... Pressed Metal Parts. Auto Assembly. Contract Assembl

1
Thai Rung Union Car Public Company Limited SET
Opportunity Day, 8th March 2006
Presented by Sompong Phaoenchoke, Managing
Director
http//www.thairung.co.th
2
Contents

• Introduction
• Scope of Business
• Group Structure
• Industry Overview
• TRU Sales Breakdown
• Future Strategy
• TRUs Performance Prospects for 2006F

3
Scope of Business

• Research Development (RD), Body Design
  Process Engineering
• Tool Die Making
• OEM (Original Equipment Maker) Pressed Metal
  Parts
• Auto Assembly
• Contract Assembly
• Original Design
• Seats Seat Components
• Land Rover Dealer for Greater Bangkok
• After-Sales Service

4
Group Structure
Thai Rung Union Car Public Company Limited TRU
46
30
Delta-TR Co. Ltd. (Joint venture with Delta Kogyo)
Thai Auto Conversion Co. Ltd. (Joint venture with
Toyota Group)

• RD
• Pressed Metal Parts
• Auto Assembly

• Auto Seats Components

• Special Purpose Vehicles

91
91
94
94
Thai Rung Tools Dies Co. Ltd.
Thai V.P. Auto Service Co. Ltd.
Thai Auto Press Parts Co. Ltd. (Amata City,
Rayong Province)
Thai Auto Body Assembly Co. Ltd. (not yet active)

• Dies Jigs

• After-Sales Service
• Spare Parts
• Body Repair Paint

• Specialist Auto Body Maker
• Special Orders
• Government Tenders

Former name Thai Rung General Motor

• Pressed Metal Parts
• Plastic Parts

90
99.53
Thai Ultimate Car Co. Ltd.
TRU Leasing Co. Ltd.

• Land Rover Dealer for Greater Bangkok
• Accessories Spare Parts

• Rental, Leasing and Hire-purchase Finance of
  motor vehicles

5

Thailands Total Vehicle Production and Exports
(1996-2010F)
Sources Actual to 2005 Thailand Automotive
Institute, Forecast TRU

• Thailands total vehicle production rose 21.25
  in 2005 to 1,125,356 units, surpassing the
  million mark a year earlier than targeted. Out of
  this total, 440,715 (39.2) were exported.
• We believe growth will continue over the next few
  years at a lower, sustainable, rate of around 12
  p.a.

6

Total Auto Sales in Thailand (1996-2010F)
Units
1,500,000
1,250,000
Average growth 23.9 p.a.
1,000,000
703,432
626,041
750,000
533,176
589,126
500,000
250,000
144,065
1997
2010F
2003
2004
2005
2006F
2008F
1996
1998
1999
2001
2002
2007F
2009F
2000
Sources Actual Thailand Automotive Institute,
Forecast TRU

• At 703,432 units for the year, new vehicle sales
  for 2005 were up 12.4 on 2004, despite higher
  fuel prices, surpassing most forecasts.
• The Thai auto market continues to grow despite
  worries over the general economy.
• We expect growth to continue over the next few
  years at a lower, sustainable, rate of around 8
  p.a.

7
Total Export Value, Vehicles Parts, 1996 to
2005
Baht millions
300,000
250,000
200,000
150,000
Parts
100,000
CBU
50,000

2005
1996
1997
1998
1999
2000
2001
2002
2003
2004
Source Thailand Automotive Institute

• In 2005, Thailands total CBU exports reached
  440,715 units, 33 up on 2004.
• Total automotive parts exports for 2005 shot up
  by 45.6 compared to 2004, to reach 294 billion
  baht.
• TRU increasingly benefits from rising demand for
  OEM auto parts used in finished auto exports,
  which looks set to continue.

