A Thai-owned auto parts distributor in the United States will join with Thai aftermarket auto-parts producers to set up a holding company worth 1 billion baht to purchase 30 auto repair centres in the US within two years.
The move is part of a strategy by the Cluster of Thai Automotive Parts to expand its members' markets to improve industry performance when local demand is weak because of the slump in vehicle sales and production.
"We have been trying to enter the US market for more than 10 years, but were unsuccessful because we didn't use the right channels," said Samart Deebhijarn, the president of the cluster.
"But the current strategy, through signing a memorandum of understanding to distribute local products to a US parts distributor and to invest in garages there would help us access the US market better."
He said that owning garages would also give Thai producers a better understanding of US parts customers.
Cluster members visited the US last week on a mission that also included representatives of the Thailand Trade Representative (TTR) Office, Thailand Automotive Institute and the SME Bank.
The memorandum calls for cluster members to supply parts to US-based Autotech Engineering Co, one of the largest auto parts distributors in Los Angeles, owned by a Thai businessman.
The new company would have to purchase 500 million baht worth of Thai auto parts within one year,3 billion baht within five years and 15 billion within the next decade, said Vachara Phanchet, the Thailand Trade Representative.
Establishing a holding company would raise 1 billion baht from members of the cluster and Autotech Engineering Co to buy 30 garages within the next two years. This should generate parts sale and service income worth 3 billion baht by 2012 to the new firm.
Vallop Tiasiri, director of the Thailand Automotive Institute, said more American drivers are repairing their cars to keep them in service longer in the downturn, creating opportunities for aftermarket parts makers.
Vichaya Vitheethum, executive director of the SME Bank, said the market size in the US and the weak dollar also offered opportunities for Thai parts producers.
The bank is working out measures to support establishing the holding company. Its board is also considering changing its collateral regulations to promote Thai investment overseas.
"We used to allow overseas collateral to be used as guarantees for our lending to overseas business, but we faced problems estimating asset value so the system was scrapped. But the board is reconsidering this model in order to promote local business to invest overseas," Mr Vichaya said.
The TTR, meanwhile, is preparing to adopt similar strategies to promote access to other markets such as Germany, Australia and the Middle East.
"These markets use a lot of Asian cars form which our parts are applicable. Similar strategies such as overseas investment to win distribution channels will also be applied to promote other industries such as processed food,"Mr Vachara said.
Wednesday, October 28, 2009
Magnificent seven
In the most important, most revered event since the invention of the brontosaurus trap,Microsoft shipped the most incredibly fabulous operating system ever made; the release of Windows 7 also spurred a new generation of personal computers of all sizes at prices well below last month's offers.The top reason Windows 7 does not suck: There is no registered website called Windows7Sucks.com
Kindle e-book reader maker Amazon.com and new Nook e-book reader vendor Barnes and Noble got it on; B&N got great reviews for the "Kindle killer"Nook, with dual screens and touch controls so you can "turn" pages, plays MP3s and allows many non-B&N book formats, although not the Kindle one;Amazon then killed the US version of its Kindle in favour of the international one, reduced its price to $260(8,700 baht), same as the Nook; it's not yet clear what you can get in Thailand with a Nook, but you sure can't (yet) get much, relatively speaking, with a Kindle;but here's the biggest difference so far,which Amazon.com has ignored: the Nook lets you lend e-books to any other Nook owner, just as if they were paper books; the borrowed books expire on the borrower's Nook in two weeks.
Phone maker Nokia of Finland announced it is suing iPhone maker Apple of America for being a copycat; lawyers said they figure Nokia can get at least one, probably two per cent (retail) for every iPhone sold by Steve "President for Life" Jobs and crew via the lawsuit,which sure beats working for it -$6 (200 baht) to $12(400 baht) on 30 million phones sold so far, works out to $400 million or 25 percent of the whole Apple empire profits during the last quarter;there were 10 patent thefts, the Finnish executives said, on everything from moving data to security and encryption.
Nokia of Finland announced that it is one month behind on shipping its new flagship N900 phone, the first to run on Linux software; delay of the $750(25,000 baht) phone had absolutely no part in making Nokia so short that it had to sue Apple, slap yourself for such a thought.
Tim Berners-Lee, who created the World Wide Web, said he had one regret:the double slash that follows the "http:"in standard web addresses; he estimated that 14.2 gazillion users have wasted 48.72 bazillion hours typing those two keystrokes, and he's sorry; of course there's no reason to ever type that, since your browser does it for you when you type "www.bangkokpost.com" but Tim needs to admit he made one error in his lifetime.
The International Telecommunication Union of the United Nations, which doesn't sell any phones or services, announced that there should be a mobile phone charger that will work with any phone; now who would ever have thought of that, without a UN body to wind up a major study on the subject?;the GSM Association estimates that 51,000 tonnes of chargers are made each year in order to keep companies able to have their own unique ones.
