Singapore's interest in restarting a vehicle assembly industry seems to have taken a more serious turn, with a year-long study tasked with, among other things, finding out if carmakers would be keen to set up manufacturing operations.
The Economic Development Board (EDB) has commissioned The Logistics Institute Asia Pacific, a collaboration between the National University of Singapore and the Georgia Institute of Technology, to do the research.
An EDB spokesman said the study ?is meant to explore how Singapore can be more competitive as an automotive transhipment hub and regional parts distribution centre?.
But he added that ?we remain open to the possibility of attracting niche vehicle manufacturing to Singapore?.
Car manufacturers that have been approached by the institute said much of the discussions revolved around the feasibility of starting an assembly operation here.
The head of a major group, who declined to be named, said: ?More than one-third of the time was spent talking about starting up an assembly industry here.
?I get the impression that they really want to do this and that it?s because an assembly operation would attract a lot of first-tier suppliers.?
First-tier suppliers are companies that supply carmakers with major components like engine management systems and gearboxes. Germany?s ZF and America?s Delphi are two that operate here.
But by and large, suppliers here are second- and third-tier companies making smaller nuts and bolts.
The Straits Times reported in 2005 that the EDB was looking to promote industries that were less susceptible to economic cycles. Back then, it was already sounding out major car companies here and had even visited vehicle assemblers in Europe to see if Singapore could revive the thriving business it once had.
Singapore had an auto assembly trade as early as the 1940s. But it wound down in the 1980s when preferential taxes accorded to locally-assembled cars were removed.
Car manufacturers and parts suppliers polled by The Straits Times said Singapore would not be a suitable location for the mass production of cars, but said it could be a venue for more specialised manufacturing.
They also pointed out that they already had production facilities in the region.
DaimlerChrysler?s South-east Asia chief executive, Dr Rainer Thiel, said: ?You need a decent market size. That?s the most important factor. Like in China or India.
?But for intelligent technology, there?s a huge potential. But that?s my personal view.?
Dr Thiel cited the example of fuel-cell cars, ?because now, we can?t buy many parts of a fuel-cell car off the shelf?.
DaimlerChrysler?s director of fuel-cell drive systems development, Dr Christian Mohrdieck, told The Straits Times this week that he was sourcing for a company that could make a new electrically-driven turbocharger for a next-generation fuel-cell car.
?The EDB is helping us look for such a supplier here,? he said.
A Toyota Motor Asia Pacific spokesman said Singapore has ?good infrastructure for logistics and financing?, but it has no plans to set up a manufacturing plant here. The same situation applies to Nissan.
BMW said it does not see Singapore as a place to assemble cars, but its Asian head, Mr Roland Krueger, added that ?we can?t rule out anything...if we see it as necessary, we?ll definitely step into it?.
Mr Andrew Chong, a vice-president with Infineon, a leading maker of automotive semiconductors, said Singapore?s expertise in electronics and precision engineering puts it in a good position to exploit ?a higher segment of the auto industry?. But since cars are ?big, bulky items?, it made sense to make tem near major markets.
Nevertheless, Subaru agent MotorImage ? part of the listed Tan Chong group ? has taken baby steps towards auto assembly.
It recently exported two locally-assembled rally cars to Indonesia. The cars were built at its Toa Payoh facility. The company said it would build around five cars a month, and up to 15 a month ?in the near future?.
It is in talks with the EDB about the possibility of a training grant.