8
Export of Auto Parts from Thailand
Baht millions
100,000
80
,
000
60
,
000
40
,
000
20,000
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Source Thailand Automotive Institute

• Thailands auto parts exports exceeded Bt.91
  billion in 2005, up by an impressive 72.6 on
  2004.
• Despite rising fuel costs and other worries, the
  trend looks set to continue.
• TRUs OEM auto parts sales have started to
  benefit and will benefit further from Thailands
  continuously expanding auto exports.

9
TRU Sales Breakdown 4Q05
Total Sales
Q2/05
Q3/05
Q4/04
Q1/05
Q4/05
847.24
776.05
Bt. millions
879.14
669.00
673.34
16.0
Change QoQ
-14.9
-23.4
-0.6
9.2
Change YoY
-24.9
-22.6
-33.4
-27.8
-3.6
Breakdown Q4 2005

• In Q3 2005 TRUs sales recovered somewhat, thanks
  to sales of taxis and improving parts sales.
• In Q4 there was further growth, largely from
  Service and Other Sales Income, which rose by
  Bt.81m or 71 QoQ.
• TRUs 4Q2005 sales were down by just 3.6 YoY,
  indicating that recovery is under way.

Service Other Sales Income 23.0
Modified Vehicles 17.4
Dies Jigs 3.2
Parts Sales 30.9
Retail Vehicle Sales 25.5
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TRU Sales Breakdown
Both the the fall-off in sales of modified
vehicles and the Companys success in boosting
the OEM Parts area of its business, are reflected
in the changing breakdown of sources of income as
seen below, with Modified Vehicles down from 37
of Total Revenues in 2003 to just 24 in 2005,
and OEM Parts Sales rising to 29 from 9 two
years ago.
Year 2003 2004
2005 Total Revenues Bt.3,326 million
Bt. 3,970 million Bt. 3,050 million
Service Other Sales Income 403 M? 12
Service Other Sales Income 463 M? 12
Modified Vehicles 1,218 M? 37
Modified Vehicles 1,686 M? 42
Service Other Sales Income 589 M? 19
Modified Vehicles 744 M? 24
Retail Vehicle Sales 1,092 M? 27
Retail Vehicle Sales 1,016 M? 31
Retail Vehicle Sales 693 M? 23
Dies Jigs 110 M? 3
Dies Jigs 143 M? 5
OEM Parts 317 M? 9
OEM Parts 875 M? 29
SKD Export 341 M? 10
SKD Export 6 M? 0
Dies Jigs 31 M? 1
OEM Parts 471 M? 12
SKD Export 148 M? 4
Note Retail Vehicle Sales includes some charges
for assembly and fitting of accessories
11
TRU OEM Parts Sales Trend 2003-2005
Mil. Baht
Growth
12
TRU Future Strategy Boosting Parts Business

• TRUs strategy is to continue boost the
  contribution made by parts sales.
• Margins on OEM parts are lower than those on
  modified vehicles, typically not more than 15
  gross for standard pressed parts. However, parts
  orders tend to go with model life, and therefore
  provide stability and volume.
• Opportunities to enhance margins by adding value,
  e.g. by incorporating design elements,
  sub-assembly.
• Greater growth potential given continued
  relocation of multinational automakers to
  Thailand and their increasing use of Thailand as
  an export manufacturing base.
• Automakers expanding production facilities e.g.
  Toyotas new plant at Chachoengsao, Nissans
  production expansion and export plans. TRU will
  boost capacity in order to make the best use of
  all opportunities arising from this growth.
• We have recently imported additional machines for
  Thai Auto Pressparts Co Ltd., the Groups modern,
  purpose-built press plant at Amata City
  Industrial Estate, Rayong.
• We have started selling plastic parts (fenders,
  etc.) made by Thai Auto Pressparts.