The Well, Doh Award of the Week was presented at arm's length to the United Nations Conference on Trade and Development; the group's deputy secretary-general Petko Draganov said that developing countries will miss some of the stuff available on the Internet if they don't install more broadband infrastructure; a report that used your tax baht to compile said that quite a few people use mobile phones but companies are more likely to invest in countries with excellent broadband connections; no one ever had thought of this before, right?
Sun Microsystems , as a result of the Oracle takeover, said it will allow 3,000 current workers never to bother coming to work again; Sun referred to the losses as "jobs," not people; now the fourth largest server maker in the world, Sun said it lost $2.2 billion in its last fiscal year; European regulators are holding up approval of the Oracle purchase in the hope of getting some money in exchange for not involving Oracle in court cases.
The multi-gazillionaire and very annoying investor Carl Icahn resigned from the board at Yahoo ; he spun it as a vote of confidence, saying current directors are taking the formerly threatened company seriously; Yahoo reported increased profits but smaller revenues in the third quarter.
The US House of Representatives voted to censure Vietnam for jailing bloggers; the non-binding resolution sponsored by southern California congresswoman Loretta Sanchez said the Internet is "a crucial tool for the citizens of Vietnam to be able to exercise their freedom of expression and association;"Hanoi has recently jailed at least nine activists for up to six years apiece for holding pro-democracy banners. Iran jailed blogger Hossein "Hoder" Derakshan for 10 months - in solitary confinement.
Kindle e-book reader maker Amazon.com and new Nook e-book reader vendor Barnes and Noble got it on; B&N got great reviews for the "Kindle killer"Nook, with dual screens and touch controls so you can "turn" pages, plays MP3s and allows many non-B&N book formats, although not the Kindle one;Amazon then killed the US version of its Kindle in favour of the international one, reduced its price to $260(8,700 baht), same as the Nook; it's not yet clear what you can get in Thailand with a Nook, but you sure can't (yet) get much, relatively speaking, with a Kindle;but here's the biggest difference so far,which Amazon.com has ignored: the Nook lets you lend e-books to any other Nook owner, just as if they were paper books; the borrowed books expire on the borrower's Nook in two weeks.
Phone maker Nokia of Finland announced it is suing iPhone maker Apple of America for being a copycat; lawyers said they figure Nokia can get at least one, probably two per cent (retail) for every iPhone sold by Steve "President for Life" Jobs and crew via the lawsuit,which sure beats working for it -$6 (200 baht) to $12(400 baht) on 30 million phones sold so far, works out to $400 million or 25 percent of the whole Apple empire profits during the last quarter;there were 10 patent thefts, the Finnish executives said, on everything from moving data to security and encryption.
Nokia of Finland announced that it is one month behind on shipping its new flagship N900 phone, the first to run on Linux software; delay of the $750(25,000 baht) phone had absolutely no part in making Nokia so short that it had to sue Apple, slap yourself for such a thought.
Tim Berners-Lee, who created the World Wide Web, said he had one regret:the double slash that follows the "http:"in standard web addresses; he estimated that 14.2 gazillion users have wasted 48.72 bazillion hours typing those two keystrokes, and he's sorry; of course there's no reason to ever type that, since your browser does it for you when you type "www.bangkokpost.com" but Tim needs to admit he made one error in his lifetime.
The International Telecommunication Union of the United Nations, which doesn't sell any phones or services, announced that there should be a mobile phone charger that will work with any phone; now who would ever have thought of that, without a UN body to wind up a major study on the subject?;the GSM Association estimates that 51,000 tonnes of chargers are made each year in order to keep companies able to have their own unique ones.
The Well, Doh Award of the Week was presented at arm's length to the United Nations Conference on Trade and Development; the group's deputy secretary-general Petko Draganov said that developing countries will miss some of the stuff available on the Internet if they don't install more broadband infrastructure; a report that used your tax baht to compile said that quite a few people use mobile phones but companies are more likely to invest in countries with excellent broadband connections; no one ever had thought of this before, right?
Sun Microsystems , as a result of the Oracle takeover, said it will allow 3,000 current workers never to bother coming to work again; Sun referred to the losses as "jobs," not people; now the fourth largest server maker in the world, Sun said it lost $2.2 billion in its last fiscal year; European regulators are holding up approval of the Oracle purchase in the hope of getting some money in exchange for not involving Oracle in court cases.
The multi-gazillionaire and very annoying investor Carl Icahn resigned from the board at Yahoo ; he spun it as a vote of confidence, saying current directors are taking the formerly threatened company seriously; Yahoo reported increased profits but smaller revenues in the third quarter.
