Managing director Sompong Phaoenchoke shows off the TR Transformer, for which the company sees good potential in provincial markets in Thailand.

What is your business model?

TRU has always focused on product design and development through the production of dies and jigs and the manufacturing of metal and plastic automotive parts, seats, and modification of multi-purpose and specialty vehicles.

In recent years we have adapted our strategy to focus more on OEM (original equipment manufacturer) parts making, contract assembly and painting, which now represent 80% of our total business. However, we are now looking to use our capabilities because of our uniqueness, integrated systems and R&D in vehicle modification to expand our specialty vehicle business further.

Who are TRU’s customers?

Our customers are leading US and Japanese manufacturers, which include car makers, industrial machinery makers, motorcycle makers and others. The type of work that we do ranges from customer to customer. For example, for Tata pickup trucks we design and assemble the flat-deck box, for Chevrolet we are a major parts supplier for stamping, and for Nissan we do the painting and welding for its Navara pickup truck.

We do similar work for other automobile manufacturers in Thailand as well as for international markets. Thus we have a wide range of capabilities to service our customers and provide the necessary support to maintain the relationships that we have built over the years.

TRU has expanded to include military vehicles. How is this business segment progressing?

In 2014 we plan to expand the market for our new vehicle, the TR Transformer. We have appointed 10 new dealers in the North, Northeast and in the South of Thailand because our target customers for the TR Transformer are successful business owners in the provinces and local government officials. The vehicle is designed to look strikingly robust and solid, yet stylish, similar to a Hummer or the Land Rover Defender, and yet it is different with a spacious passenger cab that is larger than those in its competitors.

We developed the vehicle based on the engine, chassis and drive train from the three-litre, 163 HP Toyota Vigo 4×4 pickup, which gives customers confidence in the performance and ease of maintenance of the vehicle. We aim to sell about 300 units in 2014 and there will be opportunities to expand sales to neighbouring countries in the future once the Asean Economic Community (AEC) comes into effect in 2015.

With the domestic auto market slowing, what is TRU’s outlook?

Thailand’s total vehicle production for 2013 was 2.46 million units, similar to 2012, of which 1.33 million represented domestic sales, a decrease of 7% from 2012, and 1.13 million exports, which was up by 10%. This year we expect the domestic vehicle market to decline a little further.

However, this is only a short-term issue because in the longer term the Thai automotive industry is still outstanding and certainly the most important production base in Asean for foreign car makers. This is partly because Thailand itself has a domestic market of 1.3 million units a year that will continue to grow.

Combine this with the AEC, which will stimulate demand for vehicles in the region, and Thailand will continue to be a target for car makers, with new entrants from China, Korea, India and Europe that will increasingly try to enter these markets and produce here.

What differentiates TRU from its competitors?

TRU is an all-round player in the automotive industry as our capabilities range from product design and development to the production of dies and jigs and the manufacturing of metal and plastic automotive parts and seats, through to the modification of multi-purpose and specialty vehicles. These capabilities, combined with our after-sales service, provide a compelling service to foreign car makers planning to set up a production base in Thailand.

What are the biggest risks facing your business?

One is the potential labour shortage which can be offset by further investment in machinery to a certain degree. Also, this industry is constantly focused on cost reduction so we have to ensure that we can compete with newcomers, because if we do not respond quickly as an industry then foreign firms that invest here may begin to move elsewhere.

What impact will the AEC have upon your business?

We have already seen the benefit of Afta (Asean Free Trade Area) which has allowed Thailand to export to the Philippines, Malaysia and Indonesia with zero duties, and I can see the AEC opening further markets for Thailand. However, there may be resistance from member countries to protect their local industries. In terms of competition, given Thailand’s infrastructure and automotive ecosystem, I am confident in the country’s future for the next five to 10 years.

For TRU, we are ensuring that our company is efficient in its operations and that we continue to conduct R&D into new products such as the MUV4 Transformer car, as well as build strategic business alliances inside and outside the country via partners.

Where do you see TRU in five years from now?

We want to be both a first-tier OEM supplier and a vehicle brand owner as we have the capability to do so. With the OEM business, we will continue to grow with the industry and make the necessary investments to meet customer demand for the next five years. We will continue to expand our specialty vehicles.

We are also expanding the business segment with industrial machinery makers having recently established a joint venture with Kyowa, a leading producer of parts and assembler of cabin bodies for industrial machinery, excavators, construction equipment and agricultural machinery. We are also in discussions with another Japanese company to make bodies for heavy trucks to cater to the increased demand for vehicles of various kinds as Thailand will become a transport and logistics hub between the various AEC member countries.

Finally I would like Thailand to have its own brand within the automotive sector, whether it is a car, a part or a niche vehicle because Thailand has to be able to have more value-added products to maintain its competitive edge in the global market.