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Automotive industry in Thailand

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Title: Automotive industry in Thailand  
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Subject: Thailand, Automotive industry by country, Judiciary of Thailand, Economy of Thailand, Automotive industry in India
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Automotive industry in Thailand

Automotive Thailand Production 2004-2013

As of 2012, the Thailand automotive industry was the largest in Southeast Asia and the 9th largest in the World.[1][2][3] The Thailand industry has an annual output of near 1.5 million vehicles (mostly commercial vehicles), more than countries such as Belgium, the United Kingdom, Italy, Czech Republic, and Turkey.[3]

Most of the vehicles built in Thailand are developed and licensed by foreign producers, mainly Japanese and South Korean but with several other presences as well. The Thai car industry is taking advantage of the ASEAN Free Trade Area (AFTA) to find a market for many of its products. Thailand is one of the world's biggest markets for pickup trucks with over a fifty percent market share for one-ton trucks.[4]


  • History 1
    • Early days 1.1
    • Local content promotion 1.2
    • Liberalization and regional integration 1.3
  • Automobile manufacturers and products 2
    • Market profile 2.1
    • Daihatsu 2.2
    • Ford 2.3
    • General Motors 2.4
    • Honda 2.5
    • Isuzu 2.6
    • Mazda 2.7
    • Mercedes-Benz 2.8
    • MG 2.9
    • Mitsubishi 2.10
    • Nissan 2.11
    • Tata 2.12
    • Thai Rung 2.13
    • Toyota 2.14
    • Volvo 2.15
    • VW 2.16
    • Yontrakit Motors 2.17
  • References 3


The first car imported to Thailand was brought by the royal family in around 1900.[5] Since then, Thailand has proceeded to gradually develop a viable industry. Compared to the import substitution efforts of other Southeast Asian nations, Thailand's government has generally allowed a larger role in guiding development to alliances of manufacturers themselves.[6]

Many other countries have practiced a centralized approach, while some (like the Philippines) resorted to clientelism and favoritism. This is not to say that corruption has been entirely absent, with car manufacturing companies being involved in the Suvarnabhumi scandal, for instance. Several political families are also of prominence in manufacturing, often benefitting from insider knowledge and the occasional political privilege.[7] Thailand also provided efficient governmental incentives and support for the lesser component manufacturers, enabling them to develop on pace with the multinationals.[6]

Early days

The history of the Thai automotive industry began in 1960, when the Thai government set up an import substitution policy to boost local industry. In 1961, the first resulting company, the "Anglo-Thai Motor Company" (a joint venture between Ford of Britain and the Thai Motor Industry Co., Ford's existing importer), began local assembly.[8] The market was very small, with only 3,232 passenger cars sold and a mere 525 vehicles (310 cars, 215 trucks) assembled in Thailand in 1961.[9][10] Nonetheless new manufacturers quickly appeared, like Fiat's "Karnasuta General Assembly Co." and a joint venture between Siam Motors and Nissan.[9]

By 1970, local assembly had increased to 10,667.[10] After ten years of these early efforts at building local industry, the share of Thai-assembled cars was still about half of the market in 1971.[11] A policy review in 1969 found that the tax incentives, rather than lowering the trade deficit, had actually served to increase it. An Automobile Development Committee (ADC) was set up together with manufacturers, to try and remedy these problems.[12]

Local content promotion

Beginning in 1971, the government (along with private organizations representing the automotive industry) began an effort to increase the localization effort as a result of an ever increasing trade deficit. Many new parts manufacturers and assemblers had quickly sprouted, but a proliferation of models and versions hindered economies of scale. As a reaction, the Thai government increased tariffs on completely built-up (CBU) vehicles and began a graduated increase in the local parts content regulations (up to 25% in 1975). A moratorium on new assemblers was also placed, as were limits on the number of models offered.[13] As manufacturers quickly began circumventing the model limits, these rules were abandoned before they could have any real effect.[14]