The US House of Representatives voted to censure Vietnam for jailing bloggers; the non-binding resolution sponsored by southern California congresswoman Loretta Sanchez said the Internet is "a crucial tool for the citizens of Vietnam to be able to exercise their freedom of expression and association;"Hanoi has recently jailed at least nine activists for up to six years apiece for holding pro-democracy banners. Iran jailed blogger Hossein "Hoder" Derakshan for 10 months - in solitary confinement.
Belgian triggers drift
The target is Belgium national Benoit Henry, a major player at Continental AG's tyre division.And depending on whether he cooperates or not,Motoring contemplates using methods employed by Counter Terrorist Unit agent Jack Bauer to extract market share and sales volume information deemed critical in delivering this story.
By the way, Henry is vice-president marketing &sales for Asia and CEO of Continental Sime Tyre, the latter being the Malaysia-based production arm of Continental for Asia-Pacific... just in case you thought this was some cloak and dagger thriller.
You see, getting tyre makers to actually divulge their sales volume or market-share figures is on par with agent Bauer breaking a terrorist in the 24 television series.
Stepping out of my reverie I shake hands with the 47-year-old executive who looks more the part of a GQ magazine model than a manager of Continental's tyre factories in Alor Setang and Petaling Jaya, in addition to heading marketing and sales teams in all AsiaPacific markets.
So I suggested that the reasons for being tightlipped about market statistics perhaps stem from the notion that tyre makers are evading taxes, concerned about becoming a benchmark for their competition,or simply being humble!
"No. It's not correct. The game we are in is a technology game. Others are playing catch up with us.
"Our volume is Asia is still small, especially the knowledge of the Thai tyre market is limited which is why we need to get to know and grow our business here," he says.
Continental claims that some markets offer transparent information on tyre sales in the form of national statistics, while some markets do not.
"I don't know the exact numbers for Thailand, but it's about six million tyres in the replacement market.
"Numbers are not everything. It's the image. Volume is only one element, and profit is the key. High performance tyres [sold in small volumes] can be good profit makers."
Continental AG recently invested 200 million baht on a Thai sales and marketing unit to step up its presence here and perhaps send a clear message to the market.
"It [message] has nothing to do with 200 million baht. We want to grow in our own way, in both the OEM and high performance tyre segments, build a quality network with products, products and products."
Analysts have suggested the current dealership network operated by tyre distributor Stamford Tyres will eventually be phased out, and there'll be a gradual relegation of small independent distributors to megadealers or regular dealerships, just as most automakers are stepping up their Thai presence with investments in production facilities.
But Henry was quick to point out the Stamford network was here to stay, while Continental's new network will multiply tyre sales.
"We have a long relationship with Stamford. No conflict, no cannibalising. The sea is still full of fish."
The picture of Continental's tyre dealership network in Thailand isn't clear for the time being. So, why this sudden urge or commitment to Thailand?
"Thailand is a market that cannot be ignored. We are late, but Thailand is the centre of the automotive industry in the region and that is why we are here."
Continental is no slouch in the global arena as it is the world's fourth-largest tyre maker and the number one brand in Europe.
"In Thailand we expect to take 5% market share in three years. The major brands like Bridgestone and Goodyear won't give their business easily."
Thailand's annual tyre market is estimated at six million replacement tyres and one million truck tyres;Continental expects to sell about 350,000 tyres in the next three years.
Falling short of a confirmation, Henry did imply that Thailand was a strong candidate for Continental's tyre production expansion.
"Our three plants in Asia-Pacific are not sufficient,and where next? The rule of thumb is that we follow our OEM customers."
As mentioned earlier, Thailand is the regional hub for automotive export production and the largest onetonne pick-up truck market in the world; hence it is home to an abundance of OEM players.
Someone informed the writer that Henry had 30
minutes to make it from Centara Hotel on Rajprasong to Soi Asoke off Sukhumvit Road; Henry's appointment was with none other than the outspoken Henk Kiks of B-Quik Thailand, a bonafide Horatio Alger story in the local tyre and automotive quick-fix industry.
By the way, Henry is vice-president marketing &sales for Asia and CEO of Continental Sime Tyre, the latter being the Malaysia-based production arm of Continental for Asia-Pacific... just in case you thought this was some cloak and dagger thriller.
You see, getting tyre makers to actually divulge their sales volume or market-share figures is on par with agent Bauer breaking a terrorist in the 24 television series.
Stepping out of my reverie I shake hands with the 47-year-old executive who looks more the part of a GQ magazine model than a manager of Continental's tyre factories in Alor Setang and Petaling Jaya, in addition to heading marketing and sales teams in all AsiaPacific markets.
So I suggested that the reasons for being tightlipped about market statistics perhaps stem from the notion that tyre makers are evading taxes, concerned about becoming a benchmark for their competition,or simply being humble!
