Volvo Nissan Dispute Halts Truck Production

An industry source said Hong Kong-listed Tan Chong International, the owner of Nissan Diesel Thailand, was reluctant to produce and distribute the trucks in Thailand because it wanted to shift its focus to Mitsubishi Fuso trucks. The company took over Fuso operations in Thailand from Mitsubishi Fuso Truck and Bus Corporation (MFTBC) earlier this year.


Nissan Diesel Thailand Co is the licence holder to assemble and distribute trucks in the Thai market and its licence, granted by the Volvo subsidiary UD Trucks, is believed to expire in one or two years.


Production of all models at the Nissan plant has been suspended. Therefore, the only trucks available are those left in inventory.


The takeover came after Germany’s Daimler AG, which held an 85% stake in MFTBC, announced it was shutting down the Fuso plant in Thailand to revamp MFTBC.


Tan Chong International said it would continue to run the Nissan Diesel truck business even after acquiring the Fuso truck interests.


Furthermore, the source said Nissan Diesel Thailand was suing Sweden’s Volvo Group in Thailand for 10.5 billion baht (241 million or $324 million) in damages for unlawfully terminating two contracts.


AFP quoted Volvo’s annual report as saying that Nissan Diesel Thailand filed suit last November against the company and three of its employees, claiming its actions had led UD Trucks to “unlawfully terminate two agreements” with the distributor.


“Volvo considers that the plaintiff’s claim is of no merit,” the annual report said.


Par Aronsson, a spokesman for the Swedish company, was quoted as saying it was “quite common” that agreements with dealers “are terminated after we have made a purchase, in this case after we [in 2007] purchased Nissan Diesel”, which has since changed its name to UD Trucks.


Akradech Wongpituchroj, managing director of Siam Sun Auto Sales, a Nissan Diesel truck dealer in Ratchaburi, said trucks had not been available for sale since early this year despite complaints to Nissan Diesel Thailand that have gone unreturned.


After being named as a dealer in late 2008, Siam Sun began constructing a showroom and after-sales service centre costing about 40 million baht excluding land and inventory costs.


Construction of the after-sales service building is complete but the showroom is only 50% finished.


“We are in no hurry to complete the showroom since we have no trucks for sale,” said Mr Akradech.


Siam Sun has sold 60 Nissan Diesel trucks since it was appointed as a dealer.


It currently sells Fuso trucks, but he admitted the brand image of Fuso is inferior to Nissan Diesel.


Chanin Chailarpyos, president of UD Saraburi Motor Sales, a Nissan Diesel dealer in Saraburi, said supplies of only some models were in stock at Nissan Diesel Thailand.


To survive, the company is concentrating on selling and servicing used Nissan Diesel trucks, he said.


 

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