When I’m on holiday I always try to leave my job behind but usually, before I have even had a chance to try, I’m reminded in a positive way of what I do for a living and I can’t wait to get back to work. This year we vacationed in Thailand. After a few relaxing days at the beach we took our car (right-hand steering!) and cruised through the inland of Thailand. Thailand intrigued me not just because of the beautiful scenery, the delicious food and the engaging people but also because of the way its economy is managed. The prime minister runs the country like the CEO of a multinational, so he and his government are able to quickly make drastic decisions when they think it will benefit the country and the economy. It seems to be working out very well. The government publishes quarterly reports on the state of the economy. The system evidently works because Thailand’s economy keeps on growing with 6 to 8% per year.

 

In order to maintain growth the government has designated a few sectors, one of them the automotive industry, as core growth sectors. Thailand is trying to become market leader in the automotive sector because it wants to become the ‘Detroit’ of Asia. Not an easy task with China in your backyard yet Thailand is getting there. All the big names like Toyota, Honda, Mitsubishi, Nissan, Mazda and General Motors either produce or assemble their cars here for both the regional and global export markets (e.g. Opel Zafira for Europe). The most obvious evidence the country is doing well can be found in the streets. The average Thai makes no more than € 125.00 a month but a steadily growing group of people make increasingly more. Money is more readily available these days and more and more people get the chance to borrow money in the form of credit card loans as well as lease- and financing arrangements. Captive leasing has also made an entrance. These loans have fuelled the domestic demand quite dramatically which resulted in an increase of the fleet.
 
Pick-ups rule

Pick-ups rule the streets in both the countryside and the city. The brand Isuzu, which has long vanished from Western Europe, is market leader in pick-ups in Thailand. The familiar Isuzu Campo has won several J.D. Power awards. The overall market leader, however, is unquestionably Toyota. This brand has a fine grid of showrooms and workplaces all over the country. Location clauses are non-existent, so it is not uncommon to see three dealers of the same brand in a relatively small city. The growing demand for new cars doesn’t change the fact that the roads are still used mostly by old cars. Since people only get paid  € 3.00 per hour, the economic life span of cars is naturally much longer than it would be in Western Europe. Twenty-year old pick-ups are quite common. Considering the increase of the fleet I had expected the used car trade to be rather professional but no; the used car trade is still street trading. Usually four cars are parked in front of a door with a sign stuck to it. In Chiang Mai I noticed a single car dealer who presented his fleet the way we would. But he was not a brand dealer.

 

There are no brand dealers in this segment right now but this seems to be changing. Thanks to the increase in leasing and financing arrangements, a lot of used cars will be returned within a few years. Used cars with the residual value risk for the manufacturer. Toyota was one of the first brands to establish a used car label. The English-language newspaper ‘The Nation’ even devoted an editorial to it. Used cars are a recurrent feature in the papers. I turned one of the newspapers I took home into a PDF-file to give you an idea of what they write.

Should you travel to an Asian country anytime soon, you will experience for yourself the energy sizzling all around you. Cities like Bangkok are an inspirational high and have a definite ‘vibe’. The papers are filled to the brim with it. These experiences made me realize what a heavy burden bureaucracy has become and how it nearly smothers entrepreneurship. Several European countries are trying to set up an innovation platform but so far it’s only words. Perhaps the politicians should take a field trip to Thailand. The old-fashioned motto “Stop jabbering, start working” is very much alive there. It’s no accident this attitude is found in most ports. So lets roll up our sleeves and get to work. Holidays are over.

 

Michel van Roon