March 30, 2023

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The Cars Maniacs

Thailand’s auto parts industry still going strong despite COVID

Thailand’s auto parts industry still going strong despite COVID

BANGKOK, March 13, 2023 /PRNewswire/ — Behind each robust regional industry is a sturdy neighborhood source chain. This is certainly the circumstance for Thailand’s automotive business, which has more than the past 6 decades founded the kingdom as the primary automobile manufacturing base in Southeast Asia and the 11th largest globally. Automobiles and motor vehicle pieces rank between the country’s prime exports items, with the sector earning in 2022 a total of US$37.6 billion of which automobile components and accessories accounted for US$15.6 billion, in accordance to Commerce Ministry stats. Key export marketplaces for Thai-created automobile parts involve United states of america, Japan, Southeast Asia and Australia.    

Successive Thai governments have via well-outlined coverage directives attracted all the big Japanese automotive brands to established up regional generation and export bases in Thailand together with major European and US brand names such as Mercedes Benz, BMW and Ford, and with them a cluster of areas suppliers. Just lately, in keeping with the government’s local climate and environmental targets, Thailand has persuaded Chinese EV makers to set up their regional generation bases in the kingdom, such as nicely-known brand names BYD, MG and Terrific Wall Motor. Previously, at minimum 50 Chinese EV auto elements suppliers have also set up places of work in Thailand.

There are about 2,200 vehicle sections and components manufacturers by now dependent in Thailand, assuring that community output is of higher-excellent, on-time and in the end, financially rewarding. Thailand’s car parts suppliers have over the decades come to be an field unto on their own, exporting their products to about 100 counties all over the world. A lot of suppliers cater to the “Immediately after Industry,” or alternative sector, a big and reputable industry supplied the world’s estimated 1.8 billion applied-automobile on the roadways.

 Among these elements producers, there are near to 500 mainly international owned corporations, that source the initial gear companies (OEM) current market phase, which in Thailand is dominated by Japanese makes. A lot of of these international OEM suppliers shifted their production bases to Thailand in the late 1980s, early 1990s, subsequent the relocation of the key Japanese car brands to Thailand, prompted by the appreciation of the Japanese Yen that made Japan based mostly export considerably less competitive.

Thailand managed to seize the lion’s share of Japan’s automotive manufacturing relocation in part due to the fact of its large domestic market for just one-ton pickup vans, which still account for about 50% of domestic sales. The functional pickup is nicely suited to Thailand’s agricultural-dependent rural areas and for public transportation. The Thai governing administration reduce excise taxes on the just one-ton pickup versions, which has assisted to make Thailand the world’s 2nd premier pickup producer. Just after the accomplishment of the pickup coverage, in the mid-2000s, the government released a new tax plan to advertise compact, petrol economical eco-automobiles, which have arrive to dominate the domestic market for passenger vehicles and are a main export merchandise.

These two techniques have made a large domestic and abroad market place not just for OEM pieces, but also for Right after Marketplace parts, which did effectively even throughout the COVID-19 period, when a lack of semi-conductors hampered output of new auto models.

“Normally, when the OEM market place is not excellent the Right after Industry is normally good,” reported Sompol Tanadumrongsak, President of The Thai Auto Sections Production Affiliation (TAPMA). TAPMA has 660 users, all majority Thai owned. 

Whilst the EV revolution promises to limit the automobile areas business worldwide, due to the fact EVs use only 1,200 pieces compares with the 30,000 pieces made use of in internal combustion engine (ICE) autos, Sompol thinks there is even now plenty of time to survive and change. “EVs are taking off but I you should not believe they will attain 30% of the sector for a different 10 decades, so the After Marketplace is however 70%.”

Source DITP