BANGKOK, Thailand – Kasikorn Research Center has warned that U.S. import tariffs, aggressive expansion by Chinese automakers, and tighter environmental and safety standards among trade partners are challenging the competitiveness of Thailand’s automotive industry, requiring urgent adaptation.
Dr. Rujipan Assarat, Assistant Managing Director at Kasikorn Research Center, noted that while Thailand exports a relatively small portion of vehicles to the U.S., Section 232 import tariffs could indirectly affect Thai auto exports worldwide. Major producers from Japan and South Korea may redirect exports to other markets to reduce reliance on the U.S., intensifying global competition. Directly, the tariffs impact Thai auto parts exports to the U.S., which account for around 26% of total parts exports, although Thailand retains advantages in small tire production and enjoys exemptions under Section 232 Import Adjustment Offset for about 12% of parts exports, more than Japan’s 3%.
Hathaiwankul Tungkatheerakul, Senior Research Officer, highlighted that Chinese automakers’ aggressive pricing strategies are eroding market share for Thai manufacturers both domestically and internationally, especially as consumers increasingly favor Chinese electric vehicles. Meanwhile, Australia, a key export market for Thailand, has tightened CO2 emission and braking system standards from 2025, boosting demand for hybrid vehicles (HEV and PHEV) but pressuring traditional internal combustion engine (ICE) vehicles that Thailand mainly exports.
Dr. Krit Sitathanee, Assistant Managing Director, said Thailand’s accelerated Net Zero target by 15 years requires the transport sector to increase production of battery electric vehicles (BEVs), which currently make up only 1.2% of the total vehicle fleet. While 65% of listed parts manufacturers have yet to set greenhouse gas reduction goals, larger companies are beginning to adapt.
Kasikorn Research recommends that Thai auto industry operators adjust strategies to cope with U.S. tariffs, intense competition from Chinese automakers, stricter environmental standards, the shift toward Net Zero, and rising demand for electric vehicles. This includes planning for a decline in ICE vehicle demand, an increase in HEV and PHEV production, and exploring growth opportunities in BEV markets. (TNA)
