The industry adjusted through lean restructuring, technology tie-ups, platform-sharing and mergers, all of which had an impact on operations in Thailand.

Not even the Sept 11 events, which shocked delegations at the opening of the Frankfurt motor show on that day, dented the confidence of European and Japanese manufacturers.

BMW country manager Karsten Engel noted that his superiors in Germany were wary of potential impact on BMW's operations and the industry as a whole.

"We thought about slowing down production but decided to wait and see. It turned out that we are having our best year and production worldwide is in the process of increasing."

BMW in Thailand expects to sell 10,000 cars within the next five years and is confident that its luxury performance segment will outgrow the industry average despite economic conditions.

FIRST QUARTER

Thailand started 2001 with the industry generally projecting sales at 320,000 units, a target later trimmed to 300,000 and finalised at 290,000 as the end of the year approached.

The country's regional hub status was challenged when a combination of rising wages on the local front and interest in China's one-billion-strong consumer market captured attention.

Ninnart Chaithirapinyo, chairman of the Federation of Thai Industries' Automotive Industry Club, warned that China's component and supporting industries had lower production costs and wages than Thailand's.

He said the future of the local auto industry depended on government stimulus packages because factories needed to lift their average capacity utilisation to 70% from 42% to stay competitive.

Like Ford counterparts known for their lobbying savvy, Mr Engel, president of BMW (Thailand), and his right-hand man, Wit Sitivaekin, started the year by calling for tax incentives for vehicles that topped Euro III emission standards.

A Toyota Altis, complete with dancing girls, at a Bangkok motor show. In general turnover for 2001 gave cause for good cheer given the economic situation.

All BMW products pass Euro III while the new Mini is at Euro IV level. Toyota's D-4D common-rail diesel pickup is the only Japanese pickup product to pass the global Step III standard to be enforced in 2004.

The Japanese camp pitched in with the Automotive Technology Transfer from Japan Project as a goodwill gesture to Thailand.

Thanks to Japan's Ministry of Foreign Affairs and the Ministry of International Trade and Industry, experts were dispatched through the Japan International Co-operation Agency, Japan Overseas Development Corporation and the Japan Automotive Research Institute to help Thailand's auto industry.

Thai counterparts were not to be outdone with their own PR blitz in the guise of the Thailand Automotive Institute (TAI) which, according to its director Vallop Tiasiri, will raise standards to achieve regional hub status through annual funding of 20 million baht.

The TAI is a policy mediator with a liaison board of C-10 directors-general and executives from the private sector. TAI's role is to carry out research, recommend on policies, promote activities of auto industry organisations, promote similar organisations at home and abroad and offer services to members of the industry.

On the product side, Land Rover won a new lease of life through the establishment of Land Rover (Thailand) with country manager Colin Andrews at the helm. The SEAT brand beefed up its 17 dealerships.

Ford broke the Japanese grip on the pickup truck market by placing third in sales with a 15.7% market share. Toyota lost its momentum with slow growth in every segment.

SECOND QUARTER

With the industry still talking about selling 320,000 units, vehicle sales grew by 12.2% year-on-year as the first quarter ended.

Isuzu was knocking on heaven's door as it took an 815-unit sales lead in total vehicle sales over perennial powerhouse Toyota. Honda also dented Toyota by taking a 36% share of the car market, leaving its key rival with 28%, down from 40% at the same time in 2000.

A BMW Series 7. The German brand is bullish on sales prospects.

May began with General Motors (Thailand) announcing that it would become a leading automotive exporter by 2003. GM builds the mini-MPV Zafira which is exported under the Chevrolet, Opel, Vauxhall and Holden badges. It also makes 4,000 Alfa 156 cars a year.

Rounding off the second quarter was the official visit by Mazda Motors Corporation's chief executive, Mark Fields, who was promoting a sporty focus for Mazda products.

Mazda's announcement that it would increase spending by 30% on new products and invest in direct distribution to raise brand awareness and improve operations gave a new lease on life to a brand that once seemed destined for obscurity due to poor management by local distributors.

Mr Fields, the youngest chief of a major auto company said: "Thailand is ideal as a manufacturing and export base. Our decision to locate the AutoAlliance plant to Rayong is the right one. The Thai market is interesting because pickups are so important while compacts are an integral part of the passenger car segment. Mazda needs to make sure that Mazda has competitive products to remain competitive. Thai customers are very demanding."

THIRD QUARTER

Ford Operations kept a low profile due to events on the other side of the world such as its recent spat with Firestone, the tyre manufacturer, and Ford Motors' chief executive Jacques Nasser coming under pressure.

BMW took over from lobbying specialist Ford and was very vocal about speeding up the creation of the Asean Free Trade Area.

If the free-trade plan is implemented fully, it would benefit Thailand's hub status directly because Thailand houses the only wholly-owned BMW plant in Asia and will encourage other BMW joint-venture in Asean.

On the sales side, Honda (23,996 units and a 12.85% market share) surprised everybody by relegating Nissan (23,933 and 12.82%) from third to fourth in total vehicle sales. The achievement stood out as Honda does not make pickup trucks.

Rounding out the third quarter, Toyota Motor Thailand president Ryoichi Sasaki made it clear to the industry that Toyota was not neutral on Afta and insisted that Afta was needed in order for Thailand to compete globally.

Toyota finally regained the passenger car segment lead over Honda with sales of 21,606 units against 21,323.

FOURTH QUARTER

A face-off between pickup powerhouses Isuzu and Toyota developed as Tri Petch Isuzu president Goro Shintani downplayed Toyota's D-4D direct injection common-rail technology as "too late".

However, tests of the D-4D 2KDFTV power unit on fuel efficiency revealed comparable rates to Isuzu's alternative. The decisive advantage was Toyota's maintenance schedule which claimed 50% cheaper rates than Isuzu's, although the widening sales gap favoured Isuzu.

However, the brand squabble aside, pickup producers took a collective beating with sales in September down by 8.84% from those in August.

Ford stirred the market with comments at its fifth anniversary party, as the Big Three American carmaker announced plans to dethrone Toyota from second place in the pickup segment within the next five years.

Mike Pease, the executive director of Ford Sales & Services (Thailand), said that Ford had the largest share of the pickup export market worldwide and would achieve a top-three ranking in total sales of all types of vehicles by 2006.

As the year closed with the industry's revised sales target of 290,000 units in sight, Toyota was the overall best-seller for the 23rd consecutive year while Isuzu was set to take the commercial vehicle crown for the 19th consecutive year. Honda's strong image and customer loyalty gave Toyota a run for its money but the traditional leader edged ahead in the last quarter to take its 23rd consecutive crown in sales of passenger cars. Isuzu was on cruise control as it dominated the one-ton pickup truck segment with more than 42% of the market.

Industry figures believe turnover in 2002 will reach 320,000 units despite global economic weakness.