Automotive Sector

An Expert's View about Automobile in Thailand

Posted on: 28 Dec 2012

There are business opportunities to be won in the automotive sector in Thailand, as the industry continues to grow despite the global financial crisis.

Automotive Sector In Thailand Thailand will reach another milestone in its vision to become the Detroit of Asia in 2012 when the total automobile production volume exceeds 2 million vehicles. This should make Thailand a top 10 country in the world, for automotive manufacturing. Market overview There are currently 16 car makers and 7 motorcycle makers in Thailand. Virtually all of the world’s major automakers are represented in Thailand. They have a combined production capacity of 2.4 million vehicles. It is estimated that together they will produce over 2.2 million vehicles and over 2.5 million motorcycles in 2012, an increase of 51% and 22% respectively from 2011. Thailand is the leading manufacturer of one-ton pick-up trucks outside the United States. Thailand also exported over £7 billion worth of automotive parts in 2010, an increase of 33% over 2009. In recent years, the automotive industry accounted for 12% of the overall gross domestic product (GDP). It is one of Thailand’s largest industry clusters, employing more than 700,000 people. In addition to the major automakers, Thailand is home to 2,400 auto-parts makers, of which 690 are Tier 1 and around 1,700 are Tier 2 & 3 suppliers. Major players, such as Toyota, Yamaha, Bridgestone, Honda, Maxxis and Michelin, have established testing and R&D facilities in Thailand. Key opportunities There are business opportunities to be won in the automotive sector in Thailand, as the industry continues to grow despite the global financial crisis. Some of the opportunities are in the following areas: NGV Initiatives With energy costs on the rise, the Thai government is looking to alternative fuel as the answer. There is a requirement to replace aging diesel-powered bus fleets in Bangkok with new compressed natural gas powered bus. The Ministry of Transport is planning to acquire 4,000 such buses. New technology vehicles As part of the Thai government’s efforts to attract automakers to shift their production of higher fuel efficient technology, such as hybrid drive and regenerative braking system, traction motors, to Thailand, the Board of Investment is offering maximum investment incentives, which include exemption of import duty on machinery and corporate income tax holidays of between 5-7 years. Auto Parts Industry Given the market size and the limited number of producers for some of the automotive products such as automatic transmissions, continuously variable transmissions, electronic stability control system and automotive electronics in Thailand, the market appears to be open to new overseas suppliers. There are opportunities for UK automotive parts manufacturers to invest and supply parts to the automakers in Thailand. Future Trend Thailand is looking to develop 3rd product champion, following on from one-ton pickup trucks and eco cars. The focus will be on eco-friendly cars, such as hybrid, plug-in hybrid and/or electric vehicles. Two organisations in Thailand have already initiated pilot charging stations to study and collect data on the use of electric vehicles in Thailand. Although, this is still at the very early stages of development but there should be business opportunities in the future in this area, such as charging station, battery technology etc Latest export opportunities in the automotive sector Latest export opportunities in Thailand Getting into the market Although Thailand offers good business opportunities, this does not mean that Thailand is the right market for every company. Initial research is crucial to assessing your prospects. Thais like to build relationships with potential business partners, so it is not a market where you are likely to send a few brochures and wait for the orders to roll in. But for those ready to do the initial research and develop relationships with Thai companies, the opportunities are clearly there. It is very important that British companies appear to have a local presence in Thailand, either through local representatives, a representative office, or joint venture companies. Such a presence shows that British companies are serious about the market and are willing to provide local technical support to their partners and customers. The Thai market is still price-oriented. Technical support is the second most important issue after pricing. How to Do Business When visiting Thailand, research the market and the companies you intend to contact. ξ Many Thai companies have websites - some in English. Much information is therefore readily available on both government and corporate websites. ξ Plan your visit - organise appointments before you depart the UK. Follow up with telephone calls on arrival to confirm availability. Meetings can be arranged over breakfast, lunch or dinner. ξ Arrange a market discussion with the relevant Commercial Officer at the British Embassy in Bangkok. ξ Take plenty of business cards and corporate literature. ξ Follow up meetings by letter/e-mail on return to the UK. If possible, keep the Embassy informed of progress. ξ Do not expect to do business immediately or necessarily on the first visit to Thailand. ξ Think about intellectual property rights issues. ξ Get professional legal advice on setting up a local company and research business partners thoroughly. Due diligence investigations are strongly recommended. This websites also offer useful guidelines to doing business in Thailand: The Board of Investment - More about doing business in Thailand Contacts Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits through our chargeable Overseas Market Introduction Service (OMIS). To commission research or for general advice about the market, get in touch with our specialists in country - or contact your local international trade team. ξ Attakorn Saropala, British Embassy Bangkok. Tel: +66 (0)2305 8237 or email: ξ Wannarat Charoensri, British Embassy Bangkok. Tel: +66 (0)2305 8286 or email: Contact your local international trade team UKTI Events UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows. Latest events in the Automotive sector Major Events Automotive Manufacturing 2013 Date: 20-23 June 2013 Website: Bus & Truck 2013 Date: November 2013 Website: Useful links More about OMIS and other UKTI services for exporters
Posted: 28 December 2012

See more from Automobile in Thailand

Expert Views    
Automotive opportunities in Thailand   By UK Trade & Investment
Automotive Opportunities   By UK Trade & Investment
Automotive Sector   By UK Trade & Investment
Presenting the contributor