Thailand’s auto parts industry still going strong despite COVID

Shirley Beal

BANGKOK, March 13, 2023 /PRNewswire/ — Driving each robust community business is a strong community provide chain. This is surely the scenario for Thailand’s automotive sector, which has more than the past 6 decades established the kingdom as the top car creation base in Southeast Asia and the 11th greatest around the globe. Cars and automobile sections rank among the country’s leading exports goods, with the sector earning in 2022 a full of US$37.6 billion of which car elements and accessories accounted for US$15.6 billion, in accordance to Commerce Ministry stats. Main export markets for Thai-produced auto areas include Usa, Japan, Southeast Asia and Australia.    

Successive Thai governments have by very well-described plan directives captivated all the significant Japanese automotive manufacturers to established up regional output and export bases in Thailand along with leading European and US manufacturers such as Mercedes Benz, BMW and Ford, and with them a cluster of sections suppliers. A short while ago, in holding with the government’s local climate and environmental goals, Thailand has persuaded Chinese EV makers to set up their regional creation bases in the kingdom, which include very well-recognized manufacturers BYD, MG and Terrific Wall Motor. Previously, at minimum 50 Chinese EV automobile areas suppliers have also set up offices in Thailand.

There are about 2,200 auto pieces and accessories companies previously primarily based in Thailand, assuring that community output is of substantial-good quality, on-time and eventually, worthwhile. Thailand’s auto sections suppliers have above the a long time develop into an sector unto by themselves, exporting their items to above 100 counties globally. Lots of suppliers cater to the “Right after Current market,” or alternative market, a substantial and trusted market place offered the world’s approximated 1.8 billion utilised-automobile on the streets.

 Among these elements producers, there are close to 500 generally foreign owned corporations, that offer the initial equipment companies (OEM) marketplace section, which in Thailand is dominated by Japanese brand names. Numerous of these international OEM suppliers shifted their output bases to Thailand in the late 1980s, early 1990s, next the relocation of the major Japanese car brands to Thailand, prompted by the appreciation of the Japanese Yen that created Japan dependent export significantly less aggressive.

Thailand managed to capture the lion’s share of Japan’s automotive production relocation in aspect mainly because of its big domestic current market for a single-ton pickup vehicles, which however account for about 50% of domestic revenue. The multipurpose pickup is perfectly suited to Thailand’s agricultural-centered rural parts and for community transportation. The Thai authorities slash excise taxes on the one particular-ton pickup styles, which has assisted to make Thailand the world’s next largest pickup producer. Right after the results of the pickup policy, in the mid-2000s, the federal government released a new tax plan to market tiny, petrol economical eco-autos, which have appear to dominate the domestic market for passenger cars and trucks and are a key export merchandise.

These two schemes have established a enormous domestic and abroad industry not just for OEM pieces, but also for After Marketplace elements, which did properly even throughout the COVID-19 time period, when a lack of semi-conductors hampered output of new auto models.

“Typically, when the OEM market place is not fantastic the Soon after Market place is normally great,” claimed Sompol Tanadumrongsak, President of The Thai Car Parts Production Affiliation (TAPMA). TAPMA has 660 customers, all the greater part Thai owned. 

Though the EV revolution claims to restrict the auto pieces sector throughout the world, considering the fact that EVs use only 1,200 pieces compares with the 30,000 elements utilized in internal combustion motor (ICE) cars, Sompol thinks there is continue to plenty of time to endure and regulate. “EVs are taking off but I do not consider they will achieve 30% of the sector for another 10 a long time, so the Following Industry is even now 70%.”

Resource DITP

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