"No. It's not correct. The game we are in is a technology game. Others are playing catch up with us.
"Our volume is Asia is still small, especially the knowledge of the Thai tyre market is limited which is why we need to get to know and grow our business here," he says.
Continental claims that some markets offer transparent information on tyre sales in the form of national statistics, while some markets do not.
"I don't know the exact numbers for Thailand, but it's about six million tyres in the replacement market.
"Numbers are not everything. It's the image. Volume is only one element, and profit is the key. High performance tyres [sold in small volumes] can be good profit makers."
Continental AG recently invested 200 million baht on a Thai sales and marketing unit to step up its presence here and perhaps send a clear message to the market.
"It [message] has nothing to do with 200 million baht. We want to grow in our own way, in both the OEM and high performance tyre segments, build a quality network with products, products and products."
Analysts have suggested the current dealership network operated by tyre distributor Stamford Tyres will eventually be phased out, and there'll be a gradual relegation of small independent distributors to megadealers or regular dealerships, just as most automakers are stepping up their Thai presence with investments in production facilities.
But Henry was quick to point out the Stamford network was here to stay, while Continental's new network will multiply tyre sales.
"We have a long relationship with Stamford. No conflict, no cannibalising. The sea is still full of fish."
The picture of Continental's tyre dealership network in Thailand isn't clear for the time being. So, why this sudden urge or commitment to Thailand?
"Thailand is a market that cannot be ignored. We are late, but Thailand is the centre of the automotive industry in the region and that is why we are here."
Continental is no slouch in the global arena as it is the world's fourth-largest tyre maker and the number one brand in Europe.
"In Thailand we expect to take 5% market share in three years. The major brands like Bridgestone and Goodyear won't give their business easily."
Thailand's annual tyre market is estimated at six million replacement tyres and one million truck tyres;Continental expects to sell about 350,000 tyres in the next three years.
Falling short of a confirmation, Henry did imply that Thailand was a strong candidate for Continental's tyre production expansion.
"Our three plants in Asia-Pacific are not sufficient,and where next? The rule of thumb is that we follow our OEM customers."
As mentioned earlier, Thailand is the regional hub for automotive export production and the largest onetonne pick-up truck market in the world; hence it is home to an abundance of OEM players.
Someone informed the writer that Henry had 30
minutes to make it from Centara Hotel on Rajprasong to Soi Asoke off Sukhumvit Road; Henry's appointment was with none other than the outspoken Henk Kiks of B-Quik Thailand, a bonafide Horatio Alger story in the local tyre and automotive quick-fix industry.
Tuesday, October 20, 2009
Under-pressure battery-makers seek price increases of 10-15 per cent
Unable to shoulder higher production costs, battery producers have sought the government's approval to raise retail prices by 10 to 15 per cent despite the current price-freeze policy.
Yanyong Phuangrach, permanent secretary of the Commerce Ministry, said car-battery producers had called for the ministry to approve an increase in the retail price soon, as they face higher costs of production. A letter submitted by the makers said they wanted to hike retail prices by 10 to 15 per cent as copper prices have risen by 50 per cent from Bt4,000 to Bt6,000 in the past few months.
Now, the retail price of an N70 battery is between Bt2,200 and Bt2,300. If the government approved a price increase, the retail price would be quoted at Bt2,420 to Bt2,530.
However, Yanyong said, the ministry would try to persuade producers to cooperate and retain the current retail prices until the end of the year in line with the government's policy to freeze consumer-goods prices.
In addition, the retail price of steel is set to soar following an increase in the cost of billet from US$400 (Bt13.300) a tonne to $500 to $600 in the past year.
Meanwhile, the Commerce Ministry will today ask for the National Rice Policy committee's approval to open pledging for 2 million tonnes of rice to help farmers, whose income has fallen.
The measure is aimed at boosting the market rice price, which has dropped in the past month as the harvest season has increased supply, said Commerce Minister Porntiva Nakasai.
Also, the collapse of five banks in Africa has resulted in lower purchasing orders from African countries. This has caused Thai exporters to delay purchasing rice from the market and a drop in rice prices.
The pledging scheme is one of six government measures to stabilise the rice price. The committee must also address the problem of farmers being unable to participate in the rice-pledging scheme because of a delay on the part of the government in completing its list of registered farmers.
Yanyong Phuangrach, permanent secretary of the Commerce Ministry, said car-battery producers had called for the ministry to approve an increase in the retail price soon, as they face higher costs of production. A letter submitted by the makers said they wanted to hike retail prices by 10 to 15 per cent as copper prices have risen by 50 per cent from Bt4,000 to Bt6,000 in the past few months.
