Important Steps in the Automotive Industry

The automotive industry in Thailand has evolved for more than 60 years, with investments primarily coming from foreign countries, especially Japan. However, in the past decade, many countries have begun transitioning to the electric vehicle (EV), and competition has emerged from Indonesia and Vietnam which have advantages in terms of costs and mineral resources for EV battery production. This situation has raised an important question: how should manufacturers of internal combustion engine (ICE) vehicles adapt to these changes?

It is noteworthy that, The Board of Investment (BOI), reports that in 2024, the automotive and parts industry ranks among Thailand's top five target industries with highest investment value, totaling 102,366 million baht (approx. 3,040 USD) across 309 projects. These include EV and ICE production projects by Japanese, Chinese, and European manufacturers, as well as production of car tires, aircraft tires, intelligent vehicle systems, and other automotive parts.

Thai Government's Approach towards EV Promotion

In 2021, the National Electric Vehicle Policy Board (EV Board) established guidelines to promote Zero Emission Vehicles (ZEV) under the 30@30 policy, targeting ZEV production at a minimum of 30% of total vehicle production by 2030. Currently, the BOI offers incentives covering all EV segments, including batteries and charging stations. In the past 2-3 years, Thailand's EV industry has received over 80,000 million baht (approx. 2,380 USD) in investment, with 18 Battery Electric Vehicle (BEV) production projects having a combined capacity of 400,000 vehicles.

Furthermore, several Chinese EV manufacturers have already allocated their investments in Thailand, including BYD, MG, Great Wall Motor, Changan Automobile, GAC Aion, NETA, Foton, and Omoda & Jaecoo, thus strengthen Thailand's position as a potential global EV production hub.

Three Adaptation Strategies for Thai Auto Parts Manufacturers

LiB Consulting has recommended three adaptation strategies for Thai automotive professionals as follows:

Build cost leadership by maintaining ICE vehicle production while positioning Thailand as a joint EV production base with China under the China + Alpha policy to maintain competitive costs.
Increase production diversity by manufacturing EV parts alongside ICE components to attract new automotive brands and reduce business risks.
Collaborate with private sector and research institutions, both domestic and international, to develop new businesses from existing capabilities, such as MaaS (Mobility as a Service), BaaS (Battery as a Service), and Agtech (Agricultural technology) to support future mobility.

Conclusion

Automakers in Thailand still have opportunities for sustainable adaptation through various strategies, including the adoption of modern technologies and innovations, inter-agency cooperation, and collaboration with overseas cars manufacturers. This will help maintain competitive capabilities and support the transition to becoming a production hub of future vehicles.

Important Steps in the Automotive Industry

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