Since the early 1980s, companies such as Toyota and Nissan have gone along with the 'national production' policies of the big four Asean nations - Thailand, Indonesia, the Philippines and Malaysia.

The result has been the growth of a series of medium-sized, high-cost domestic vehicle assembly industries in which the Japanese typically hold dominant positions, though this could change after 2000, when tariffs on motor vehicle trade within the region will be rapidly lowered.

The idea that the Asean nations may be shifting from a system based on 'national cars' to a more competitive, globally oriented system is not popular in Indonesia and Malaysia, where assembly industries have been nurtured by tax incentives and restraints on entry to the industry.

Senior executives at Mitsubishi Motors Corp, the Malaysian Government's partner in the Proton national car venture, said that Proton's future depended on achieving international competitiveness early in the next century.

Whether or not the GM venture precipitates a change in the way cars are built in the Asean region, experts agree that competitive pressures are likely to increase sharply. This is particularly the case in Thailand, where there are already 11 separate assemblers.

The Thai motor industry almost certainly is headed for a shake-out, suggested Yuichi Takayama, head of research at Gendai Advanced Studies Research Organisation.

That is despite the fact the domestic market is likely to grow from 570,000 vehicles in 1995 to between 700,000 and 800,000 by 2000.

Increasing competition in Thailand - and in other relatively open markets such as the Philippines and Taiwan - means it was becoming increasingly important for the Japanese vehicle-makers to try to fit their Asian operations into a broader global strategy, another analyst suggests.

So far, only one company seems to have begun doing this. At the end of 1995, Mitsubishi announced a plan to export from a new plant in Thailand 60,000 pick-up trucks a year, starting in July 1996.

Mitsubishi general manager for Asean, Yoshifumi Kawashima, said the company had adopted an export strategy in Thailand because its share of the domestic Thai market was too small for it to be able to compete successfully against Toyota and Nissan, the dominant companies there.

Mitsubishi is the fourth-ranked Japanese vehicle-maker and holds a modest 10.3 per cent share of the Thai market against Toyota's 27 per cent.

While Mitsubishi hopes to lower the costs of its Thai assembly venture by creating a global export market, companies such as Toyota, Nissan and Isuzu have stuck to serving the individual Asean nations through domestic assembly operations while cutting costs by sharing or standardising components. Nissan, however, plans to start exporting pick-ups from Thailand before the end of the decade.

Toyota is said to have been particularly successful in exploiting a brand-to-brand complementing scheme, which allows manufacturers with assembly operations in different Asean countries to import components from within the region at reduced tariff rates.

Toyota plans to use a region-wide parts distribution system as the basis for building a new so-called affordable family car, which will go on sale throughout Asean and in several other Asian markets at the beginning of 1996. The car will have a higher percentage of Asean-made parts and will cost less than cars now being turned out by Toyota assembly plants in Thailand, Indonesia and the Philippines.

Analysts in Tokyo, however, said there was a limit to how far the process of cutting costs through standardisation of parts could go.

The general manager of a Tokyo-based think-tank that specialises in studying the future of the world motor industry said that, in the end, Japanese manufacturers might be forced to seek economies of scale by building world-scale assembly plants in countries such as Thailand and the Philippines. Once that happens, the Asean motor industry will have come of age as one of the world's leading production centres.

The GM venture in Thailand is not the only challenge to Japan's supremacy in the Asean market.

For the past two years, Korean manufacturers have been offering sub-compacts in Thailand, the Philippines and Indonesia that undercut Japanese cars by a wide margin.

South Korea's strategy appeared to pay off early this year, when Kia Motors was picked in Indonesia as the partner in a heavily subsidised national car project that will be headed by a son of President Suharto.

However, Japanese manufacturers seem less worried by the South Korean challenge than by long-term structural changes in the Asean car industry that could be precipitated by trade liberalisation.

One analyst said: 'There is very little doubt that Southeast Asia is going to be one of the most exciting growth areas for the world motor industry over the next decade.

'What is doubtful is whether Japan can maintain the lead it built up when the industry was still in its formative stages.'