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THAILAND’S
AUTOMOTIVE
I N D U S T R Y
THE NEXT-GENERATION
Thailand Board of Investment
www.boi.go.th
Source:
1
Ministry of Commerce
2
OICA as of March 2017
INDUSTRY OVERVIEW
The world is embracing to cleaner and
smarter society while people’s mean of
transportation like automobile also takes
a step further to the next generation with
more fuel-efficient and environmentally
friendly. In 2016, 94 million automobiles
were produced worldwide, the highest
Source:
1
Bloomberg and International Energy Agency (IEA)
2
Organization of Motor Vehicle Manufacturers (OICA)
Note:
* Year-to-year growth rate (2015-2016)
** Commercial vehicles’ definition by OICA include
light commercial vehicles, heavy trucks,
coaches and buses.
number in the history. Yet, those vehicles
are embracing the new breakthrough
technology. Ranging from hybrid to
battery electric vehicle, the world aims
to have EV at 40% market share of all
automobile in 20401
.
World’s Automobile Production 20162
Units(Million)
5
10
15
20
25
30
China
USA
Japan
Germany
India
SouthKorea
Mexico
Spain
Canada
Brazil
France
Thailand
UK
Turkey
CzechRep.
1.351.491.821.942.082.162.372.893.60
4.234.49
6.06
9.20
12.20
28.12
Cars Commercial Vehicles**
World’s Production: 94.10 Million (+4.62%)*
Thailand: 1.94 Million (+1.80%)*
THAILAND
AUTOMOTIVE INDUSTRY
Thailand automotive industry has been
significantly developed for over 50
years. The industry contributed 12%
of the GDP1
with more than 1.94 million
vehicles produced and worth USD 27
billion in 2016. These successes ranked
the country as the largest automotive
producer in Southeast Asia and 12th
in the
world. As an “Automotive Hub of Asia”,
Thailand continuously accelerates its
next-generation automotive industry to
follow the S-Curve promotion with higher
value-added production and also strives
for alignment of automotive industrial
policy to align with environmental
protection policy.
Automotive Producer
in Southeast Asia in 2016
One-Ton Pickup Producer
in the world in 2016
Commercial Vehicle Producer
in the world In 2016
Automotive Producer
in the world in 2016
1st
2nd
6th
12th
Thailand Automotive Industry Ranking2
Source:
1,2
Thai Automotive Industry Association and
Thailand Automotive Institute
Thailand expects to increase its
production to 3,500,000 motor vehicle
units in 2020 or 80% increase from
20161
.
Since Toyota and Nissan established
their first production plant in 1962,
Thailand automotive industry has
been continuously developed and
become well established over decades.
Nearly every Japanese car makers
and many leading US, Europe, and
China automotive companies have
their production plants in Thailand
and many of which set their regional
headquarters in the country. These
auto assemblers also attracted more
than 710 auto part makers and 1,700
supporting companies to the country2
.
These auto part suppliers are all the
most important contributors who help
shape the industry’s structure with its
completed supply chain till these days.
Assemblers
(18 car and
9 motorcycle companies)
Tier 1 Suppliers
(710 auto part companies)Foreign
majority
58%
Thai
majority
39%
JV
3%
Auto
Assemblers
Tier 2 & 3 Suppliers
(1,700+ companies)
Vehicles Produced
1.9 3.5
2016 2020
[Million Units]
Source:
1	
Thailand Automotive Institute as of February 2017
Note:
* 	Compound Annual Growth Rate
(2009-2016)
AUTOMOTIVE
ASSEMBLERS
Motor Vehicle
Thailand produced 1,944,417 motor
vehicle units in 2016. More than half of
the total production is one-ton pickup
which shared 57% along with 41% for
passenger car and 2% for commercial car.
The production numbers keep growing
remarkably since 2009 which 9.93%
increase annually. In 2016, Thailand had
doubled its car production compared
to 2009.
Thailand Car Production 2009-20161
Units(Million)
0.5
1
1.5
2
2.5
3
2009 2010 2011 2012 2013 2014 2015 2016
1.941.911.88
2.452.45
1.46
1.65
1.00
Passenger Car One-Ton Pickup Commercial Car
9.93%*
Thailand exported 1,188,515 automobiles
in 2016 which made more than USD 18
billion to the country while export value
increased at the faster pace than export
volume since 2009, 14.08% and 11.95%
respectively. With 18 auto assemblers,
Thailand’s automotive industry will help
accelerate the economy of Thailand to
the even larger and stronger.
