Mission Statement

Automotive Trade Mission

to the ASEAN countries of

Thailand, Malaysia, Indonesia, and the Philippines

April 1-13, 2001

Mission Description

Trade Development's Office of Automotive Affairs will lead an automotive trade mission to Thailand, Malaysia, Indonesia, and The Philippines April 1-13, 2001. The mission will include representatives from a variety of motor vehicle, automotive parts and accessories, original equipment supplier, automotive service equipment, aftermarket distributor/wholesaler, collision repair, automotive consulting and services, and automotive retailing firms. Participant companies would be interested in gaining a foothold in the ASEAN region, which has substantial medium- and long-term potential for growth in the automotive sector. A valuable part of the mission will be the participation of the Senior Commercial Officer in each country visited. In addition, at least one Commerce Department staff member from ITA's Office of Automotive Affairs will accompany the mission. The Department will receive assistance in recruiting and scheduling events from the U.S. Chamber of Commerce, the Motor and Equipment Manufacturers Association (MEMA), the Specialty Equipment Market Association (SEMA), the Automotive Aftermarket Industry Association (AAIA), and individual members of the Automotive Parts Advisory Committee (APAC).

Commercial Setting

The ASEAN region was besieged by an economic and financial crisis from 1997 to 1999 which inflicted significant damage on the financial standing of many auto parts firms, particularly tier-one and tier-two suppliers. The last half of 1999 and the beginning of 2000 have shown signs of recovery in the automotive sector, though vehicle sales may not reach 1997 levels for at least another five years. Overall, there are promising signs of a prolonged recovery. Economic growth in the first quarter of 2000 (compared to the first quarter of 1999) was 3.2 percent in Indonesia, 3.4 percent in the Philippines, 5.2 percent in Thailand, and a stunning 11.7 percent in Malaysia. U.S. exports of automotive parts and accessories to the ASEAN region peaked at $632 million in 1997, but fell to $360 million at the height of the economic crisis in 1998. In 1999, as the market made a slight recovery, U.S. automotive parts exports to the region increased to $419 million. In the next three years, tariffs on automotive parts exports traded within the ASEAN region are scheduled to fall, creating opportunities for ASEAN automotive supplier companies and possible foreign joint venture partners to increase efficiency and become profitable by taking advantage of economies of scale. To date, the ASEAN automotive market, both for vehicles and for automotive parts, has been dominated by Japanese companies or ASEAN companies in close association with Japanese firms. Thai and other ASEAN automotive parts and accessories makers currently are looking for strategic partners to assist in meeting the demands of auto makers and vehicle end-users in an increasingly competitive and open economic environment. In order to compete long-term, U.S. automotive companies will find it beneficial to take advantage of the current situation in ASEAN by developing closer ties with domestic producers in the region.

Mission Goals

The mission's goal is to gain first-hand market information and provide access to key government officials and potential business partners for U.S. automotive firms seeking to expand their presence in the ASEAN market. New opportunities for U.S. firms are abundant with the liberalization of markets in the aftermath of the 1997-99 economic crisis, recent investments by U.S. vehicle manufacturers in the region, and global consolidation in the auto parts industry.

Mission Scenario

This business development trade mission will primarily consist of pre-arranged business meetings between U.S. and ASEAN automotive companies. ITA's main partners in this mission--the U.S. Chamber of Commerce, AAIA, MEMA, and SEMA-will play a large role in the scheduling of appointments. The U.S. Commercial Service in Bangkok, Jakarta, Kuala Lumpur, and Manila may also play a significant role in business matchmaking. Some of the meetings may be follow-up sessions after matchmaking activities in conjunction with the Showcase Asia program at the Automotive Aftermarket Industry Week (AAIW) in Las Vegas October 31-November 3, 2000. Other activities will include roundtable discussions involving mission participants and the Senior Commercial Officers from each country visited, tours of motor vehicle assembly and automotive parts manufacturing facilities, meetings with appropriate government officials, and company- or association-sponsored receptions.

Timetable

The mission is estimated to arrive in Bangkok on March 31 and leave Jakarta on April 13. Mission participants will be in Manila on or about April 4-7; in Kuala Lumpur April 7-11; and in Jakarta April 11-13, 2001.

The precise schedule will depend upon the availability of local government and business officials as well as the specific goals of mission participants.

Recruitment for the mission will begin September 1, 2000 and will conclude no later than January 26, 2001. Applications received after that date will be considered only if space and scheduling constraints permit. If fewer than ten (10) companies have signed a participation agreement by January 26, 2001, the mission may be canceled.

Criteria for Participant Selection

• Relevance of a company's business products to mission goals.

• Timeliness of company's signed application and participation agreement (including participation fee currently estimated at $3,600 for all four stops).

• Experience of company in international trade and potential for business in the four countries of the mission.

• Minimum of 10 and maximum of 22 participating companies in the mission. If the number of companies which have signed a participation agreement by January 26, 2001 exceeds 22, companies will be chosen for the mission based on how well they meet the selection criteria.

• Provision of adequate information on company's products and/or services, and company's primary market objectives, in order to facilitate appropriate matching with potential business partners.

While "first-tier" automotive original equipment suppliers will be welcome to join the mission, second- and third-tier suppliers as well as automotive accessories makers will be the focus of recruitment efforts.

Mission recruitment will be conducted in an open and public manner, including publication in the Federal Register, posting on the Internet, press releases to the general and trade media, direct mail and broadcast fax, notices by industry trade associations and other multiplier groups, and at industry meetings, symposia, conferences, trade shows, etc.

A company's products or services must be either produced in the United States or, if not, marketed under the name of a U.S. firm and have at least 51 percent U.S. content of the value of the finished product/service. At the discretion of the Department, the 51 percent U.S. content requirement may be modified or waived.

Any partisan political activities (including political contributions) of an applicant are entirely irrelevant to the selection process.

Contact

Mr. Jeffrey Dutton Telephone: 202-482-0671

Office of Automotive Affairs

Room 4036 Fax: 202-482-5872

International Trade Administration

U.S. Department of Commerce E-mail: Jeffrey_Dutton@ITA.DOC.GOV

Washington, DC 20230