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of the yen, it has been happy to take advantage of the government's & Co., also

encouragements for export industries as well as Japanese capital's search for cheap components. Nissan sees its tie-up with Siam Motors as having a major role in its global strategy to make Thailand one of its low-cost production bases, and in October 1986 it announced its key plan to supply the markets of Taiwan, Malaysia, Bangladesh, and Pakistan.

Of the 43 companies in the Siam Motors group, a full 19 are related to motor vehicles, and almost all are linked in one way or another to Japanese capital. Many of the other companies in the group also owe their existence to agreements with Japanese interests, for example, with Komatsu in construction machinery, with Hitachi in elevators, and with Daikin in compression engines. In all, 11 of them are in trading (notably Siam Motors International Trading), 12 are in manufacturing, four in fmance and real estate, five in raw materials, and two in Thailand's most notorious industry, "leisure." Although the Siam Motors group has been dramatically affected by the higher prices of imported components due to the rise of the yen, it has been happy to take advantage of the government's encouragements for export industries as well as Japanese capital's search for cheap components. Nissan sees its tie-up with Siam Motors as having a major role in its global strategy to make Thailand one of its low-cost production bases, and in October 1986 it announced its key plan to supply the markets of Taiwan, Malaysia, Bangladesh, and Pakistan. 29

There are clearly long-standing ties between Japanese and Thai capital, and these have contributed much to Thailand's current second-most-favored (to China) status among overseas low-cost production sites for Japanese capital. Japan's two largest trading companies, Mitsubishi Corp. and Mitsui & Co., also continue to siphon off Thailand's raw materials, with 27 and 36 joint ventures in the country respectively.3o Investment from Japan in the late 1980s and early 1990s probably contributed more than one percentage point to Thailand's double-digit growth rate each year. Associated with the increasing amounts invested has been a continuing shift from import-substituting projects to export-oriented ones for the European, U.S., and Japanese markets, especially as a result of the higher yen. This has happily coincided with the encouragement given to export companies by the Thai government's Sixth Development Plan (1987-1991). The reason for the departure is clearly illustrated in the move by companies like Pioneer and Minebea from Singapore, where wages averaged $300 in 1986, to Thailand, where they were only $75, as their main production bases for export to Japan, the United States, and

Nippondenso Jomatsukawa Plastic Fuji Spinning Bandai NihonGakki Aderans Nichiden Kagaku

Electric stoves, refrigerators

ColorTVs Compressors for air

Market

Source: Nihon Keizai Shinbun (NKS), 25 September 1987, p. 23.