Subaru production to cease in Thailand

In Southeast Asia, Thailand is considered as an automotive manufacturing powerhouse. A lot of automakers choose the Land of Smiles to set up their production hubs in the region, particularly those who make pick-up trucks and for car brands that originated in Japan.

Subaru is one of those that have an assembly factory in Thailand. But soon, that won’t be the case. Tan Chong International Limited (TCIL) has filed an announcement with the Hong Kong Stock Exchange that they are phasing out their existing Complete Knock Down (CKD) business model, and will transition to solely distributing Completely Build Up (CBU) Subaru units from Japan.

In other words, Tan Chong Subaru Automotive Thailand (TCSAT) will cease assembly by the end of the year. This makes TCSAT the second Subaru assembly plant that will cease production in the region as Tan Chong no longer makes Subaru vehicles in the Malaysia assembly plant.

For the unfamiliar, TCIL is the exclusive distributor of Subaru vehicles for many countries in the ASEAN region, including the Philippines. TCIL is the parent company of Motor Image Pilipinas.

TCSAT was a joint venture between TCIL and Subaru Corporation that’s located at the Lat Krabang Industrial Estate just outside of the capital of Bangkok. Inaugurated in 2019, TCSAT was the first major dedicated Subaru assembly plant in Southeast Asia. At its maximum capacity, TCSAT can produce 100,000 Subaru vehicles annually.

While TCIL disclosed the reason as a “proactive business transformation” to HK Stock Exchange, the Subaru distributor, according to reports, has been experiencing continuously declining sales in Thailand which may have led to the plant closure. Moreover, reports also say Tan Chong Motor Holdings Bhd is apparently in a tight financial situation after posting four consecutive years of net losses.

So what does this mean going forward for Subaru, particularly in the Philippine market?

Glenn Tan, the Deputy Chairman and Managing Director of Tan Chong Limited, previously confirmed that the next-generation Forester will be sourced from the Thailand assembly plant when it arrives in 2025. But with the impending closure of that factory, that leaves Motor Image Pilipinas with no other choice but to source out the Forester once again from Gunma in Japan.