Current state of Thailand Automotive Industry

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One group which has not been afraid to grasp the industry nettle is the Automotive Focus Group (AFG) and with some shop floor retrenchments recently, just how much further down can the Thai automotive industry go?

The AFG looked at the current industry trend and comparison to other industries – is this issue automotive or national across all industries?

AFG members and guests at the discussions.
AFG members and guests at the discussions.

Is investment into Thailand Industry still attractive? Is ASEAN growth in other countries impacting on Thailand? Vietnam springs to mind.

Will the competition between suppliers in the marketplace lead to a decrease in numbers? Who will survive?

All very much thought provoking topics with some very well experienced panel members in Frank Holzer, Dennis Meserol, Frank Weiand and Richard Jackson as moderator.

Some very salient points came from Dennis’ statistics, showing that the down-turn in industry in Thailand was real and not imagined. Whilst tourism was up, with much government stimulus, the auto industry in all tiers was decidedly down.

The factors that had produced this were discussed which included the disastrous 100,000 baht rebate for first car buyers, who were then unable to service the debt!

The Takata air-bag failure fiasco has many manufacturers unsure of the future, but is not something the industry here can do much about.

The domestic output has fallen from 1.4 million in 2012 down to 0.7 million in 2015, this being a reflection of consumer demand, which in the face of the enormous personal debt will not turn around any time soon.

Foreign Direct Investment (FDI) has also fallen, now down to 20 percent with instability following the coup partly responsible.

When looking at the global position, nobody felt they had the answer, but the feeling was “Diversify” noting that the industry in some other countries are receiving incentives to use the spare capacity in their plants with some lateral thinking.

It was a most interesting meeting, with the discussions going long into the evening as 43 AFG members looking at future possibilities.