IT was not exactly a surprise, but Japan's top four car-makers were not amused by last month's announcement by General Motors (GM) that it would spend up to US$750 million in the next three years to build 100,000 passenger cars a year in Thailand for export throughout Southeast Asia.
The GM announcement was the biggest challenge yet to Japan's dominance of Southeast Asia's biggest and fastest-growing car market. Japanese companies and their Thai associates built more than 80 per cent of the 570,000 vehicles sold in Thailand last year.
GM's entry could also force Japanese companies to start rethinking their entire strategy in the Asean (Association of Southeast Asia Nations) region.
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.