A sizeable part of the world’s automobile manufacturing, and the parts required for the auto industry happens in Thailand, and in the Eastern Seaboard in particular. The investment in this region is in billions of dollars, not just baht.
The Automotive Focus Group (AFG) invited Chris Bruton of Dataconsult to give a current update of “In the current situation, what are the political, economic and business risks for existing and new investors in Thailand? Despite continuing political turmoil and strengthening of the Thai baht, exports are still increasing. Do the indicators show that this can continue or are new investors turning away from Thailand?”
As always, Chris Bruton’s address was full of the latest reviews of Thailand and its position within the ASEAN nations/SE Asia, and although rating second with its GDP, only ranks fourth when that GDP is viewed as GDP per capita.
Chris Bruton from Dataconsult addresses the AFG.
An interesting comparison was highlighted with China’s per capita GDP, and although Thailand is doing marginally better, Chris Bruton predicts that Thailand’s figures will be surpassed by China in 2012.
The World Bank’s view of the ease of doing business in this region puts Thailand as number two, very close to Malaysia, but very much better than other competitors in this region such as Vietnam, Indonesia and Cambodia.
When looking at competitiveness, Thailand is not so good, coming in at fourth again, according to the World Economic Forum, being beaten by Singapore, Malaysia and Brunei. Chris Bruton did at this point mention the fact that Singapore is definitely the number one country in this region, though doing business there is not quite as simple, as there is just so much competition within Singapore itself.
The world’s perception of transparency in this region (in other words corruption) puts Thailand again fourth. Not as good as Singapore, Malaysia, Brunei, but marginally better than Cambodia, Indonesia and Vietnam. This problem is endemic in the region, and Chris Bruton did not hold out much hope that it could be eradicated.
Thailand’s economic and political risk factors were overwhelmingly government instability and coups and political policy instability, followed by inefficient government bureaucracy and corruption. Against those factors, currency problems and labor relations were so small as to be almost non-existent.
The export markets for Thailand were very interesting, with East Asia taking 55 percent of the exports, while N. America and Western Europe were only 20 percent. Many manufacturers in Thailand should take note of this fact.
The final slide in Chris Bruton’s presentation covered the risk factors affecting investment and covered political and societal factors, such as the pending elections and unsettled red/yellow shirt confrontations.
In his summing up, Chris Bruton’s Dataconsult opinion was that Thailand wasn’t doing “too bad”, but obviously there were areas that needed attention! It was a presentation which kept the attention of the 50 attendees at all times, and again showed just how the AFG has developed over the past three years.