Bangkok--29 Jun--Increase Network Agency & consultants
New automotive battery brands are entering the highly competitive market, shrugging off the existing players' trend toward penetrating the replacement market as new vehicle sales slump.
As automobile production shrank starting late last year, battery supplies to car assembly plants followed suit and producers turned to replacement market.
Thai Petroleum & Trading Co (TP&T), the authorised distributor of Pennzoil and States lubricating oils, recently launched TPS Spark, a new battery brand in the local market currently dominated by the GS and 3K brands.
TP&T was not new in the battery market - it once distributed several brands produced by other companies.
"We hired others to make batteries for us for many years but it didn't work since batteries are special products that need extra care or service after sales," said Rittichai Tingthanathikul, executive director of TP&T.
In addition, he said, the company could not develop batteries to suit all different types of vehicles. "We decide to make our own batteries to ensure that we can efficiently service our customers after sales," he said.
Thai Storage Battery Plc, the maker of 3K products, recently predicted the market would be poor this year because of shrinking vehicle production and sales, longer battery life in commercial vehicles, and poor consumer purchasing power - as evidenced by the 17.6% decline in battery output in January and February from the same period last year.
"We also see the fiercer competition, especially as producers who supply assembly plants shift to the replacement market which is the only market destination for TP&T," said Mr Rittichai.
The company's factory in Samut Prakan makes 400,000 to 500,000 TPS Spark batteries a year. TP&T took over the old battery factory in Phra Pradaeng five years ago and spent 200 million baht to renovate it and replace old machinery with new equipment.
TP&T then started producing batteries in small volumes mainly for export markets in Asean and the Middle East, and the rest for domestic market under TPS Champion brand a few years ago. It produced only 80,000 batteries in 2008.
With product development and marketing plans now in place, TP&T started stepping up TPS Spark distribution this year. It prices the batteries around 7-10% cheaper than those of competitors.
Mr Rittichai said TPS Spark was expected to receive a good response, with a goal of selling 120,000 batteries this year worth 200 million baht, rising to 250,000 batteries next year.
The local battery aftermarket is worth an estimated 5 five billion baht a year.
TPS Spark is available in 17 models for vehicles from passenger cars with engine sizes starting from 1,300cc, to light and heavy-duty trucks, large buses and ships. The batteries will be sold equally to domestic and export markets.
In the local market, the batteries will be distributed through 500 dealers and parts shops this year and sales outlets will be doubled to 1,000 next year.
"We assure our dealers and other outlets that we are now serious about battery marketing ... since we have committed to investing substantially in the battery business," said Mr Rittichai.
Overseas, the products will be shipped to Asia, Middle East and Africa.