Now, the retail price of an N70 battery is between Bt2,200 and Bt2,300. If the government approved a price increase, the retail price would be quoted at Bt2,420 to Bt2,530.
However, Yanyong said, the ministry would try to persuade producers to cooperate and retain the current retail prices until the end of the year in line with the government's policy to freeze consumer-goods prices.
In addition, the retail price of steel is set to soar following an increase in the cost of billet from US$400 (Bt13.300) a tonne to $500 to $600 in the past year.
Meanwhile, the Commerce Ministry will today ask for the National Rice Policy committee's approval to open pledging for 2 million tonnes of rice to help farmers, whose income has fallen.
The measure is aimed at boosting the market rice price, which has dropped in the past month as the harvest season has increased supply, said Commerce Minister Porntiva Nakasai.
Also, the collapse of five banks in Africa has resulted in lower purchasing orders from African countries. This has caused Thai exporters to delay purchasing rice from the market and a drop in rice prices.
The pledging scheme is one of six government measures to stabilise the rice price. The committee must also address the problem of farmers being unable to participate in the rice-pledging scheme because of a delay on the part of the government in completing its list of registered farmers.
Wednesday, October 14, 2009
California locks out drunk drivers
Californians convicted of drunk driving will be required to install electronic breath-analysis devices that prevent their cars from being started if they have consumed alcohol.
The measure has been signed into law by Governor Arnold Schwarzenegger and will initially take effect in a pilojt scheme in four counties.
The "ignition-tnterlock devices" will prevent cars from being started if the driver's breath shows more than a small amount of alcohol.
"We must do everything we can to ensure the public's safety on the road,"Schwarzenegger said. "By installing ignition-interlock devices, we are working to save innocent lives."
California reported 1,355 frunk-driving fatalities last year. An estimated 550 drunk drivers are arrested every day.
The measure has been signed into law by Governor Arnold Schwarzenegger and will initially take effect in a pilojt scheme in four counties.
The "ignition-tnterlock devices" will prevent cars from being started if the driver's breath shows more than a small amount of alcohol.
"We must do everything we can to ensure the public's safety on the road,"Schwarzenegger said. "By installing ignition-interlock devices, we are working to save innocent lives."
California reported 1,355 frunk-driving fatalities last year. An estimated 550 drunk drivers are arrested every day.
Sunday, October 11, 2009
Goodyear switches focus to Autocare
Goodyear Thailand has stopped expanding its Eagle stores, instead promoting Autocare, its new one-stop outlet for tyre and maintenance services, says managing director Kongkiat Teekamongkol.
The first Autocare outlet was opened at Om Yai in Nakhon Pathom on Sept 25 by Goodyear's largest dealer, who formerly ran an Eagle store.
The facility will serve northwest Bangkok with a modern retail look, vehicle maintenance services, and a variety of products, including tyres, oil and batteries. Services will include oil and battery changes, suspension service, tyre rotation, replacement and repair, wheel balancing and alignment.
"We're selling 3,000 tyres per month at this first outlet," said Mr Kongkiat.
About eight to 10 outlets will be opened by the end of this year and another 20 to 30 are planned for next year. Each new outlet needs at least 3 million baht in tools and equipment, excluding building and land costs.
"We've turned to Autocare because we wanted to freshen up the Goodyear service centres and give customers the impression that other maintenance services are provided in addition to tyre changing," said Mr Kongkiat.
Goodyear welcomes existing dealers replacing Eagle stores with Autocare if they upgrade their outlets for a more contemporary look and service standard.New investors are also welcome.
Goodyear provides expertise and software to help franchisees manage their businesses, sustain service quality and efficiency, achieve logistical efficiency and make a profit.
"Autocare is a major part of our growth strategy. Through this world-class service network, we provide greater convenience and access to Goodyear products," he said.
Autocare is already highly successful in Australia and Malaysia.
The first Eagle store was opened in 2000 and there are now 65 Eagle locations throughout Thailand.
A company source said Goodyear was not spurning Eagle stores because they did not perform, but rather the proven success of Autocare in Australia, Malaysia and the Philippines encouraged it to introduce the new franchise in Thailand.
All Autocare outlets will be standardised, meaning that facilities will have the same shop design and offerings to increase brand visibility, convenience for customers and customer loyalty.
The Autocare outlets will also help Eagle dealers earn more from providing other maintenance services apart from tyre changes.
Autocare dealers will also have access to training modules to help them understand the business process, service standards, report analysis, technical assessment, tyres and rims, and other automotive technology.
The first Autocare outlet was opened at Om Yai in Nakhon Pathom on Sept 25 by Goodyear's largest dealer, who formerly ran an Eagle store.
The facility will serve northwest Bangkok with a modern retail look, vehicle maintenance services, and a variety of products, including tyres, oil and batteries. Services will include oil and battery changes, suspension service, tyre rotation, replacement and repair, wheel balancing and alignment.
