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AUTO Industry
Automotive Industry Overview
The auto industry is Thailand’s third largest industry, making up about 12% of GDP.
Aside from having established itself as Southeast Asia’s automotive hub, Thailand is a global player in the world’s automotive industry, exporting automotive products to 130 countries worldwide. Since its first automotive assembly plant in 1961, the sector’s continuously high growth has made Thailand the world’s largest producer of one-ton pick-up trucks, the seventh largest automotive exporter, and the fourteenth largest automotive producer in 2007, producing 1.3 million vehicles. Ford, General Motors, BMW and Daimler Chrysler, in addition to all the major Japanese manufacturers – Mitsubishi, Mazda, Toyota, Isuzu, Honda and Nissan – have all established presences in Thailand.
In 2008 and 2009, auto industry production and sales have understandably been hit by the US automakers’ financial turmoil, and the drop in demand resultant from the global economic slowdown. Within the sector, rising oil prices in recent years have driven up sales of small passenger cars, even as markets for pick-up trucks contracted.
Strong growth is expected in passenger car sales in Asia, and Thailand is viewed as a premier location at which to base a manufacturing hub. Aside from already having the presence of most key car manufacturers, its central location, ready access to raw materials, and more importantly, its Free Trade Agreements (FTAs) all serve to facilitate and promote Thailand’s role as Asia’s automotive hub. Thailand has FTAs with several countries including Australia and Japan, and ASEAN FTAs with China and India (see Thailand’s free trade agreements, Department of Trade Negotiations for full list and details).
For example, India’s TATA Group is looking to Thailand as its ASEAN strategic business hub (Andhra news article, 4 June 2009).
Within Thailand’s domestic auto vehicles market, Japanese manufacturers dominate, led by Toyota, Honda, and Isuzu. Further information in Automobiles, Bangkok Post mid-year review 2008.