This still wasn't enough for locally assembled cars to compete with imports. The trade deficit in vehicles increased more than sixfold between 1972 and 1977, and plants were running at around a sixth of capacity.[14] After having increased tariffs on CBU cars to 150%, imports of CBUs were banned in 1978.[11] Local parts requirements were scheduled to increase to 50% by 1983 (although this was kept at 45% after pressures from the manufacturers and the Japanese Chamber of Commerce).[15][16]

The local parts requirements did force out several smaller companies such as Dodge, Hillman, Holden, and Simca.[17] Gradually, the manufacture of simple parts such as brakes, radiators, engine parts, glass, and small body parts began to increase meaningfully. After the withdrawal of GM, Ford, and Fiat in the late seventies, the market also became somewhat more efficient. In 1985, CBU imports with engines over 2.3 litres (140 cu in) were once again permitted, albeit with a 300% import duty.[16][17]

The 1985 Plaza Accord meant that more Japanese direct investment in Thailand, and as the economy began booming the last years of the eighties marked strong growth.[15] In 1987 a benchmark was reached, when Mitsubishi Thailand became the first producer to export Thai-built vehicles with a batch of 488 passenger cars and 40 buses sent to Canada.[18][19]

Liberalization and regional integration

The 2004 Thailand International Motor Expo

In 1991, the market restrictions were eased and the market began to grow at a rapid rate due to the resulting lower prices. The ban on imports of cars under 2.3 litres was dropped in 1991, and tariffs were lightened. As a result, a flood of South Korean imports flooded the market. The Japanese manufacturers responded by cutting costs and by introducing market specific, low-priced cars like the Honda City and the Toyota Soluna.[20] In the period from 1992 to 1996, average growth was 12%.[21] 1996's results were only exceeded in 2004. This collapsed entirely following the Asian crisis; 1998's sales results (passenger and commercial vehicles) were less than a quarter of what they had been in the record year 1996.[22]

The investment in the pre-crash period led to serious problems of over-capacity which were to last long into the succeeding decade.[23] The capacity was now 1.2 million cars and trucks, in a market which rarely reaches 700,000 in sales. The manufacturers responded by increasing export efforts, with 1998 (while a dark year overall) marking the first time that Thailand became a net exporter of cars.[24]

The market had also been helped by the Brand to Brand Complement Scheme (BBC), instituted in 1992. This allowed component manufacturers in Malaysia and Thailand to freely trade certain parts in order to help them reach economies of scale.[25] The ASEAN Industrial Cooperation Scheme (AICO) helped further the integration of car manufacturers in the region.[26] As a result of the financial crisis, duties on fully built-up vehicles were increased from 42/68.5% (with a 2.4 litre threshold for the lower rate) to a flat rate of 80% in November 1997.[27] Thai suppliers had also reached a higher level in the nineties, now offering precision injection-molded pieces and with an eye to producing ever more sophisticated products in the future.[28]

After having come to the aid of local manufacturers after the 1997 crash, the Thai government further incentivized trade and regional cooperation by dropping the local parts requirements on 1 January 2003.[29] Further government efforts include bilateral trade agreements in the early 2000s, most notably with Australia, China, and India. The Thai automotive industry is also endeavoring to concentrate its growth to certain "cluster" areas, mainly in eastern Bangkok but also in Rayong, Chachoengsao, Chonburi (eastern Thailand) and in the centrally located city of Ayutthaya.[30] Thailand's Board of Industries has often referred to Thailand as the "Detroit of the East", and Thailand is indeed by a large margin the largest vehicle manufacturer in the ASEAN area.[31] Still, the decisions that control most vehicle manufacturing in Thailand are made in Tokyo and Detroit rather than in Thailand, as nearly all production is carried out by subsidiaries of foreign conglomerates.

