INTERVIEW / JAY KUNKEL
Opening a manufacturing plant in Rayong is part of Continental AG's strategy of strengthening its operations in Asia where it hopes to generate up to 25% of its sales by 2015
ALFRED THA HLA
Jay Kunkel, president of Continental AG's operations in Asia and a member of the firm's Automotive Management Board, flew into Thailand late last month to honour an earlier commitment he'd made to Motoring.
The day we met, Samak Sundaravej's ultimatum to the PAD protestors was headline news and political analysts were predicting mayhem and bloodshed in the streets. Turbulent times for sure in this, the Nagoya of Siam. But something Kunkel said towards the end of the interview had the effect of putting everything into perspective (for me at least).
"As a businessman you tend to stay out of politics. Business, anywhere in the world, is more comfortable with political and economic stability. It's easier to operate in an environment with less risk.
"But the demonstrations [at Government House] when I flew in yesterday [August 27] didn't stop me from coming to Bangkok ... didn't stop our business meeting and certainly didn't discourage us [Continental AG] from doing what we need to do, which is to participate in this market and serve our customers."
Earlier, Kunkel explained that Continental now has 33 manufacturing bases across Asia and that No. 34 - a new, 5-billion-baht plant in Rayong which will make powertrain and interior electronics and is expected to be operational by mid-2009 - and No. 35, a facility in China, are also in the works.
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10 questions for Kunkel
- What's your favourite car?
The Porsche 911.
- Favourite timepiece?
If I was given the choice, it would be a Patek Philippe World Timer. In terms of value, it's the Chronoswiss. The Chronoswiss I have, but the Patek Philippe not yet!
- Favourite human being?
[Former US president] John Kennedy. He demonstrated courage in war, intelligence, [good] judgement during the Cuban missile crisis and he inspired the world in a positive way.
- Favourite restaurant?
Cipriani's in Mayfair, London.
- Favourite author?
Somerset Maugham, because of those Far Eastern tales he penned about 100 years ago. He also spent some time at the Oriental Hotel.
- Favourite athlete?
I'm a huge Formula One fan ... so Michael Schumacher of Ferrari [currently test driver for Ferrari Scuderia; world champion in 1994, 1995, 2000, 2001, 2002, 2003 and 2004].
- Your favourite destination; and why?
Chiang Mai. It has beauty and nature and it allows me to get a little bit closer to Thai people.
- Most treasured possession?
My memories!
- Greatest achievement?
The rare opportunity to genuinely participate in the growth and development of Asia - Tokyo, Seoul, Hong Kong, Shanghai - in the last great marketing regions. As technology makes the world smaller, the world will become a little less interesting.
- If you were put in charge of national automotive policy for a day, what would you do?
I would encourage the government to focus on legislation regarding [protection of] the environment, [public] safety and affordable cars. |
"We have 40 sales offices, over 20,000 employees and 3,000 engineers along with new technical centres in Yokohama, Japan and two in China; and a new Asian headquarters and a technical centre in Bangalore, India [opened] last July.
"Asia is critical to the future of Continental AG and it will make at least 25% of our global revenue by 2014/2015," he said.
The firm reported total revenue of about 26.4 billion last year, putting it in second place behind Bosch (28.5 billion), but Kunkel said it was difficult to measure the contribution that Continental's Asian operations currently makes to this figure, noting that "most of the production here in Asia is for Asian customers and internal supply".
When the equation was scaled down to the Asean region, however, he was prepared to comment:
"It's very important. We're driven by our customers. The Japanese OEMs [original equipment manufacturers] have about a 75% market share in Asean as they go towards global platforms, which is why it is very critical to us. We have a good presence in general and we're enhancing our presence here in Thailand."
But wouldn't Continental prefer to deal with a more homogenous, combined Asean market?
"I think what's best for the consumer is best for us. It's a bit of an ideal ... if Asean could come up with one consumer-tax policy or [a single rate of] excise tax ... but as a businessman, I believe that enhancing the purchasing power of customers is certainly something that we would support, anything that simplifies or reduces legislative complexity is a win-win for everybody and for local governments."
Thailand has now been chosen as a stepping stone towards larger markets like China, but isn't Continental being a tad conservative in terms of the timing of its investment here?
Kunkel replied that the firm's Asia investment strategy was far from conservative and pointed to the extent of its operations in the Philippines (two facilities), Malaysia (three tyre and three automotive operations) and Indonesia and to the "significant presence in Rayong where over 100 million [has been invested] and 1,200 people are employed".
Thailand is critical as a manufacturing base for Asean in terms of volume, he went on.
"It is important to us because all our major customers are here, one way or the other [the Japanese, Ford and GM]. You need to be here to support customers and global platforms."
Shifting gears to the high price of petrol, we asked Kunkel what effect this is having on his firm's investment strategy.
"The short answer is no[ne] ... [but] the answer isn't as easy as the question. Obviously oil is a limited commodity, but our technology improves fuel efficiency and reduces CO2 emissions."
(Since 2003, Continental has been the No. 1 supplier worldwide of hybrid technology, Kunkel claimed, revealing that the firm recently supplied lithium-ion batteries for the Mercedes-Benz S400 hybrid. Toyota eat your heart out!)
"So, in terms of the price of fuel, at some point in time it will rise, but then it generates larger demand for hybrids, which also helps the environment ... Bangkok would be ideal for such vehicles."
Not that the internal combustion engine is going to become extinct tomorrow; Kunkel doesn't see hybrid and electric vehicles stepping into the breach for quite some time to come.
Continental's strategy for Thailand and Asean enhances a pre-existing footprint, so to speak, although Kunkel was quick to add that "a strategy is never [etched] in stone; it's something we're looking at with Tom Chambers [MD of Continental Automotive (Thailand)], driving this process to leverage our investment and operations in the region."
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