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Thailand’s Auto Parts Suppliers: from regional to global players

Over the past 5 years Thai exports of auto parts have shown strong growth of 4%, higher than the 3% growth in of global car demand during the same period.

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Over the past 5 years Thai exports of auto parts have shown strong growth of 4%, higher than the 3% growth in of global car demand during the same period.

Particularly during the first half of 2017, Thailand’s auto part exports totaled USD 7 billion, up 12% from the first half of 2016.

Major trading partners were the world’s large automotive producers, such as Japan, the U.S., and emerging markets in which domestic production surged but still lacked production capabilities for several key parts. Therefore, those countries (Indonesia, Mexico, India, South Africa, the Philippines and Vietnam) must rely on importing auto parts from Thailand.

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  • During 2012-2016, Thai auto parts exports grew in line with 4% growth in global car demand. Exports to new auto producing countries performed particularly well, such as Indonesia, Mexico, India, South Africa, the Philippines, and Vietnam. In 2016, power-train parts registered the highest growth ever of 15% compared to the previous year, followed by 6% growth in electronics and body parts.
  • EIC suggests Thai part producers consider investment plan in countries where automotive production is growing but the ratio of parts producers to auto makers is still small. This will capture business opportunities in emerging markets like Mexico, India, Indonesia, the Philippines, and South Africa. Moreover, businesses can further develop their products to be more competitive in existing markets to expand to new auto producers.

 

Accounting for 40% of auto part exports, power-train exports surged 15% in 2016 compared to last year the previous year. Exports of electronics and body parts grew 6%, while suspension parts rose 4%.

In terms of different types of exports, auto parts with showing the highest growth were power-train parts, such as gear sets, that grew more than 60% every year on average during 2012-2016.

Second highest growth was diesel engines, which expanded over 13% during the same period. Exports of gear sets and diesel engines in 2016 amounted to USD 2.3 billion.

Moreover, higher auto parts exports were also observed in the electronics, suspension, and body categories, namely LCD sets, break sets, and engine accompaniment with 15%, 12% and 5% growth in 2012-2016, respectively. Growing exports of auto parts was concentrated in high-valued products and reflected Thailand’s capacity and key role in the region’s automotive industry.

Thailand is one of the world’s key auto part makers

In addition, automotive companies regard Thailand as one of the world’s key auto part makers and established centers to source and distribute auto parts to all areas of the world.

Toyota set up such center in 2007, while Mazda and BMW followed in 2015 and 2016, respectively. In addition, investment in research and development by automotive companies contributed to the continuous advancement of Thai automotive industry.

Thailand is equipped with an extensive supply chain of over 2,000 car and part producers. Growth in Thailand’s automotive industry certainly enabled the country to become the world’s 15th largest exporter of auto parts and the largest ASEAN exporter for 10 years.

EIC sees the growth of the automotive industry in Thailand’s trading partner countries as an opportunity for the Thai auto parts industry, especially for new producers such as Mexico, India, Indonesia, South Africa, and the Philippines.

Car production in these countries is growing faster than global rates and there are fewer than 50 part makers per each car maker. In Thailand, the ratio is around 95. Such countries are likely to import parts from other producing countries like Thailand, Japan, and Germany.

Despite their lower growth, Thailand’s main trading partners like Japan, the U.S. and Malaysia account for over 30% of total exports. Thailand’s auto parts industry will definitely benefit from growth in the automotive industries in these countries.

Author: Nantapong Pantaweesak and Phankawee Mukdaprakorn

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Economics

Thai fruit exports to FTA markets up 107 percent

China, Malaysia, Singapore, Indonesia, the Philippines, Hong Kong, Australia and Chile are top importers of Thai fruits, especially fresh durian, mangosteen, longan and mango. Thai exporters are able to benefit from FTA privileges.

National News Bureau of Thailand

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BANGKOK (NNT) – Thailand’s fruit exports continue to increase, despite the sluggish global economy caused by the COVID-19 pandemic, with key trade partners being countries that have free trade agreements (FTAs) with the kingdom.

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50:50 campaign may not get immediate extension

National News Bureau of Thailand

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BANGKOK (NNT) – The government’s 50:50 co-pay campaign expiring on 31st March may not be getting an immediate campaign extension. The Minister of Finance says campaign evaluation is needed to improve future campaigns.

The Minister of Finance Arkhom Termpittayapaisith today announced the government may not be able to reach a conclusion on the extension of the 50:50 co-pay campaign in time for the current 31st March campaign end date, as evaluations are needed to better improve the campaign.

Originally introduced last year, the 50:50 campaign is a financial aid campaign for people impacted by the COVID-19 pandemic, in which the government subsidizes up to half the price of purchases at participating stores, with a daily cap on the subsidy amount of 150 baht, and a 3,500 baht per person subsidy limit over the entire campaign.

The campaign has already been extended once, with the current end date set for 31st March.

The Finance Minister said that payout campaigns for the general public are still valid in this period, allowing time for the 50:50 campaign to be assessed, and to address reports of fraud at some participating stores.

The Fiscal Police Office Director General and the Ministry of Finance Spokesperson Kulaya Tantitemit, said today that a bigger quota could be offered in Phase 3 of the 50:50 campaign beyond the 15 million people enrolled in the first two phases, while existing participants will need to confirm their identity if they want to participate in Phase 3, without the need to fill out the registration form.

Mrs Kulaya said the campaign will still be funded by emergency loan credit allocated for pandemic compensation, which still has about 200 billion baht available as of today.

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