Automobile manufacturers and products

Market profile

Cheaper and simpler cars are naturally preferred, as is the case for most markets at the same developmental stage as Thailand. Remarkable is the popularity of pickup trucks, holding a share of over half the market. This makes Thailand the world's second biggest market for such vehicles, after the United States. Their popularity has been explained as a result of government tax policies as well as a need for multi-purpose vehicles.[24]

Many manufacturers (Ford, Isuzu, Mazda, Mitsubishi) have chosen to localize their global bases for pickup manufacturing in Thailand, often exporting to Europe, Japan, and much of the rest of the world. These one-ton trucks are not exported to North America, where larger trucks are preferred.[32] In 2005, Thailand surpassed the United States and became the world's largest manufacturer of one-ton pickups, and by 2007 were second in the world (again behind the US) in both production and export of pickup trucks overall.[33]

A locally built Mitsubishi L200 as a songthaew in Pattaya.

While many Western brands are present, as well as certain others, Japanese brands have long had a dominant position in Thailand. In 1978 and 1982, for instance, Japanese brands received 91 and 90 percent shares.[5] In 2006, they still had an 88.5 percent share, in spite of the late entries of Ford, General Motors, Volkswagen, and BMW.[34]

Light and medium trucks, as well as microvans, also provide the basis for the ubiquitous Songthaew (Share taxis) which provide much of the local transport requirements in Thailand. Modes of transport in Thailand consist of a multitude of different solutions ranging from elephants to airplanes, but passenger cars have been steadily increasing in popularity.

Current automobile manufacturers and products are Hino, Honda, Lexus, Mazda, Mitsubishi, Nissan, Subaru, Suzuki, Toyota, Hyundai, SsangYong, Proton, Tata, Dongfeng, Chery, Chevrolet, Ford, Chevrolet, BMW, Mercedes-Benz, MG, Volvo, Saab, MG Motor and Thai Rung.[35]


Daihatsu in Thailand were built by Bangchan Motors, a company which has also assembled Opels and Hondas.[36] Originally only small trucks Hijets) were manufactured, but by 1980 the Charade was also available.[37] Some market specific models of the Mira, most notably a pickup version, were developed, but Daihatsu withdrew from Thailand subsequent to the 1997 financial crisis. Sales had dropped from 4,000 in 1995 to a mere 160 in 1997, and in March 1998 Daihatsu stopped selling cars in Thailand.[38]


Thai Motor Co. (founded in 1947 to import Fords) began assembling British Ford cars in 1961, in a joint venture with Anglo-Thai Motor. The firm was renamed Ford Thailand in 1973, although Ford withdrew in 1976.[39] Various crises and tougher restrictions on assemblers had made the business climate inhospitable. Ford maintained a presence in the eighties and nineties through assembly by Sukosol and Mazda Motor. In 1995 Ford and Mazda opened AutoAlliance Thailand (AAT), a joint venture which began producing Mazda B-Series-based pickup trucks in May 1998.[39] Sold as the Ford Ranger an SUV version of it, called the Ford Everest, was developed locally. It was first shown at the March 2003 Bangkok Motor Show.[40] Since 2010, it is the exclusive production site of the sixth generation of the Ford Fiesta for the major Asian markets (except for China and India).[41]

General Motors

Having had an early presence in Thailand since the creation of Bangchan Motors in 1970, General Motors withdrew in the late seventies as the Vietnam War, Thai domestic stability, and the energy crisis all threatened their ability to do business.[15] After having left in 1977,[5] General Motors Thailand (GMT) returned in 2000, subsequent to the elimination of local content requirements.[4] They have since offered a combination of Opels, Daewoos, and Holdens with Chevrolet badging.

General Motors placed the production of the Chevrolet Zafira (Opel) to Thailand, originally with the intention of supplying the local ASEAN markets only. After the 1997 Asian financial crisis and resulting market collapse this aim had to be adjusted, and by 2002 90% of the production of General Motors' Rayong plant was being exported, as far away as Europe and Chile.[42] The Zafira also marked a notable first for the Thai car industry, when it became the first finished car to be exported to Japan (as the Subaru Traviq).[42] The Zafira was built in Thailand from May 2000 until 2005. Various Daewoos and Isuzu pickup trucks are also provided with Chevrolet badging, as is the Holden Commodore ("Chevrolet Lumina").[43] GMT also assembled the Alfa Romeo 156 in 2002-2004, a result of Fiat and GM's strategic alliance.[44]


