U.S. manufacturers seeking to contribute to Thailand’s automotive industry supply advised to develop their products to either cater to local demand, or to the platforms selected for assembly in Thailand for export markets. In addition, new-to-market manufacturers can enhance their access to the assemblers and supplier network in Thailand by building upon existing, established relationships. Thailand’s automotive policies and regulations traditionally promote free competition and foreign investment in local production. Incentives are given to foreign investors to promote establishment of the local manufacturing industry. Meanwhile, tariff structures are designed to protect the local industry by imposing high tariff rates on “Completely Built Units” (CBUs) and finished parts. Despite the tariff barriers, tariff rates are structured to promote growth in the local industry. Other non-tariff barriers do not appear to exist to hinder automotive imports.
Market Entry & Barriers
I 222 I
Market Entry & Demand
Between 2018 and 2020, the outlook for the automotive sector will likely be one of growth for both domestic and export markets which are expected to strengthen. Output of vehicles should grow with annual total reaching 2.09-2.13 million units (5-7 percent increase) in 2018, 2.22-2.28 million units (5-8 percent increase) in 2019, and 2.32-2.36 million units (3-5 percent increase) in 2020.
Several factors that will support positive business conditions for the automotive sector as follows;
-Economy will continue to strengthen steadily. According to the research paper from key banks in
Thailand, the Thai economy will grow by 4.0%, 4.2% and 4.2% in 2018, 2019, and 2020 respectively.
-Demand for new vehicles is expected to be as high as 400,000 – 500,000 units annually under the
first-car buying project during 2018-2020.
-Major automobile manufacturers have plans to support sales by releasing a steady stream of new
models. At least 20 new models are scheduled for new product launch.
-The construction sector is expected to see improving conditions. As such, the demand for small-
and mid-sized commercial vehicles will also be boosted by this sector.
Best Prospects for U.S. Exports
Aftermarket Summary
Forecasts are that the auto parts sector will see healthy growth of 8-12% between 2018-2020. The domestic market will be bolstered by rising demand from the OEM segment due to increasing output of automobile and motorcycle manufacturers. While the REM segment, for replacement parts, will
Thailand