA standard 8860-2004 made compulsory to all F1 drivers since 2005.
The standard requires test methods according to latest procedures laid down by the globally recognised helmet testing facility, Snell Foundation in the USA.
To evaluate a helmet model conforming with FIA's standard 8860-2004, the helmet manufacturer had to give six identical samples for a dozen laboratory tests.
The tests include impact testing where a machine pounds the test helmet worn by a sensor-equipped dummy head. The helmet needs to be able to dissipate a certain amount of energy to minimise life-threatening injury to the wearer.
It needs to pass a penetration test which is more stringent than existing Snell SA2000 standard in which a four kilogramme metal cone is dropped with its tip pointing downward from a height of three metres. It must also stand crush tests, the applied force amounting to 500 joules.
The kind of structure that can tolerate such abuses is a relatively newly developed composite shell consisting carbon fibre, fibre-reinforced resin and polyethlene.
The inner part of the helmet is a special foam wrapped in flame-retardant Nomex fabric not unlike the material used for the race drivers' fireproof overalls.
The visor is made from tough polycarbonate with specifications closer to that of an astronaut's helmet visor than the lenses of a modern pair of sunglasses.
This visor has to withstand a ballistic test where metal pellets are shot upon at speed faster than any current F1 racecar can achieve.
Still, it is a big weak point of a helmet,but extensive research and investigation into Massa's incident could pave the way for an even safer helmet.
But there is no need to panic on the issue of helmets because people in the motorsport know fully well that car racing in still a very dangerous sport no matter what precautions are taken, and that the Massa episode was rather untypical of accidents that generally occur on the race track.
The coil spring that broke loose from Brawn GP racecar of fellow driver Brazilian Rubens Barichello bounced back in to the path of Massa's car and struck him in the helmet while speeding at around 260kph.
That Massa escaped death can be attributed to a combination of factors - doctors' competence, modern medical facilities, the circuit medical team's prompt rescue and the driver's helmet.
Following Aryton Senna's tragic death in 1994 at Imola when he rammed his car at speed and a broken metal suspension from his car breached his helmet causing fatal injury, the FIA Institute has worked with experts from various disciplines to develop a safer helmet among numerous other safety equipment, technical specifications and rules.
The currently enforced technical specification for the helmets is called the FIA standard 8860-2004 made compulsory to all F1 drivers since 2005.
The standard requires test methods according to latest procedures laid down by the globally recognised helmet testing facility, Snell Foundation in the USA.
To evaluate a helmet model conforming with FIA's standard 8860-2004, the helmet manufacturer had to give six identical samples for a dozen laboratory tests.
The tests include impact testing where a machine pounds the test helmet worn by a sensor-equipped dummy head. The helmet needs to be able to dissipate a certain amount of energy to minimise life-threatening injury to the wearer.
It needs to pass a penetration test which is more stringent than existing Snell SA2000 standard in which a four kilogramme metal cone is dropped with its tip pointing downward from a height of three metres. It must also stand crush tests, the applied force amounting to 500 joules.
The kind of structure that can tolerate such abuses is a relatively newly developed composite shell consisting carbon fibre, fibre-reinforced resin and polyethlene.
The inner part of the helmet is a special foam wrapped in flame-retardant Nomex fabric not unlike the material used for the race drivers' fireproof overalls.
The visor is made from tough polycarbonate with specifications closer to that of an astronaut's helmet visor than the lenses of a modern pair of sunglasses.
This visor has to withstand a ballistic test where metal pellets are shot upon at speed faster than any current F1 racecar can achieve.
Still, it is a big weak point of a helmet,but extensive research and investigation into Massa's incident could pave the way for an even safer helmet.
But there is no need to panic on the issue of helmets because people in the motorsport know fully well that car racing in still a very dangerous sport no matter what precautions are taken, and that the Massa episode was rather untypical of accidents that generally occur on the race track.
Wednesday, August 12, 2009
LG forges new battery deal with GM
South Korea's LG Chem said yesterday it has signed a new deal to supply batteries for an electric car to be produced by US auto giant General Motors.
LG Chem, part of the LG group, said it would supply lithium-ion polymer batteries for GM's plug-in midsize Buick sport utility vehicle to be launched in 2011.
The company refused to give details of the deal, which follows a separate contract in January to make lithium-ion batteries for GM's all-electric Chevrolet Volt car from 2010 until the end of 2015.
LG Chem said at the time it would spend one trillion won (Bt27.8 billion) to build a new battery production line for GM at its factory in Ochang south of Seoul.
The Volt is designed to run 64 kilometres on a single battery charge. Beyond that range, it uses a petrol engine, which drives a generator to produce electrical power.
LG has said the January deal would it become a major supplier of batteries for a new generation of environmentally-friendlly electric cars.
It also plans to provide lithium-ion batteries for hybrid electric vehicles to be produced by South Korean carmakers.
LG Chem, part of the LG group, said it would supply lithium-ion polymer batteries for GM's plug-in midsize Buick sport utility vehicle to be launched in 2011.
The company refused to give details of the deal, which follows a separate contract in January to make lithium-ion batteries for GM's all-electric Chevrolet Volt car from 2010 until the end of 2015.
LG Chem said at the time it would spend one trillion won (Bt27.8 billion) to build a new battery production line for GM at its factory in Ochang south of Seoul.
The Volt is designed to run 64 kilometres on a single battery charge. Beyond that range, it uses a petrol engine, which drives a generator to produce electrical power.