Honda only began assembling cars in Thailand in 1984, by a company called Banghan General. Banghan continued to do so under license until 2000, even though Honda established their own parallel production by Honda Cars Manufacturing Thailand in 1992. This company, with 91.4% Honda ownership, then changed its name to Honda Automobile (Thailand) in 2000. The most famous model of Honda Thailand is the 1996 City, a small sedan developed especially for the ASEAN markets and not intended for sale in Japan. Nonetheless, the second generation City (2002) has been exported to Japan as the Honda Fit Aria since its introduction.[39]


Isuzu MU-7 SUV
Isuzu Thailand Capacity 2015

Isuzus have been built in Thailand since 1963 by the Isuzu Assembling Plant. The company became "Isuzu Motors Co. (Thailand)" in 1966, and built their first pickup trucks in 1974.[39] The Thai-only Isuzu Vega SUV was built from 1998 until 2002. The larger and more rounded MU-7 SUV can seat six or seven and appeared in November 2004.


The first Mazdas assembled in Thailand were three-wheeled commercial vehicles, in 1950.[39] In 1974 "Sukosol and Mazda Motor Industry" was founded, opening Mazda's first knock-down assembly plant in 1975.[45] In 1998 the AutoAlliance Thailand (AAT, formed in 1995) automobile assembly plant was opened, a joint venture between Ford Motor Company and Mazda Motor Corporation in Rayong province, Thailand. AAT builds compact pickup trucks and SUVs primarily for the South-East Asian market, with exports to other developing markets and Europe as well. The Mazda 323 Protégé was produced between January 2000 and 2002,[46] but was replaced with imports from the Philippines as a result of market liberalizations.


Mercedes Thailand Capacity 2014

Mercedes-Benz first took a toehold in Thailand in 1960, when they established a plant for the manufacture of utility vehicles (operational in 1961). Passenger car production commenced in 1979, soon after the governments ban on CBU imports. Mercedeses are built by the Thonburi Automotive Assembly Plant Company. In more recent years, much of the Mercedes-Benz lineup has been built here, from the A-class to the C, E, and S-classes.[39]


MG Thailand Capacity 2014

MG A joint venture of CP Group and SAIC has set up a CKD assembly factory in the Eastern Seaboard.


Mitsubishi Motors has a long-standing presence in Thailand. Mitsubishi Motors (Thailand) (MMTh) is headquartered in Pathumthani, just north of Bangkok. Their flagship product is the Mitsubishi Triton (L200 in many markets) pickup truck, which is built exclusively in Laem Chabang and is exported to more than 140 global markets.[18] The sixth generation of the Mitsubishi Mirage is also produced exclusively at the Laem Chabang plant.[47] Mitsubishi had originally made Thailand their global hub for pickup production in 1995, after having become Thailand's first vehicle exporter in 1988. This focus on global exports was of considerable aid to MMTh the tight years after the Asian financial crisis, when the local markets collapsed.[48]


Nissan Thailand Capacity 2013-15

Nissan was the first Japanese producer to build a plant in Thailand, in a 1962 joint venture with Siam Motors.[49] "Siam Motors & Nissan Co., Ltd." received a sister company called "Siam Nissan Automobile Co., Ltd." in 1977, which only built pickup trucks. Today, Nissan manufactures various cars and the D21/Navarra pickup truck in Thailand, also for export to various markets. A branch called "Prince Motor Thailand" also operated, until February 1986. In addition to Nissan products, Siam Automotive also assembled Fiats for the local market until 1986.[50]

One local specialty is the Nissan NV, a tiny pickup truck based on the Y10 Nissan AD Van.[51] This was also later developed into a double cab, four-seater model. In April 2009, the company's name was changed to Nissan Motor (Thailand).[52]


Thonburi Automotive Assembly Plant Company, who builds Mercedes-Benz vehicles in Thailand, has a 30% stake in a joint venture producing Indian Tata Motors automobiles since 2007.[36]

Thai Rung

The only Thai automobile manufacturer is Thai Rung, also known as TR, manufactured by Thai Rung Union Car Public Co. Ltd. (TRU). The company was established in 1967 in Bangkok, Thailand. The original name was Thai Rung Engineering Co. Ltd., which was changed to Thai Rung Union Car Co. Ltd. in 1973. TRU was first listed on the Stock Exchange of Thailand in 1994. TRU's business ranges from product design and development, automotive parts manufacturing, industrial equipment manufacturing, car assembly lines, to financial business.

