BMW cars confined for investigations

The Customs Department has confined a number of BMW cars on arrival for investigations and verifications after the importer, Bayerische Motoren Werke (Thailand), reported ‘suspiciously low’ prices, apparently wishing to pay less in import tariffs. This is the second German car maker to face customs problems. Mercedes Benz (Thailand) was the first.

Without naming names, a department source said a ‘Benz’ rival’ in the Thai market also faces similar tough actions as the Kingdom will suffer from losing a large amount of taxes. The ‘irregularly low’ quoted import prices help importers save a great deal in terms of costs. The ministry of finance has advised the department not to compromise with the two German car makers, but to further investigate into the real, suitable prices, for possible higher tax revenue, said the source.

MBT and BMWT are reportedly seeking help from the German embassy here.

The car maker reportedly said the prices of Mercedes S Klass units have been brought down by the German plant, but customs officials wonder why retail prices in the market have been brought up very sharply. MBT has reported the prices nearly 50% lower than those imported over the past few years.

Mitsubishi to spark price war in mid-size car segment

MMC Sitthiphol, maker and distributor of Mitsubishi cars in Thailand, is planning to launch the new Lancer sedan next week, with a competitive price tag. The new Lancer, which will have minor changes in its looks, will be equipped with Mitsubishi-patented Sportronic transmission gears, which are normally available in luxury cars.

MCC Sitthiphol president Dr Vatchara Panchet said the new Lancer will be available only in 1.6-liter and 1.8-liter models. MMC has stopped bringing out Lancer 1.5-liter models to keep way from fierce competition in the budget car segment, which is controlled by the two giants - Toyota Soluna and Honda City.

The price of a 1.6-liter Lancer begins at Baht 586,000, while a 1.8-liter model starts at Baht 787,000.

MMC hopes to sell 18,000 units of cars in the domestic market this year, and it is expected that the low-priced Lancer will help the company achieve the target.

MMC claims to be the champ in car exports, with between 70,000 and 75,000 units to be sent abroad by the end of the year.

Thai-made leather products win over GM

It is very difficult to win the heart of one of the US Big Three. But Chaiwattana Tannery Group managed to do it. The group, a listed company on the Stock Exchange of Thailand, has been appointed by General Motors Co. to be the sole leather supplier for car seats in the Asia-Pacific region. The first consignment of the lot, worth Baht 555 million, is bound for GM plants next month.

Veerapol Chaitheerat, a director of Chaiwattana Tannery Plc, said the company has spent millions of baht in research and has found that leather sheets made from water buffalo skin yields a much higher quality than that from cattle. Orders for leather sheets and other ready-made leather products are rising, Veerapol said.

Local car makers are now following suit, turning to Chaiwattana for their leather products after seeing GM sign the deal.

Chaiwattana now has a 1% share of the leather goods market in the US auto industry, and will continue to supply its products to GM over the next five years.

The group started in the tanning business nearly 30 years ago, and later added toys for canines to their production line.

Dell finally joins Internet-PC bundle campaign

The largest player in selling PCs on the Internet, Dell Computer, has been the latest player to declare war against industry rivals in the fierce Internet-PC campaigns launched to capture more share in the rapidly growing PC consumer market. Dell PCs are now available in packages with the Internet Thailand service.

Dell (Thailand) said two desktop models, OptiPlex GX 10, powered by Celeron 433 MHz processor, and OptiPlex GX 11, with Pentium III 450 MHz processor, are now available with 466 hours of Internet usage time in a six-month period, by Internet Thailand. GE Capital will handle the installment plans for Dell’s PC-Internet bundle packages, said Thada Savetsila, Dell manager Thailand.

Dell (Thailand) said the two bundled models are Internet-ready, equipped with a high-speed Internet card to optimize connections, with a 3-year guarantee.

Loxinfo and Metro System Corp, in another move, announced a free-server campaign for organizational customers using its Loxinfo’s lease-line services.

Dell Computer said it makes US$30 million a day from selling PCs on the Net.

Samart to buy WorldPage

Samart Corporation has been in advance talks with Total Access Communication Plc to buy 51% of its WorldPage. The deal is expected to be worth over Baht 100 million. If the negotiations are successful, the Samart Group, which already owns and operates the PostTel paging network, will become the largest player in this industry with more than 300,000 users.

Under the projected new holding structure, Bliss-Tel, in which Samart owns 30%, will hold 51% in the new company, as TAC would dilute its shares in the company to 29%. Hong Kong Telecom will retain its 20% stake in the new paging company, said industry sources. PostTel claims to have 240,000 users at present, while there are only 60,000 users in WorldPage service. The number of users of the two services is expected to reach 400,000 by the end of this year.

PostTel is keen to have two frequency ranges left to be utilized by WordPage, for the ambitious expansion plan. Bliss-Tel has been responsible for marketing of WorldPage for more than three months.

Advertising spending up Slightly in six months

The advertising industry has seen companies and government agencies spend a bit more money in advertising in the first six months this year, with movie theaters benefiting the most from the increase. Businesses have spent Baht 130 million in advertising on movie screens between January and June this year, about 43% up from the Baht 91 million spent in the same period in 1998.

According to the latest survey by the Advertising Business Association of Thailand, advertising in newspapers has increased to Baht 3.985 billion, 17% up from Baht 3.395 billion in the same period in 1998. Radio networks have netted 16% higher incomes from advertising sales, up from Baht 1.899 billion. Television networks have made Baht 14.513 billion from selling commercials, but the figure represents only a 1% growth.

The overall billing rose to Baht 21.747 billion, a 3% increase, while the whole-year spending is expected to top Baht 40 billion, a 5% increase.

Outdoor advertising media and magazines suffered the most as the billing fell to Baht 611 billion and Baht 1.019 billion, 23% and 12% decreases, respectively.

US tobacco giants control huge stake as locally-blended brands suffer

The two US tobacco giants, Philip Morris and RJ Reynolds, have seen a sharp rise in sales in the Thai market over the past four months. Thai-blended cigarettes, namely Krong Thip and Saifon (falling rain), are said to be suffering losses because of the US surge in sales.

Malaysia has also been allegedly collaborating with the US companies to dump the prices of US brands in the Thai market.

Until recently, Krong Thip, Saifon, and other brands by the Tobacco Monopoly of Thailand have controlled 92% of the market, while foreign brand cigarettes had only a 2%-stake. The products by Phillip Morris and RJ Reynolds now control 25% of the domestic market, which is worth Baht 50 billion a year, industry sources said.

The two US giants use Malaysia as their production base for the Asian market, to benefit from a regional agreement on free trade known as ‘AFTA’.

The price of a pack of Marlboro, Camel, or More has been brought down to Baht 28 and Baht 29 to compete with the two popular Thai brands. Phillip Morris already controls 60% of the foreign brand segment here.

Copyright 1998 Pattaya Mail Publishing Co.Ltd.
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Updated by Chinnaporn Sangwanlek.