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TRU Future Strategy Boosting Parts Business

• OEM Sales team has been strengthened and
  enlarged.
• We have expanded our customer portfolio, adding
  a number of new names including Mitsubishi (2nd
  tier.) We will continue to broaden our range of
  customers.
• Upgrading and expanding die-making facilities at
  Thai Rung Tools Dies Co. Ltd (formerly Thai
  Rung General Motors.)
• Estimated capital expenditure Thai Auto
  Pressparts Bt.500-600m Thai Rung Tools Dies
  Bt.120m., total Bt.620-720m. over the next three
  years.
• The flat deck which we have been making for
  Isuzu for the last few years, has been performing
  very well, with exports running to several
  hundred per month. We aim to maximize this
  further.
• Opportunities for developing new versions of
  flat deck for other pick-up makers, both for
  export and with a view to introducing this type
  of deck to the Thai market.
• We are branching out into new areas of parts
  making - accessories, plastic parts initial
  success of Parto accessories for Toyota
  Fortuner, plans for Yaris accessories, initially
  for Thai market, but with good prospects for
  exports in the future.

14
TRU Future Strategy Modified Vehicles

• TRU will continue to develop and bring to market
  new multi-purpose vehicles, in line with its long
  success story of meeting Thai customers needs
  for comfort, luxury and versatility.
• Update on deliveries of TR Bangkok Limousine
  taxis
• We sold a total of 257 units in 2005 mainly under
  the joint TR-SME Bank project.
• Forecast for 2006 is 800-1,000 units.
• Margins on sales of taxis are similar to those on
  other modified vehicles.
• Medium-term aim is to capture 10-15 of total
  taxi market. There are currently around 80,000
  taxis in operation. By law they must be replaced
  after 9 years, with effect from 2006 (previously
  12 years).
• Since February this year TR Bangkok Limousines
  can be registered as vehicles for hire (green
  plate) which means they can now be sold to
  hotels, car hire companies, etc.

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TRU Future Strategy Contract Assembly

• TRU is one of the very few Thai-owned fully
  integrated assembly facilities.
• TRU has experience in this field, e.g. in the
  past, many years assembling the Isuzu Buddy
  van, and currently, Komatsu excavator cabs.
• TRU is therefore well placed to win assembly
  contracts from newcomers to the Thai market.
• These newcomers are attracted partly by
  Thailands export potential, and by the benefits
  of AFTA and various bilateral FTAs. TRU stands to
  gain from this.
• We are in discussions with such potential new
  foreign entrants.
• In any such agreement we would strive to develop
  a partnership where we could add value by
  utilizing our experience and integrated
  facilities.

16
TRU Retail Vehicle Sales

• In 2005 TUC sold 180 vehicles.
• More than 130 (70) were locally assembled
  Freelanders.
• Sales of Discovery and Range Rover, already
  expensive as CBU imports, suffered from the high
  rates of excise tax applied to larger engine
  vehicles.
• Target for 2006 is 150 vehicles.

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TRUs Performance Prospects for 2006F

• In 2006F TRU will continue to derive a large
  proportion of its sales from modified vehicles
• Sales of the TR Bangkok Limousine will improve
  performance for 2006.
• The Company continues to strive to develop new
  models to meet consumer requirements.
• The PARTS DIVISION will again show strong growth
  in 2006F.
• Parts pressing and sub-assembly at Thai Auto
  Pressparts of Isuzu D-Max chassis frame parts, GM
  Chevrolet Optra body parts, and various Toyota
  parts all continue to grow.
• We plan to develop new versions of the flat
  deck currently made for Isuzu, for sale to other
  makers.
• Komatsu, a long-valued customer, has embarked
  upon an interesting export expansion program in
  which we are playing a meaningful part.
• Thanks to the sustained growth of the Thai auto
  industry, we have won additional stamping work
  from other makers with capacity constraints, and
  continue to seek opportunities of this kind.
• We will continue to broaden our customer
  portfolio.
• We aim to boost OEM parts sales by a further
  25-30 in 2006
• As well pushing OEM parts, we are also moving
  into the field of ACCESSORIES, which offers great
  potential, not only in Thailand but for export
  markets too.
• CONTRACT ASSEMBLY provides interesting
  opportunities which are being explored.