By Kim Tae-gyu
BANGKOK ― Why can one see few Hyundai cars and branches of the Korea Exchange Bank (KEB) in Bangkok?
Are the two ignoring one of the thriving markets in Southeast Asia for strategic reasons or is there another factor deterring them?
The answer is yes and yes.
For Hyundai, Thailand slaps such high tariffs on imported cars that it can’t afford to export them. Obviously, Hyundai could avert the high levy by opening local factories but has not done so after closing one in 1997.
Some people here point out Thai people’s “long memory” as a plausible cause.
``Midway through 1997, Thailand experienced the currency crisis as the first of the Asian countries. Back then, many corporations packed up and left,’’ said a Korean, who has lived in Bangkok for around 10 years.
``Hyundai departed despite strong requests from the Bangkok administration to stay. Since then, it has found few who are welcoming it back.”
From the perspective of Hyundai Motor, then part of the Hyundai Group that was under the control of the late tycoon Chung Ju-yung, it was a strategic decision that was inevitable in the face of attempts by creditor banks that were also under pressure when Korea became the next victim of the currency crisis.
At any rate, Hyundai’s departure is still remembered by those in the decision-making roles as well as the public, making it difficult for the world’s fifth largest carmaker to come back, the person said.
Thailand’s tariff on imported cars runs up to 80 percent of the car’s price. The only way to avoid it is to manufacture cars here, the method adopted by the Japanese players that dominate the Thailand markets.
When contacted, Hyundai Motor confirmed that it once had an operation in Bangkok, but has since pulled out. Although news reports have said that Hyundai wants to build factories in a Southeastern Asian nation, the firm has denied such reports by saying not a single official agreement has been reached.
``We are currently focusing on niche markets such as light commercial vehicles that include small-sized trucks. We face hitches in the passenger car markets because of the high tariffs,’’ a Hyundai representative said.
Asked whether Hyundai has any specific plan to increase its market share in the passenger car segments, the response was negative. It seems to just hope that Korea signs a free trade agreement with Thailand so that tariffs are jettisoned.
KEB also left Thailand in 1997. The lender has not returned to Bangkok since.
KEB said that it has not gone back to Thailand for strategic reasons. As the Thai markets have little to do with its operations, it has not made efforts to set up a branch there.
Instead, the lender, currently under the control of U.S. private equity Lone Star, said that it has concentrated on other Asian markets such as China and Indonesia.
Korean banks have no presence in Thailand at all even though Asia’s fourth largest-economy operates a total of 127 branches or offices across the globe including Malaysia, Indonesia and Vietnam as of the end of this June, according to Korea’s Financial Supervisory Service.