BANGKOK, Thailand -- The two vehicles that faced off at the Bangkok International Motor Show in March couldn't have been more different.
General Motors showed the Chevrolet Optra, a compact family sedan to be built at four plants around the globe: in Korea and Thailand for local and export markets, and in China and India for their markets only.
The Korean-built North American version was shown at the Detroit auto show in January. Styled by Italy's Pininfarina, it is based on GM-Daewoo Automotive & Technology Co.'s Lacetti platform. In various guises, it will be known around the world as the Chevy Optra, Suzuki Forenza and Buick Excelle.
Ford Motor Co., on the other hand, introduced the Everest. A truck-based SUV that seats seven, the Everest was designed for Southeast Asia, but also will be exported to Africa and the South Pacific.
Built exclusively in Thailand, the Everest is the first Ford nameplate developed exclusively in, and for, Asia.
Ford says extensive regional research showed that large SUVs had the best growth potential for Southeast Asia. GM says similar research drove it to the family-sedan segment.
The two vehicles are rolling examples of the competing and contradictory regional strategies of GM and Ford.
ASEAN markets booming
Both makers are only minor players in the booming Southeast Asian market but are eager to tap into some of the world's strongest growth. The 10-country Association of Southeast Asian Nations, or ASEAN, is made up of Thailand, Malaysia, Indonesia, the Philippines, Singapore, Brunei, Myanmar, Laos, Kampuchea and Vietnam.
William Botwick, president of GM Thailand, says the region's auto industry, led by Thailand, is poised to grow 40 percent to 1.6 million to 1.7 million units, "to become the Asia Pacific's third-largest market in 2007."
Ninnart Chaithirapinyo, vice chairman both of the Federation of Thai Industries and Toyota Motor Thailand, is even more bullish. He says Thai production will grow 28 percent to about 750,000 vehicles this year, but will swell to 2 million units a year by 2008.
Through May, the last figures available, sales of new light-vehicles in ASEAN's five key markets of Thailand, Malaysia, Vietnam, the Philippines and Indonesia are up 11.5 percent to 502,270 units, according to John Bonnell, director of Automotive Resources Asia Ltd., a consulting firm with offices in Bangkok and Beijing.
Length: 195 in.
Width: 71 in.
Height: 72 in.
Wheelbase: 113 in.
Curb weight: 2wd, 3,968 lbs.
4x4, 4,146 lbs.
Engine, base: 2.5L turbodiesel
Power: 121 hp at 3,500 rpm
But GM and Ford still are only minor players in the region, which long has been a Japanese preserve. Toyota Motor Corp.'s regional sales, for example, expanded 29.5 percent in the first five months to yield a 24.3 percent market share.
In Thailand, GM has a market share of only 0.6 percent through May, while Ford holds a 4.9 percent share. Japanese makes hold a commanding 86 percent share of the market, down a mere 10 percentage points since 1985 despite the entry of several European and U.S. makers.
"Breaking into ASEAN's entrenched market is totally different than succeeding in China's wide open boom market," warns Bonnell. "Neither GM nor Ford holds a clear advantage."
In Thailand, Ford assembles pickups at AutoAlliance (Thailand) Co., a factory owned half by Ford and half by affiliate Mazda Motor Corp.
Building pickups badged as the Ford Ranger and Mazda Fighter, the plant operated at 76.8 percent of its capacity of 135,000 vehicles last year. The addition of the Everest should push that to 80 percent this year.
The plant reflects Ford's strategy of building single-platform plants that swap finished products across national boundaries. It will build about 7,000 Everests this year, half for export to markets such as Indonesia and the Philippines. That will rise to at least 14,000 Everests next year.
Meanwhile, a Ford plant in the Philippines will ship Escape SUVs and Laser Tierra sedans to Thailand and Indonesia.
Tax laws in Thailand favor pickups, making it the world's second-largest pickup market after the United States. Pickups made up 58.9 percent of all new-vehicle sales in Thailand in 2002.
Those same tax laws also favor pickup-derived vehicles such as the Everest. Ford spent $100 million and four years developing the Everest off the Ranger pickup platform, and was keenly aware of those tax breaks. A 10-seat version targets Indonesia and the Philippines to meet favorable tax rules in those markets.
