Next-Generation Subaru XV for Philippine Market May Be Assembled in Thailand

Glenn Tan, Deputy Chairman and Managing Director of Tan Chong International Limited (TCIL) says that there’s a possibility that the next-generation Subaru XV could be assembled at the newly-inaugurated 100,000-square meter facility located in Bangkok Thailand’s Ladkrabang Industrial Estate.

Speaking at the opening of the Tan Chong Subaru Automotive Thailand (TCSAT) assembly plant, Mr. Tan revealed at the THB 5 billion (~P 8.1 billion) has a maximum annual capacity of 100,000 units and the capability to assemble 4 different models. Currently assembling the fifth-generation Forester for the Thailand, Malaysia, Vietnam, and Cambodia markets, Mr. Tan says that as the production ramps up, they’ll then focus on what potential second model they’ll assemble there.

Currently, the Subaru XV is available either as a completely built up unit (CBU) from Japan or assembled at the Tan Chong Motor Assemblies Sdn. Bhd (TCMA) in Malaysia for the Malaysia and Thailand markets. Unfortunately, production constraints there mean there’s a cap of just 500 to 600 units annually, far below the requirements of Motor Image which markets and distributes the Subaru brand in 10 countries.

“We have not made any final decision yet as to moving the production of the Subaru XV over to TCSAT,” says Mr. Tan. “However, the next-generation Subaru XV [previewed by the VIZIV Adrenaline Concept] will be out in three (2022) or four (2023) years’ time. Given we need about 24 months to move production to another location, we should have news for you even before the all-new Subaru XV comes out.”

In the Philippines, the Subaru XV, like all other Subaru models are imported from Japan. Given its size and importance to the Motor Image Group, Mr. Tan says it’s too risky to shift sourcing to TCSAT immediately. But as the assembly plant becomes more accustomed to assembling both left- and right-hand drive models, he doesn’t see why the Philippines could be a candidate for a CKD model.

In fact, if Subaru is able to shift production of the Subaru XV over to Thailand, this could have a positive effect on sales. In countries where the CKD Forester is sold such as Thailand and Vietnam, it has already resulted in record sales figures. At the Bangkok International Auto Show for example, there has been strong consumer interest for the all-new Forester and over 100 cars have already been delivered to customers there.

According to Mr. Tan, Subaru’s decision to enter into a joint-venture with the Tan Chong group is all part of the Japanese carmaker’s thrust to expand its presence in the Asian region and lessen its dependencies on markets such as North America, which currently accounts for 65 percent of Subaru’s global sales.

“Subaru is the only Japanese carmaker not to have any assembly facility in ASEAN. Now, they’ve begun to realize the importance of having an assembly presence in the region,” says Tan. “The establishment of TCSAT allows Subaru and Motor Image to respond and meet consumer demand in the region, enabling us to localize our products and widen our product line-up.”

Meanwhile, for Subaru, having the additional assembly footprint can alleviate pressure at the carmaker’s manufacturing plants in Japan which have resulted in a string of safety-related data falsification and recalls.