Thailand’s export-oriented automotive industry is a recognized economic success story. The production of motor vehicles and parts began in the 1960s and expanded from the early 1990s, but it catered primarily for the highly protected domestic market. Production for export has been important only since 2000, but roughly half of the industry’s final output is now exported. Employment within Thailand’s automotive sector—final assembly plus parts—now exceeds a quarter of a million workers.1 In 2015 production exceeded 2 million units, making Thailand the world’s ninth largest automotive producer. According to The Economist, Thailand is now the “Detroit of the East.”

Stats & Charts

To keep up with the growing demand, several automakers have started investing heavily in various segments of the industry during the last few months. The automobile industry has attracted FDI worth US$ 24.53 billion between April 2000 and June 2020.

Whereas the FDI inflow into the automotive industry during the period April 2000-June 2020 stood at US$ 24.53 billion according to the data released by Thailand Trade Authorities

The sector is affected by various factors such as – the availability of skilled labor at low cost, robust R&D centers, and low-cost steel production. It also provides opportunities for investment and direct and indirect employment to skilled and unskilled labor, respectively. For these reasons, the Thai automobile sector has expectations to reach US$ 251 – 283 billion, and the automobile component export from Thailand is expected to reach US$ 80 billion by 2026.

The rise in middle-class disposable income has also contributed to the increased demand. As per the trends, Thailand could become a leader in shared mobility by 2030. This would provide opportunities for electric and autonomous vehicles to play a significant role in the future. The focus is shifting towards electric vehicles because they reduce emissions that lead to environmental hazards. The government aims to develop India as a global manufacturing center.