Some discontinued TR vans were powered by Land Rover engine in combination with Thai-developed body design and platform. Modern TR cars are based on small or medium trucks, developed into SUV or seven-seat multi-purpose vehicles by Thai Rung themselves. The 2009 models were the TR Adventure (based on the Isuzu D-Max) and TR Allroader (based on the Thai-version Chevrolet Colorado).


Toyota Thailand Capacity 2014

Toyota Motor Thailand Co. (TMT) was set up in 1962 and began producing the Toyota Publica and Tiara cars, and the Stout, Dyna, and DA trucks in 1964.[51] In 1979 Toyota began making pressed body parts in Thailand, and in 1989 they began manufacturing engines locally.[53] In 1996, as a response to stiff competition from imported South Korean cars, Toyota introduced the Tercel-based Toyota Soluna in Thailand. The Soluna has also been exported to other ASEAN countries. After the 1997 Asian Financial Crisis, the ASEAN markets contracted severely and TMT were forced to change their focus to a more export oriented one. Nevertheless, they remain mostly an import-substitution operation and their main export market beyond Southeast Asia is Oceania.[48] In 2005, Toyota established a research and development center in Thailand.[54] Toyota currently builds a wide range of cars in Thailand, from the Yaris to the Fortuner SUV.[51]


Volvo has a long-standing Thai presence through the (entirely owned by Volvo) Thai Swedish Assembly Co, Ltd., which was formed in 1976.[51] Their large, more expensive cars occupy a prestige position in the market. Following the 1991 easing of import tariffs, cars of over 2,300 cc received an import duty of 100% while those with smaller engines were only taxed at 60%. Volvo, dependent on an engine of 2,316 cc, found themselves disadvantaged against Mercedes-Benz and after some lobbying managed to have this limit raised to 2,400 cc.[20] In addition to various Volvo cars (and the XC90 SUV), Thai Swedish Assembly also built the Land Rover Freelander from 2001 until 2005.[51]


VW has applied for the Eco Car Phase II program and will invest 1 Billion Euros set up a factory in the Eastern Seaboard area latest until 2019.[55]

Yontrakit Motors

Yontrakit is an assembler which began producing vehicles in 1972. They have built a number of different brands but are currently mainly producing Peugeot, Citroën, and Volkswagen cars.[36] Volkswagen commenced local assembly in 1999.


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  6. ^ a b Fujita, p. 151
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Works cited
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  • Fujita, Mai (1998), "Industrial Policies and Trade Liberalization: The Automotive Industry in Thailand and Malaysia", in Omura, Keiji, The Deepening Economic Interdependence in the APEC Region, Singapore: APEC Study Center, Institute of Developing Economies 
  • Kasuga, Takeshi; Oka, Toshiko; Yamaguchi, Yohei; Higa, Youichiro & Hoshino, Kaoru (June 2005). "The Expansion of Western Auto Parts Manufacturers into Thailand, and Responses by Japanese Auto Parts Manufacturers". JBICI Review ( 
  • Mazur, Eligiusz, ed. (2006). World of Cars 2006·2007. Warsaw, Poland: Media Connection Sp. z o.o. p. 226.  
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  • Niyomsilpa, Sakkarin (2006), ]The Thai automobile industry after the crisis: the era of multinational capitalismอุตสาหกรรมรถยนตไทยหลังวิกฤตเศรษฐกิจ : สูยุคทุนนิยมเสรีขามชาติ [ (in Thai), Bangkok, Thailand: Bangkok Business News,  
  • Ueda, Yoko (December 2009), "The Origin and Growth of Local Entrepreneurs in Auto Parts Industry in Thailand", CCAS Working Paper (Center for Contemporary Asian Studies) (Japan: Doshisha University) 25 
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