"We're selling 3,000 tyres per month at this first outlet," said Mr Kongkiat.
About eight to 10 outlets will be opened by the end of this year and another 20 to 30 are planned for next year. Each new outlet needs at least 3 million baht in tools and equipment, excluding building and land costs.
"We've turned to Autocare because we wanted to freshen up the Goodyear service centres and give customers the impression that other maintenance services are provided in addition to tyre changing," said Mr Kongkiat.
Goodyear welcomes existing dealers replacing Eagle stores with Autocare if they upgrade their outlets for a more contemporary look and service standard.New investors are also welcome.
Goodyear provides expertise and software to help franchisees manage their businesses, sustain service quality and efficiency, achieve logistical efficiency and make a profit.
"Autocare is a major part of our growth strategy. Through this world-class service network, we provide greater convenience and access to Goodyear products," he said.
Autocare is already highly successful in Australia and Malaysia.
The first Eagle store was opened in 2000 and there are now 65 Eagle locations throughout Thailand.
A company source said Goodyear was not spurning Eagle stores because they did not perform, but rather the proven success of Autocare in Australia, Malaysia and the Philippines encouraged it to introduce the new franchise in Thailand.
All Autocare outlets will be standardised, meaning that facilities will have the same shop design and offerings to increase brand visibility, convenience for customers and customer loyalty.
The Autocare outlets will also help Eagle dealers earn more from providing other maintenance services apart from tyre changes.
Autocare dealers will also have access to training modules to help them understand the business process, service standards, report analysis, technical assessment, tyres and rims, and other automotive technology.
Wednesday, October 7, 2009
Delphi is out of bankruptcy
The US auto parts maker Delphi ended four years in bankruptcy on Tuesday, emerging from Chapter 11 as a private company and removing a major uncertainty for former parent General Motors Co.
Delphi, which filed for bankruptcy on October 8,2005, cut thousands of workers, divested several businesses and agreed to sell its steering systems operations and four plants back to GM for the reorganisation.
The parts maker's emergence from bankruptcy was executed through a sale of most of its assets to Delphi Holdings LLP, which is led by senior creditors Elliott Management Corp and Silver Point Capital LP.
"Rodney O'Neal remains chief ex-ecutive officer of Delphi and the leadership remains in place," Delphi said in a statement.
The group acquiring the now much smaller Delphi has agreed to forgive nearly $3.5 billion of bankruptcy loans it bought from previous bankruptcy lenders, and will invest $900 million in capital in the company.
Other parts of the company will be sold back to GM and the rest will be liquidated under the plan approved by a US Bankruptcy Court judge in July.The transaction has pending regulatory approvals in Russia and South Africa.
O'Neal said in a statement that postbankruptcy Delphi would be "a more agile, nimble and resilient company."
"We expect that the industry and the competitive environment will continue to be demanding, but the restructuring we have already completed creates a strong platform and we expect to capitalise on that," he said.
GM said it would create two subsidiaries for the re-acquired Delphi businesses, one for the steering business and a separate one for the other four plants.
"We're pleased to see a final resolution to the bankruptcy and wish the newly emerged Delphi success," GM chief executive Fritz Henderson said in a statement.
Delphi, which once made a very broad array of auto parts, will narrow it to electronic and safety components;powertrain; thermal; electrical and electronic systems; automaker services; and parts for the independent replacement market.
The largest US auto parts supplier when it filed for bankruptcy, Delphi succumbed to high costs for wages and legacy benefits inherited in its spin-off from GM in 1999 along with low- or nomargin business.
Delphi stunned the US auto industry by filing for bankruptcy after negotiations broke down with GM and the United Auto Workers union over supply and labour agreements. It remains the largest bankruptcy for a US auto parts supplier.
The parts maker, once the biggest in North America, now ranks third behind Magna International and Johnson Controls Inc.
The auto parts sector stayed under pressure after Delphi's bankruptcy. The credit market collapse in September 2008 and resulting drop in US auto sales and production added to the squeeze on supplier finances and led to more bankruptcies.
Under the deal approved in July, GM,which has already taken over $11 billion in charges for Delphi's restructuring,will assume $1.1 billion in Delphi's obligations and waive $2.15 billion in its own claims against the supplier.
GM also plans to invest $1.75 billion and to provide Delphi with loans. A complete failure of Delphi could have forced a near total shutdown of GM production in short order, choking off revenue as the automaker relaunches its own company.
Delphi reached agreements with its unions and resolved pension funding during the bankruptcy as well.
Delphi, which filed for bankruptcy on October 8,2005, cut thousands of workers, divested several businesses and agreed to sell its steering systems operations and four plants back to GM for the reorganisation.