"The Everest is a key product for Ford in Asia," says John Parker, president of Ford's ASEAN Operation. "But it also will have a significant impact worldwide."
In Thailand, pickup-derived vehicles make up about 5 to 6 percent of total sales, "but elsewhere the segment's size is as big as we grow the market," says Michael Pease, regional manager of marketing, sales and service for Ford Motor Asia Pacific.
Positioning the Everest as a "novel lifestyle" SUV, Ford is aiming it at extended families with a household size of six and more people. Buyers are expected to come from ASEAN's emerging urban middle class, be between 30 and 45 years old, and already own a house and another car, possibly a pickup.
Priced from 985,000 baht, or about $24,040 at current exchange rates, the Everest will be Ford's third SUV for Thailand, after the imported Escape and Explorer. The Escape also is sold in a slightly different version as the Mazda Tribute, but there won't be a Mazda version of the Everest.
"Like the Explorer, the Everest SUV is badged exclusively Ford to boost our brand name," Pease says.
Hand in hand with that brand exclusivity, Ford will increase its dealership network in Thailand to 100 outlets by the end of the year from 67, to help handle the increased volume.
GM's multi-platform road
In contrast to Ford's single-platform plants, GM has built multi-platform plants to serve the Asian region. But in Thailand it has suffered from its lack of a pickup truck.
Isuzu Motors Ltd., owned 12 percent by GM, is the market leader in Thailand's pickup market. Even mighty Toyota has been unable to break Isuzu's dominance of the Thai truck market: Through May, Isuzu captured 43 percent of the pickup segment to Toyota's 29.8 percent.
Rather than challenge its own affiliate, GM is focusing on other segments.
The automaker created a new segment for Thailand with the Zafira compact minivan. GM has succeeded with the Zafira despite having to build a brand almost from scratch after it switched its branding efforts from Opel to Chevrolet in early 2000. Since then, all new models launched in Thailand have been badged Chevrolet.
Aggressive marketing is aiding the switch. To buoy demand with low monthly payments, General Motors Acceptance Corp. offers zero down, four-year loans with a final balloon payment.
GM sold 3,846 Zafiras in Thailand last year, and another 30,000-plus badged as Chevrolets or Holdens across the Asia Pacific region. GM also exported it to Japan as the Subaru Traviq.
New products for plant
Still, that hasn't been enough to fill GM's huge, $640 million Rayong factory. The factory also builds the Alfa Romeo 156. But combined 2002 production totaled only 39,000, yielding a capacity utilization rate of 29.6 percent.
This year, Rayong is adding the Optra sedan and export versions of Isuzu's D-Max pickups. Adding the latter will free up Isuzu's own Thai factory to meet booming demand within Thailand. The Optra and D-Max should lift Rayong's utilization rate to 75 percent by mid-2004.
This year's Optra output is likely to be 10,000, with more than half sold in Thailand. GM aims to build about 10,000 to 15,000 Optras and 45,000 to 60,000 D-Max pickups a year eventually.
Priced from $16,951, the Optra is aimed at smaller families than the Everest, but otherwise similar demographics: urban buyers aged between 30 and 45. The Everest has almost no direct competitors in the fairly new segment of large SUVs and was little affected by the SARS-led slowdown. But the Optra is going up against entrenched opposition.
The dominant players in the 1.5- to 1.8-liter sedan market are the Toyota Corolla Altis and Honda Civic.
"Despite the very competitive segment, Optra's prospects are promising," says Botwick. "Family cars are in high demand throughout ASEAN."
GM plans to expand its current 38-store Thai dealer network as Optra sales expand, thus building the basis for future growth.
"The Optra will advance Chevrolet's future expansion in Thailand, since we are studying the prospects of luxury cars as well," Botwick says.
GM has another sedan in the planning stage, which it hopes to put into production late this year or early next year.
Despite GM's plans to add more models to its regional lineup, Bonnell gives the edge to Ford for doing it right in Southeast Asia.
"By focusing on the pickup segment and exports, Ford's ASEAN strategy exhibits an understanding and respect for the region's operating conditions that will result in a slow incremental market growth," he says.
"GM's strategy of calling for a new factory, new products and developing new export demand weren't the best decisions for developing the ASEAN markets. As a result, GM will succeed in niche markets only for the foreseeable future." c
Staff Reporter James B. Treece in Tokyo contributed to this report.