Uli Kaiser, Business Development Manager South east Asia, EMAG Group

Overview

• Conclusion:

  There are billions of people who don’t own cars but would like to – so the future is certain. China will rise to command 30% of the world’s market but it’s domestic brands will be weeded out. At the end we will not need more than 10 car manufacturers in the world", says Uli Kaiser from EMAG Group who is also President of Thai-European Business Association (TEBA) and Publisher of Thai AutoBook

What are the factors that can drive the automobile industry towards growth?
There are billions of people who don’t own cars but would very much like to do so. At the same time there are millions of people who own cars and would like to get a better vehicle. Plus there are some 10 thousand super rich guys who would like to extend their collections – so the future is certain from all angles.

Major challenges for the automotive industry…
Overall improvement – lighter, faster, more efficient. Every single part in the automobile represents a challenge. The industry has to be ready to accept a Moore’s law situation for automobiles. We need ‘all new S-Class’ models every year not every four. So rapid development, protyping and deployment will be key for success in the 21st century.

India is set to become world’s third largest automotive market. How can technology providers from India such as machine tool, die mould capitalise on the situation and compete with foreign players?
When will India become the 3rd largest market? Not in the next 5 years I think. But I believe in the potential. Indian companies need to smart up and embrace technology instead of always trying to find the ‘cheapest’ way. ‘Cheap Thinking’ is an Indian disease which has brought a lot of problems exemplified by the Nano. No one wants a cheap car. Tata’s takeover of JLR however seems to work out just fine showing that high-tech automotive value add concepts can be championed by an Indian industrial group and I think this program should be a role model from OEM over Tier 1 to the supporting industry.

According to you, where does India stand when it comes to automotive manufacturing?
At the moment India is local for local with no national car but a strong global player in the form of JLR.
India is for sure a market with huge potential having less than 100 vehicles per 1000 people currently. The big breakthrough will come if the government can remove barriers for car ownership. Of course there is no local intellectual property in the mechanical side – maybe the app side of the car will offer Indian entrepreneurs a profitable playing field.

Factors that are driving the growth of Thailand’s automotive industry…
Thailand is Japan’s backyard. So Thailand grows as an export hub for the World for Japanese and US OEMs. It has got fairly strong local demand with about a million units per year – poised to increase at about 5-10% year on year and it benefits from it’s ASEAN, Asia-Pacific, Middle-East and global export markets. Also, the smaller auto-making nations like Vietnam and Philippines will concede their industry to Thailand as it makes no sense to have more than one hub in the region.

What kind of demands do you see in countries like Thailand, India, China compared to European countries and the US?
Europe and US have more than 400 cars per 1000 people, Thailand, India and China are moving there. This is what creates the auto market of the future. ASEAN has about 50 cars per 1000 people – so at 600 Mio total population and considering replacement needs there’s an upside of maybe 40 Mio vehicles over the next 20 years. Of course demand in the developing countries will be more basic as compare to Europe and the US although there’s a huge market for medium and high-end cars.

Difference you see between Asian manufacturers (Japan, Korea, China, India) and its European counterparts (such as Germany, Italy, UK, Sweden, etc) in terms of approach in manufacturing automobiles?
Germany innovates and the rest of the world replicates the concepts and designs trying to make money. I know it sounds rude, but it’s true. Innovation in non German European and Asian countries are also driven by German engineers so the principle holds true. The only area where Japan has some levy is batteries – but this is not automotive innovation.

Auto industry next frontier for tech innovation…your views
Clearly it’s connectivity – the car will become more and more like a phone, or better an Iphone that lives not because of telephony but for apps. In the future cars will follow this model.

There are various articles written about electric vehicles (EVs) and how they are the future of automotive industry. Your comments…
I love EVs. But they are just a side arm of automotive evolution – maybe like Neanderthals were to homo sapiens. EVs have no immediate future for many reasons. I think their main purpose is to increase efficiency of gasoline/diesel powered engines and to improve battery efficiencies for non-automotive use.

What about the future of driverless car?
It’s an app. In the past cars were only used to get to A and B. In the future your driverless car will take you to work and have an in-built cappuccino machine and provide working space while you’re on the way to work. And during your work it will pick up your kids from school and do some shopping so you can work more.

Future of automotive industry….
As I mentioned before – there are billions of people who don’t own cars but would like to – so the future is certain. China will rise to command 30% of the world’s market but it’s domestic brands will be weeded out. At the end we will not need more than 10 car manufacturers in the world.

As told to Nishant Kashyap