The parts maker's emergence from bankruptcy was executed through a sale of most of its assets to Delphi Holdings LLP, which is led by senior creditors Elliott Management Corp and Silver Point Capital LP.
"Rodney O'Neal remains chief ex-ecutive officer of Delphi and the leadership remains in place," Delphi said in a statement.
The group acquiring the now much smaller Delphi has agreed to forgive nearly $3.5 billion of bankruptcy loans it bought from previous bankruptcy lenders, and will invest $900 million in capital in the company.
Other parts of the company will be sold back to GM and the rest will be liquidated under the plan approved by a US Bankruptcy Court judge in July.The transaction has pending regulatory approvals in Russia and South Africa.
O'Neal said in a statement that postbankruptcy Delphi would be "a more agile, nimble and resilient company."
"We expect that the industry and the competitive environment will continue to be demanding, but the restructuring we have already completed creates a strong platform and we expect to capitalise on that," he said.
GM said it would create two subsidiaries for the re-acquired Delphi businesses, one for the steering business and a separate one for the other four plants.
"We're pleased to see a final resolution to the bankruptcy and wish the newly emerged Delphi success," GM chief executive Fritz Henderson said in a statement.
Delphi, which once made a very broad array of auto parts, will narrow it to electronic and safety components;powertrain; thermal; electrical and electronic systems; automaker services; and parts for the independent replacement market.
The largest US auto parts supplier when it filed for bankruptcy, Delphi succumbed to high costs for wages and legacy benefits inherited in its spin-off from GM in 1999 along with low- or nomargin business.
Delphi stunned the US auto industry by filing for bankruptcy after negotiations broke down with GM and the United Auto Workers union over supply and labour agreements. It remains the largest bankruptcy for a US auto parts supplier.
The parts maker, once the biggest in North America, now ranks third behind Magna International and Johnson Controls Inc.
The auto parts sector stayed under pressure after Delphi's bankruptcy. The credit market collapse in September 2008 and resulting drop in US auto sales and production added to the squeeze on supplier finances and led to more bankruptcies.
Under the deal approved in July, GM,which has already taken over $11 billion in charges for Delphi's restructuring,will assume $1.1 billion in Delphi's obligations and waive $2.15 billion in its own claims against the supplier.
GM also plans to invest $1.75 billion and to provide Delphi with loans. A complete failure of Delphi could have forced a near total shutdown of GM production in short order, choking off revenue as the automaker relaunches its own company.
Delphi reached agreements with its unions and resolved pension funding during the bankruptcy as well.
Friday, October 2, 2009
Belgian triggers drift
The target is Belgium national Benoit Henry, a major player at Continental AG's tyre division.And depending on whether he cooperates or not,Motoring contemplates using methods employed by Counter Terrorist Unit agent Jack Bauer to extract market share and sales volume information deemed critical in delivering this story.
By the way, Henry is vice-president marketing &sales for Asia and CEO of Continental Sime Tyre, the latter being the Malaysia-based production arm of Continental for Asia-Pacific... just in case you thought this was some cloak and dagger thriller.
You see, getting tyre makers to actually divulge their sales volume or market-share figures is on par with agent Bauer breaking a terrorist in the 24 television series.
Stepping out of my reverie I shake hands with the 47-year-old executive who looks more the part of a GQ magazine model than a manager of Continental's tyre factories in Alor Setang and Petaling Jaya, in addition to heading marketing and sales teams in all AsiaPacific markets.
So I suggested that the reasons for being tightlipped about market statistics perhaps stem from the notion that tyre makers are evading taxes, concerned about becoming a benchmark for their competition,or simply being humble!
"No. It's not correct. The game we are in is a technology game. Others are playing catch up with us.
"Our volume is Asia is still small, especially the knowledge of the Thai tyre market is limited which is why we need to get to know and grow our business here," he says.
Continental claims that some markets offer transparent information on tyre sales in the form of national statistics, while some markets do not.
"I don't know the exact numbers for Thailand, but it's about six million tyres in the replacement market.
"Numbers are not everything. It's the image. Volume is only one element, and profit is the key. High performance tyres [sold in small volumes] can be good profit makers."
Continental AG recently invested 200 million baht on a Thai sales and marketing unit to step up its presence here and perhaps send a clear message to the market.
"It [message] has nothing to do with 200 million baht. We want to grow in our own way, in both the OEM and high performance tyre segments, build a quality network with products, products and products."
Analysts have suggested the current dealership network operated by tyre distributor Stamford Tyres will eventually be phased out, and there'll be a gradual relegation of small independent distributors to megadealers or regular dealerships, just as most automakers are stepping up their Thai presence with investments in production facilities.
But Henry was quick to point out the Stamford network was here to stay, while Continental's new network will multiply tyre sales.
