BMW, VW to Source More Parts from Thailand

Germany’s BMW and Volkswagen will source more parts from Thailand’s well-developed autoparts industry to enhance competitiveness and expand Asian operations.

BMW will establish its first Southeast Asian international procurement base in Bangkok as early as next month with an eye on shipping Thai-made parts meeting quality standards to BMW’s 30 or so factories in 14 countries around the world.

In addition, BMW decided last year to spend 1.1 billion baht ($31 million) to expand its sole passenger car plant, aiming to boost the Thai plant’s annual output capacity to 20,000 vehicles by 2017. Exports to China will also begin, increasing the need to procure local parts.

Volkswagen plans to relocate its parts procurement base in Kuala Lumpur to the same site as a Thai factory making commercial vehicles for its Scania brand as early as next month. The German automaker procures parts from about 700 suppliers in Thailand, more than triple the number of suppliers in Malaysia. The new Thai facility will supply parts to the Volkswagen group’s plants across Southeast Asia.

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