Mr. Shudo (left) consulting with Mr. Wakiya, in the showroom on the first floor of the building where SMC has its office. (Bangkok)

"A director in charge of overseas sales has dispatched himself here?" The other Japanese carmakers operating in Thailand and coping with the burden of sluggish sales in the wake of the recent currency crisis were surprised. As Auto Alliance Thailand (AAT) gears itself up for its start-up, Toshio Wakiya, 57, Director and General Manager of the Overseas Sales Division, took office in Thailand on April 16 to serve concurrently as the President of Sukosol and Mazda Co., Ltd (SMC), a Mazda distributor in the country.

In the President's office on the second floor of a building in the central part of Bangkok, a map of Thailand bristling with small pins hangs on the wall. The pins indicate the locations of 138 shops of 75 local sales dealerships trading with Mazda. "Perhaps the move was made because the company believes that to increase sales in Thailand is the most important task in our global strategy, along with the AAT start-up." As it was about a personnel change involving none other than himself, Mr. Wakiya was not too forthcoming in explaining the reason he was dispatched there. But when it comes to SMC management policy, he is unequivocal. Improvement in customer satisfaction and in restructuring the dealership network were cited as the most important issues.

In the segment of one-ton-class small trucks produced at AAT, Thailand is the world's second largest market, after the United States. Up until the currency crash last July, 400,000 to 500,000 units were selling each year. Japanese carmakers dominate the top positions in the market. Mazda, whose small truck sales account for 69% of its total sales, is competing neck and neck for third place in the Thai market. Mr. Wakiya's installation as SMC President shows how intent Mazda is about increasing its market share, building on the momentum of the AAT start-up.

The Thai economy is still bogged down in confusion in the wake of a currency crisis. The unemployment figure topped the 2 million mark, closing in on the Japanese figure of 2.77 million, although Japan's total population is almost twice as large. Automobile sales, which stood at 590,000 in 1996, were down by 40% to 360,000 in 1997.

"It is true that sales have picked up slightly. But we have a long way to go," says Tsuneyuki Shudo, 56, who took office in August last year as Vice- President. "Our efforts are the key in getting production at AAT on track. Although the economic situation is really tough, that serves as no excuse," said Mr. Wakiya with determination. His statement echoes the willpower of Mazda, which is stronger than Ford on the sales front in Thailand.

Although Mazda and Ford plan to export cars produced at AAT, the bulk of approximately 10,000 units to be manufactured this year will be marketed in Thailand. The ratio of cars produced at AAT for each company will be determined by the sales of each brand. While Mazda and Ford join hands in production, they are rivals when it comes to sales in the market. They share the chassis but their products have different exterior designs. "How many trucks can we and can they sell? The design of each model is the fruit of tremendous brain storming by the development team of each company. In that sense, we are actually competitors as well," they say in chorus. To increase the market share will serve as a way to demonstrate Mazda's development capabilities and ultimately to maintain Mazda's identity.

"True, Thailand is now in confusion, but the fact that it is the main market in Southeast Asia has not changed. The market there will recover slowly in a couple of years." Gary Hexter, 53, Managing Director in charge of corporate planning, who has taken the lead at Mazda to develop business at AAT, casts intent eyes on the future development there. "We have finished setting numerical targets for producing profits, including costs and sales volume," he said. "Once we succeed in selling the target number of units, we can enjoy profits."

Mazda is to engage itself in a sales competition in Thailand in a tough economic environment, with even Ford among their competitors, although the carmaker is a partner in their joint manufacturing venture. Mr. Wakiya, who has been too busy even to put his room in order since he arrived there, said, "The success of AAT ultimately hinges on sales volume. I am feeling tremendous pressure."