"We have a long relationship with Stamford. No conflict, no cannibalising. The sea is still full of fish."
The picture of Continental's tyre dealership network in Thailand isn't clear for the time being. So, why this sudden urge or commitment to Thailand?
"Thailand is a market that cannot be ignored. We are late, but Thailand is the centre of the automotive industry in the region and that is why we are here."
Continental is no slouch in the global arena as it is the world's fourth-largest tyre maker and the number one brand in Europe.
"In Thailand we expect to take 5% market share in three years. The major brands like Bridgestone and Goodyear won't give their business easily."
Thailand's annual tyre market is estimated at six million replacement tyres and one million truck tyres;Continental expects to sell about 350,000 tyres in the next three years.
Falling short of a confirmation, Henry did imply that Thailand was a strong candidate for Continental's tyre production expansion.
"Our three plants in Asia-Pacific are not sufficient,and where next? The rule of thumb is that we follow our OEM customers."
As mentioned earlier, Thailand is the regional hub for automotive export production and the largest onetonne pick-up truck market in the world; hence it is home to an abundance of OEM players.
Someone informed the writer that Henry had 30
minutes to make it from Centara Hotel on Rajprasong to Soi Asoke off Sukhumvit Road; Henry's appointment was with none other than the outspoken Henk Kiks of B-Quik Thailand, a bonafide Horatio Alger story in the local tyre and automotive quick-fix industry.
By the way, Henry is vice-president marketing &sales for Asia and CEO of Continental Sime Tyre, the latter being the Malaysia-based production arm of Continental for Asia-Pacific... just in case you thought this was some cloak and dagger thriller.
You see, getting tyre makers to actually divulge their sales volume or market-share figures is on par with agent Bauer breaking a terrorist in the 24 television series.
Stepping out of my reverie I shake hands with the 47-year-old executive who looks more the part of a GQ magazine model than a manager of Continental's tyre factories in Alor Setang and Petaling Jaya, in addition to heading marketing and sales teams in all AsiaPacific markets.
So I suggested that the reasons for being tightlipped about market statistics perhaps stem from the notion that tyre makers are evading taxes, concerned about becoming a benchmark for their competition,or simply being humble!
"No. It's not correct. The game we are in is a technology game. Others are playing catch up with us.
"Our volume is Asia is still small, especially the knowledge of the Thai tyre market is limited which is why we need to get to know and grow our business here," he says.
Continental claims that some markets offer transparent information on tyre sales in the form of national statistics, while some markets do not.
"I don't know the exact numbers for Thailand, but it's about six million tyres in the replacement market.
"Numbers are not everything. It's the image. Volume is only one element, and profit is the key. High performance tyres [sold in small volumes] can be good profit makers."
Continental AG recently invested 200 million baht on a Thai sales and marketing unit to step up its presence here and perhaps send a clear message to the market.
"It [message] has nothing to do with 200 million baht. We want to grow in our own way, in both the OEM and high performance tyre segments, build a quality network with products, products and products."
Analysts have suggested the current dealership network operated by tyre distributor Stamford Tyres will eventually be phased out, and there'll be a gradual relegation of small independent distributors to megadealers or regular dealerships, just as most automakers are stepping up their Thai presence with investments in production facilities.
But Henry was quick to point out the Stamford network was here to stay, while Continental's new network will multiply tyre sales.
"We have a long relationship with Stamford. No conflict, no cannibalising. The sea is still full of fish."
The picture of Continental's tyre dealership network in Thailand isn't clear for the time being. So, why this sudden urge or commitment to Thailand?
"Thailand is a market that cannot be ignored. We are late, but Thailand is the centre of the automotive industry in the region and that is why we are here."
Continental is no slouch in the global arena as it is the world's fourth-largest tyre maker and the number one brand in Europe.
"In Thailand we expect to take 5% market share in three years. The major brands like Bridgestone and Goodyear won't give their business easily."
Thailand's annual tyre market is estimated at six million replacement tyres and one million truck tyres;Continental expects to sell about 350,000 tyres in the next three years.
Falling short of a confirmation, Henry did imply that Thailand was a strong candidate for Continental's tyre production expansion.
"Our three plants in Asia-Pacific are not sufficient,and where next? The rule of thumb is that we follow our OEM customers."
As mentioned earlier, Thailand is the regional hub for automotive export production and the largest onetonne pick-up truck market in the world; hence it is home to an abundance of OEM players.
Someone informed the writer that Henry had 30
minutes to make it from Centara Hotel on Rajprasong to Soi Asoke off Sukhumvit Road; Henry's appointment was with none other than the outspoken Henk Kiks of B-Quik Thailand, a bonafide Horatio Alger story in the local tyre and automotive quick-fix industry.
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