The Thailand Development Research Institute (TDRI) is warning auto parts supply chain players to prepare for the transition to next-generation cars, saying some components will no longer be necessary for electric vehicles (EVs).
Exhaust pipes and engines; for example, are installed in cars with internal combustion engines but are not needed in EVs.
Research director Kirida Bhaopichitr said manufacturers need to adjust going forward. In particular, Tier 2 and Tier 3 manufacturers are expected to be affected.
“The industry will gradually change 10 years from now and some companies will not survive,” Ms Kirida said. “But the supply chain for automakers or the Tier 1 level can withstand the transition because they will develop new technology in line with the industry.”
She said Toyota’s suppliers in Thailand are preparing new components for hybrid electric vehicles (HEVs). Toyota was granted Board of Investment privileges for the EV scheme last year, with total investment hitting 19 billion baht.
Toyota plans to assemble 7,000 HEVs a year and make 70,000 batteries for EVs, as well as other parts such as doors, bumpers and axles, totalling 9.1 million units.
The government’s drive towards nextgeneration cars will also affect the automotive industry, Ms Kirida said.
The EV project was approved last March, covering the new production of HEVs, plugin hybrid electric vehicles (PHEVs) and battery electric vehicles (BEVs).
Honda and Mazda also announced a joint effort to make HEVs, while MercedesBenz and BMW plan to increase PHEV assembly capacity in Thailand.
A source from the automotive research house said two Japanese firms – Nissan and Suzuki – are expected to join the HEV scheme.
Ms Kirida said EVs fall under the 10 targeted S-curve industries in the government’s Eastern Economic Corridor (EEC) project.
She said the EEC is expected to be one of the main economic engines driving Thailand’s economy over the next 7-10 years.
“After the Eastern Seaboard Development Program was kicked off in 1982, Thailand did not initiate any new [megaprojects],” Ms Kirida said. “That led to a decline in private sector investment in subsequent years.
“Private sector investment accounted for roughly 15% of the country’s GDP, but the Thai economy is relying mainly on exports (60-65% of GDP) and tourism (20%).”
She said Thailand’s EEC project will see competition from China, which is upgrading its production capacity through the Made in China 2025 programme.
China’s policy is focused on building domestic firms in high-tech industries that are globally competitive and similar to the EEC’s targeted industries.
China was the top car producer with 28.1 million units in 2016, while Thailand ranked 12th with 1.94 million cars.
This article is written by Piyachart Maikaew and first published in Bangkok Post on Wednesday, January 31, 2018.
Thailand aims to push its games and content industry
After almost a year under the pandemic, the number of game players in Thailand rose to 32 million and helped the market generate over a billion dollars in 2020, according to NewZoo, an international analytics and market research group.
Thailand’s H1 Investment Applications rise 158% in combined value, BOI says
Japanese firms ranked first with 87 projects worth 42.8 billion baht, followed by investments from the U.S. with 18 projects worth 24.1 billion baht, and China with 63 projects worth 18.6 billion baht.
In the first six months of 2021, Thailand’s investment applications increased 14% from the year earlier period in terms of the number of projects, and 158% in combined value, led by increasing foreign direct investment (FDI) applications, sustained growth in target industries including the electronics and medical sectors, as well as in power generation, the Thailand Board of Investment (BOI) said.(more…)
Can border reopening revive tourism in South-East Asia?
In Thailand, where pre-pandemic tourism accounted for 11-12% of GDP, the country lost an estimated $50bn last year as Covid-19...
Thailand dropped from UK’s tough covid-19 travel ‘red list’
Earlier, Thailand was listed among countries with high infection levels that were put on a ‘red list’, requiring arrivals to...
The ASEAN-Russia Trade and Investment Cooperation Work Program
ASEAN and Russia recently agreed to enhance and widen economic cooperation at the 10th ASEAN Economic Ministers (AEM)-Russia Consultations held...
Flexible Workspace Startup Worklounge Debuts with 20+ Luxury Member Lounges in Thailand
Worklounge launches a premium membership granting remote professionals and executives access to exclusive hotel lounges across Thailand. Their platform is...
5 insights to guide ASEAN’s digital generation in a post-pandemic world
We surveyed 86,000 people from six ASEAN countries about their views for a post-pandemic world. The ASEAN Digital Generation Report...