Source:
1
Thailand Automotive Institute as of February 2017
2
World’s Top Export
3
Ministry of Commerce
Note:
* Compound Annual Growth Rate (2009-2016)
Exchange rate (BOT, March 1, 2017):
USD 1 = THB 34.99
18 Auto Assemblers in Thailand
Thailand Car Export Unit and Value 2009-20161
Value(USDBillion)
5
10
15
20
25
Units(Million)
0.5
1
1.5
2
2009 2010 2011 2012 2013 2014 2015 2016
Units Value
14.08%*
1.191.201.131.111.02
0.74
0.90
0.54
7.18
11.57
9.81
13.83 14.55 15.03
16.91
18.06
Source:
1,3
Thailand Automotive Institute and The Federation of Thai Industries
2
World’s Top Exports
Note:
Commuter has less than 250 cc, Sport has more than 250 cc,
CBU: Complete Built Unit, CKD: Completely Knocked Down,
* CKD is not included
** CKD is not included but import is included
Motorcycle
Motorcycle is another remarkable
product of Thailand as we are one
of the largest production hubs of the
world with 1,820,358 productions in
20161
. All 9 motorcycle assemblers
help contribute the accelerated growth
of the motorcycle production which
bring the country to be the world’s 7th
largest motorcycle exporter accounted
for more than 5% of all motorcycle
that were exported around the world in
20152
. The domestic demand reached
to 1,738,231 units sale in 2016, 6.05%
increased from 20153
.
Motorcycle Production, 2016*
Motorcycle Domestic Sale, 2016** Motorcycle Export, 2016
25%
75%
Commuter Sport
1,820,358
5%
9%
86%
< 125 cc 126 - 150 cc > 151 cc
1,738,231
68%
32%
CBU CKD
924,917
Thailand ranked 2nd
biggest
automobile exporter in Asia
in 20152
. The largest export
destination includes Australia,
the Philippines, Indonesia,
Japan and Malaysia3
.
Thailand’s Largest Automotive Export Destinations
AUSTRALIA
THE PHILIPPINES
INDONESIA
1
2
3
Source:
1,2	
Thailand Automotive Institute
Source:
1	
Thailand Automotive Institute
2	
Thai Auto Parts Industry Association
Note:
*	 Compound Annual Growth Rate (2009-2016)
Exchange rate (BOT, March 1, 2017):
USD 1 = THB 34.99
Auto Parts
Thailand’s auto parts industry has
always been a strong supporting
factor contributing to the fast growing
of Thailand’s automotive industry.
More than 60% of 100 largest auto
part suppliers in the world have their
production hub in Thailand. Local
manufacturers also supply for 80-
90% of the parts used in auto vehicle
production in the country2
.
Export of motorcycle in Thailand also
shows the favorable trend of increase
in value. In 2016, export value rose to
USD 1.51 billion while export volume
was 924,917 units1
. The number
strongly demonstrates the more value-
added production of Thailand which
is the major development goal of the
country. More R&D and technologies are
expected to increase competitiveness
and approaching to the next-generation
automotive industry.
Value(USDBillion)
1
2
3
4
5
6
7
8
2009 2010 2011 2012 2013 2014 2015 2016
7.43
7.117.27
6.89
6.25
5.255.13
3.66
OEM Engine Spare Part Other
10.64%*
Thailand Auto Parts Export Value
2009-20162
Examples of Auto Parts Makers
in Thailand
In 2016, Thailand’s auto parts export
value increased 4.54% from 2015 and
reached USD 7.43 billion. Nearly 71%
of the export value is from Original
Equipment Manufacturers (OEMs)
while engine has the highest growth at
34.59% increase from 20151
.
Motorcycle Assemblers in Thailand
Plug-in Hybrid Electric Vehicle
The world is transitioning to the next-
generation automobile of which Thailand
also ramps up its competitiveness on
this trend especially PHEV. Mercedes-
Benz and BMW just established their
PHEV production plants as well as the
plan of PHEV and EV plant of FOMM
Corporation.** The future of PHEV in
Thailand is getting brighter with strong
support from both public and private
sector.