LG has said the January deal would it become a major supplier of batteries for a new generation of environmentally-friendlly electric cars.
It also plans to provide lithium-ion batteries for hybrid electric vehicles to be produced by South Korean carmakers.
Auto-parts stocks seen in fast lane
Brighter prospects are expected for automotive stocks in the latter half, experts say, citing that the industry bottomed out in the second quarter and orders have started flowing in to revive the sector's performance in the current quarter.
Yeap Swee Chuan, chairman of SETlisted Aapico Hitech Plc (AH), said the company's financial results improved in the quarter to June from those in the first quarter, keeping the first-half results in line with its projection.
AH, which produces a variety of auto parts including chassis and door frames for leading automakers such as Toyota,Isuzu, and Nissan, is scheduled to report second-quarter results tomorrow.
The company has reaffirmed its forecast that revenue would fall 20-25% this year from 2008 on estimates that overall car sales will decrease from 1.4 million units to 1.1 million, he said.
"Vehicle sales are improving monthon-month, prompting us to believe that AH and the automotive parts industry in general would perform better in the second half," noted Mr Yeap.
He added that AH in October would begin supplying parts to Ford Motor's new compact passenger vehicle B-car production in Rayong. Therefore, more revenue is expected in the final quarter.
AH's two new factories in Rayong have been operated for the manufacturing of plastic fuel tanks, press parts and door sets for Ford's new model, of which a few thousand units are expected to roll out this year from the maximum capacity of 100,000 units a year.
Analysts also viewed auto-parts suppliers would find bottom in the second half with higher capacity utilisation expected for the passenger car segment in the current quarter.
"Better prospects should be seen in the second half. Vehicle production,which fell 40% year-on-year in the first half, should be slightly better with an expected 30% annualised drop in the latter half," said Reweenuch Piyakriengkai, an analyst at KGI Securities.
Earnings of SET-listed Somboon Advance Technology Plc (SAT) should weaken further in the second half but better results are expected in the latter half with more orders for re-stocking and from Kubota, according to KGI.
Analysts said SAT aimed to gain 220 million baht this year from Kubota, the agricultural vehicle maker. Of the amount,100 million would be realised in the fourth quarter. The company's net profit was worse than expected, falling by 86% year-on-year to 25 million baht in the first quarter with sales sliding 33% to 936 million baht.
SAT capacity utilisation rate slipped from 50% in the first quarter to 48% in the past quarter, typically the weak season for car sales with long holidays.
KGI also predicts that a sharp V-shaped recovery is unlikely for the auto sector.
Kiatnakin Securities has lifted its recommended price of AH from 2.64 baht to 4.28 baht on the expected rebound of the automotive industry in the second half. The bankruptcy of General Motors would increase the sales of Japanese automakers, the major buyers of listed automotive parts companies. Therefore,local parts stocks would benefit.
Sales of AH closed on Tuesday on the Stock Exchange of Thailand at 5.70 baht,up 45 satang, while SAT rose 15 satang to 7.70 baht.
Yeap Swee Chuan, chairman of SETlisted Aapico Hitech Plc (AH), said the company's financial results improved in the quarter to June from those in the first quarter, keeping the first-half results in line with its projection.
AH, which produces a variety of auto parts including chassis and door frames for leading automakers such as Toyota,Isuzu, and Nissan, is scheduled to report second-quarter results tomorrow.
The company has reaffirmed its forecast that revenue would fall 20-25% this year from 2008 on estimates that overall car sales will decrease from 1.4 million units to 1.1 million, he said.
"Vehicle sales are improving monthon-month, prompting us to believe that AH and the automotive parts industry in general would perform better in the second half," noted Mr Yeap.
He added that AH in October would begin supplying parts to Ford Motor's new compact passenger vehicle B-car production in Rayong. Therefore, more revenue is expected in the final quarter.
AH's two new factories in Rayong have been operated for the manufacturing of plastic fuel tanks, press parts and door sets for Ford's new model, of which a few thousand units are expected to roll out this year from the maximum capacity of 100,000 units a year.
Analysts also viewed auto-parts suppliers would find bottom in the second half with higher capacity utilisation expected for the passenger car segment in the current quarter.
"Better prospects should be seen in the second half. Vehicle production,which fell 40% year-on-year in the first half, should be slightly better with an expected 30% annualised drop in the latter half," said Reweenuch Piyakriengkai, an analyst at KGI Securities.
Earnings of SET-listed Somboon Advance Technology Plc (SAT) should weaken further in the second half but better results are expected in the latter half with more orders for re-stocking and from Kubota, according to KGI.
Analysts said SAT aimed to gain 220 million baht this year from Kubota, the agricultural vehicle maker. Of the amount,100 million would be realised in the fourth quarter. The company's net profit was worse than expected, falling by 86% year-on-year to 25 million baht in the first quarter with sales sliding 33% to 936 million baht.
SAT capacity utilisation rate slipped from 50% in the first quarter to 48% in the past quarter, typically the weak season for car sales with long holidays.
KGI also predicts that a sharp V-shaped recovery is unlikely for the auto sector.
Kiatnakin Securities has lifted its recommended price of AH from 2.64 baht to 4.28 baht on the expected rebound of the automotive industry in the second half. The bankruptcy of General Motors would increase the sales of Japanese automakers, the major buyers of listed automotive parts companies. Therefore,local parts stocks would benefit.
Sales of AH closed on Tuesday on the Stock Exchange of Thailand at 5.70 baht,up 45 satang, while SAT rose 15 satang to 7.70 baht.
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