Clock’s ticking for Thai and Japanese auto companies in fast-changing market

According to a news report by Nikkei Asia, sales of Japanese automaker Toyota Motor in Thailand dropped by 15% in the first half of this year despite its 38% market share in the country. 

On the other hand, sales of Chinese automaker BYD Auto in Thailand has risen by 32% in the first half of this year.

Thai Summit’s senior vice president Chanaphan Juangroongruangkit said Thai automotive suppliers were at risk of losing orders for automotive components, as Chinese electric vehicle (EV) makers had started to rely on manufacturers from China.

She added that Japanese automakers had started to reduce their production capacity or close manufacturing factories in Thailand.

“Chinese original equipment manufacturers [OEM] are considering allowing their suppliers from China to set up production bases in Thailand,” she said.

However, she said Thai automotive suppliers still have four to eight years to cope with this risk as Chinese automakers would not invest in automotive component factories during the first phase of their production in Thailand.

Chanaphan advised Thai automotive suppliers not to wait for the government’s assistance, and to take part in the Chinese OEM supplier selection. 

If Thai suppliers fail to support Chinese OEMs in the first phase, they could lose opportunities to boost their competitiveness in the next four years, she warned.

To cope with the aforementioned risk, Chanaphan said Thai Summit Group has reached an agreement with several Chinese automakers, such as BYD Auto and Changan Automobile, on making vehicles in Thailand.

She added that the group would expand its automotive production abroad to meet the growth of the global EV market, especially in China and the US. 

This move is in line with the Thai economic slowdown, as the Federation of Thai Industries expects Thailand to produce only 1.7 million cars this year compared to its previous forecast of 2 million, she added.