EVs will disrupt market in long term
In the future electric vehicles (EVs) are expected to create a major impact on the Thai auto parts industry, says SET-listed auto parts maker Aapico Hitech Plc (AH).
President and chief executive Yeap Swee Chuan said at a seminar titled "Asean@50: In Retrospect" held by the Bangkok Post that the trend is moving towards to new-generation vehicles such as EVs because most carmakers are moving to these high-technology vehicles.
"Although EVs will not become popular on the roads immediately, they will increase gradually over the next 20-30 years, when battery electric vehicles could make up 20% of car sales worldwide and hybrid electric vehicles could comprise 30%," said Mr Yeap.
"Customer demand can make EVs become a reality sooner."
He said Aapico added an R&D unit as they have become essential for auto-related firms in adapting to future trends.
Carmakers from Japan, Germany and the US have had R&D units gathering automotive know-how for over 100 years, but Thai auto firms are original equipment manufacturers, meaning their engineers have many excellent skills they can use to develop their own products.
"Thailand's automotive industry has developed to be very strong globally, producing 2 million units a year and growing to 3 million in the intermediate term," said Mr Yeap. "Thai-made vehicles have high quality, less defects and less recalls."
He said Aapico aims to be a first-tier parts maker in Asia by 2020 with revenue of 30 billion baht and a net profit margin of 10%.
After spending US$100 million (3.3 billion baht) to acquire Indian conglomerate Sakthi Automotive Group in mid-2017, Aapico is looking to enter other regions such as India, the EU and the US. It has a presence in Thailand, Malaysia and China.
Mr Yeap expects its total revenue this year to grow by 5% to 16 billion baht. Auto parts manufacturing accounts for 64% of revenue, with the rest distribution for Mitsubishi, Ford and Honda. Some 75% of its total revenue is from Thailand.
AH shares closed yesterday on the SET at 37.75 baht, up 50 satang, in trade worth 111 million baht.