Business Opportunities for Norwegian Companies in Thailand
The Automotive Sector
Thailand’s automotive industry has been continuously developing for over 50 years with strong support from both the public and private sectors. The Kingdom is the largest automotive producer among Southeast Asian countries, one of the top automotive producers in the world, and is now ASEAN’s automotive hub.
The automotive industry is a key industry for Thailand, accounting for approximately 12% of the country’s gross domestic product (GDP). In 2013, Thai automotive production capacity stood at 2.85 million vehicles and the industry employed over 550,000 people. In order to develop Thailand as a global green automotive production base and promote automotive technology research and development, the government coordinated with the private sector to formulate the Master Plan for Automotive Industry (2012-2016). Thailand has approximately 709 Tier 1 auto-parts suppliers and 1,700 Tier 2 and 3 suppliers. More than half of the Tier 1 suppliers are automotive component companies. Of the top 100 auto parts manufacturers in the world, 50% have factories in Thailand. Thailand’s production base is diverse enough to supply all necessary components, from tires to structural components. Major multinational automotive industry leaders with presence in Thailand include: Auto Alliance Thailand (Ford and Mazda), BMW Manufacturing, General Motors, Hino Motor, Honda Automobile, Isuzu Motors, Toyota Motors, Mercedes-Benz Thailand, Mitsubishi Motors, Nissan Motors, Tata Motors, Suzuki Motor, and Volvo Car Thailand.
The Thai automotive industry saw historic growth during 2012 and 2013. Both these years saw Thailand produce over two million vehicles. Thailand’s successful Eco Car Project initiated its second phase in 2013, marking a new phase in the Thai automotive industry. The second phase has attracted investment applications from major car manufacturers including: Ford, General Motors, Honda, Mazda, Mitsubishi, Nissan, SAIC, Suzuki, and Toyota. Phase two projects are investing USD4.3 billion with total production capacity of 1.5 million units. This major shift in the Thai automotive industry offers countless opportunities for parts and components manufacturers as more and more components will be needed to meet the demands of eco-car participants who are rapidly increasing their presence in Thailand. In 2014, global automotive firms increased investments in their Thai operations as Thailand’s automotive industry continues to thrive.