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Volkswagen has moved its ASEAN purchasing office from Kuala Lumpur to Thailand, the Bangkok Post reports. The new unit will be up and running in August at Scania’s assembly plant in Samut Prakan.

The decision to relocate to Thailand is a simple business one, as the Land of Smiles is home to about 700 companies that are suppliers to VW, compared to 200 in Malaysia, explained Noshir Desai, GM for procurement at VW’s ASEAN regional office.

VW shipped 136 million euros worth of auto parts from ASEAN to Wolfsburg last year, up 21%. Half of that total came from Thailand. This move puts VW closer to the majority of its vendors in the region. The European giant has operations in four countries in ASEAN – Thailand, Malaysia, Indonesia and the Philippines.

The VW exec declined to give an update on future projects such as Thai eco-car development. VW was one of 10 applicants for the scheme, and the Kingdom’s Board of Investment had already approved the bid before it was hit by the “dieselgate” emissions-cheating scandal late last year.