Thai auto exports will counter sluggish domestic sales

As Southeast-Asia’s leading car-manufacturing exporter, Thailand is all set to increase its production of cars and light commercial vehicles from 1.9 million in 2014 to 3 million by 2024. Despite that, domestic sales remain low due to tighter credit and weak purchasing power. Will Thailand’s auto sector still maintain its competitive edge? Japnit Singh, Senior Director at Spire Research and Consulting, shared his insights in China Daily – Asia Weekly.

Despite frequent political unrest, Thailand is home to 18 of the biggest names in global car manufacturing. This has enabled Thailand to establish a solid car ecosystem and sustained momentum for the sector’s growth. Singh pointed out that this network of global brands is strengthened by a network of local Small and Medium-sized Enterprises (SME’s) coupled with abundant supply of skilled labor force and favorable excise policies.

Singh noted that exports will help counter low domestic sales which occurred primarily due to the first-car subsidy program introduced in 2012. This had artificially inflated sales figures which later contracted when the program was withdrawn.

Moreover, investments will continue to flow in due to Thailand’s strategic location. Thailand enjoys ASEAN market access and logistical proximity, not just for the auto sector but across other manufacturing sectors such as electronics.

The government has also put in place an auto-friendly regulatory regime for manufacturers by expanding the permissible shareholding for foreign investors. Furthermore, investments in manufacturing continue to flow in from big brands such as Mazda, Nissan, Honda, General Motors (GM), Toyota and Mitsubishi, to name a few.

Thailand is also striving to become a green auto-hub, tapping on rising demand for fuel-efficient cars in Europe, North America and Asia.

https://www.spireresearch.com/newsroom/media/thai-auto-exports-will-counter-sluggish-domestic-sales/

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