the cat

Will Thailand Stay on Top of the Southeast Asian Auto Industry?

Auto Industry

I’ve been looking at market news and wondering if Thailand will be able to maintain its position as the leading auto manufacturer in the region.

The Federation of Thai Industries Auto Club released numbers that show car exports from January to March this year down nearly 6 % compared to the same period in 2021.

Thailand still produces the most motor vehicles in ASEAN. But Indonesia is not far behind, with production growing at a faster rate.

I don’t know if Thailand will keep its reputation as ‘The Detroit of Southeast Asia’ – the Thai economy is not being touted as the ‘Tiger’ of Southeast Asia anymore. I don’t know if market conditions will improve, if the drop in exports will be temporary, or if the supply chain will see more disruption.

I do know for sure that EVs are the future of the auto industry. The ability of Thai manufacturers to adapt their operations to EV production now will determine their success in the future.

This report explains how the Thai government plans to boost EV production to 30% of all vehicles produced in Thailand by 2030. And how Indonesia will be a formidable player in the EV market, due to strategic advantages and market demographics.

We all want a more sustainable future, and EVs have a big role to play. The shift to EV production, will be disruptive. I worry about the impacts on the local economy. Phasing out internal combustion engines will risk thousands of parts-manufacturing jobs in the short term. The investment required for new EV production facilities is huge, and involves many stakeholders. It may not benefit SMEs; I am concerned it will cause a lot of small businesses to shut down.

Thailand may be losing its edge in auto manufacturing over Indonesia, Vietnam and other neighbours. But what’s more disruptive, and what we should be more focused on, is the race to be the leader in EVs.