Eco Car Eco Car E85
14%
(<100 g/km CO2
Emission)
12%
(<100 g/km CO2
Emission)
17%
(>100 g/km CO2
Emission)
Excise Tax for Eco Car
Source:
1
Thailand Automotive Institute
2
Bangkok Post
Note:
* Eco car: Ecology car which CO2
Emission less than 100 g/km
** FOMM Corporation is a Japanese company which
develop and produce compact
electric vehicles.
Eco Car
Eco car* is Thailand’s product champion1
since the country embarked to the eco
car promotion policy in 2007. In 2015, all
eco car reached 15% market share of all
domestic sales with Nissan, Mitsubishi
and Toyota being the three biggest
producers2
. Thailand has successfully
drawn domestic demand and this year,
2017, second-phase production is
starting with the excise tax cut down
to 12-14% from 17%.
SUPPORTING
INDUSTRIES
Thailand is internationally recognized
for its high quality vehicles and parts
which resulted from the strong supporting
industries ranging from plastics, tires, oil &
gas, lubrication oil, electronics, machinery
and many more. Automotive electronics is
one of the country’s focus and supported
as ‘Smart Electronics’ hub. With more
than 1,700 suppliers in all supporting
industries which help complete the
country’s supply chain, Thailand is the
best place for the automotive production
of the world.
Examples of Supportive Suppliers in Thailand
OPPORTUNITIES
Thailand is ramping up our competitiveness in the next-generation of automobile by
providing more incentives as well as the development of infrastructures to further
enhance the investment-friendly environment.
Biggest Domestic Sale Big Bike Brands 2016
With strong support from the
government on tax incentives as well
as the strengths of automotive industry
make Thailand a high-potential hub of
big bike production. The increasing
number of Free Trade Agreement helps
big bike export grows impressively,
especially in ASEAN and ASEAN+3
(China, Japan and South Korea)4
.
Source:
1,3,4	
Thailand Automotive Industry
2		
Department of Land Transport
Note:
* 	Big Bike or sport motorcycle is categorized by
size of engine exceeding 250 cc.
** Compound Annual Growth Rate (2010-2016)
Exchange rate (BOT, March 1, 2017):
USD 1 = THB 34.99
Big Bike
Big bike* is making an
incredible profit in Thailand
since the country declared its
big bike production promotion
in 20121
. Thailand produced
more than 400,000 big bikes
in 2016 which increase
27.68% annually since
2010. Domestic demand
also increases dramatically
which Triumph, BMW and Ducati ranked
top 3 for the biggest sales in 20162
.
These global leading companies all
have their production plants in Thailand.
Moreover, Harley Davidson, a well-
known motorcycle brand, also recently
established its Regional Training Center
in Thailand.
Units(Thousand)
100
200
300
400
500
2010 2011 2012 2013 2014 2015 2016
455.08
374.89358.72346.45
257.52
174.00
105.04
27.68%**
Thailand Big Bike Production
2010-20163
Source:
1 	
Bloomberg and International Energy Agency (IEA)
2 	
Electric Vehicle Association of Thailand
3 	
SCB Economic Intelligence Center
4 	
Toyota Motor Thailand
Note:
* 	Electricity Generating Authority of Thailand, Metropolitan
Electricity Authority, Provincial Electricity Authority,
PTT Public Company Limited
25 Million 1.2 Million
EV cars in the world in 2035
30% Market Share
EV Cars in Thailand in 2036
7% Market Share
In 2035, EV car in the world will reach
30% market share1
. Thailand also
expected to have 1.2 million EV cars2
with more than 690 charging stations
nation-wide3
. Toyota and Panasonic
are planning to establish the EV battery
production plant in Thailand as well4
.
Fuel cell vehicle (FCV) is another
upcoming trends of which Toyota is
planning to expand its FCV to Thailand
in this near future.
Electric Vehicle
All 690 charging stations is expected to
finish in 2036 by the collaboration of
EGAT, MEA, PEA and PTT.*
Abundant Skilled Labor
Thailand has abundant of skilled
labors. There are more than 700,000
labors in the automotive industries in
20161
covering in every process of the
production in Thailand’s automotive
industry.
With 29 universities and other
institutes which provide automotive
and mechanical engineering programs,
it is forecasted that, in 2021,
61% of all workforces in Thai automotive
industry are high-skilled labor with high
vocational diploma or above, 27% with
bachelor’s in engineering degree and
5% with master’s degree or above2
.
Many auto assemblers in Thailand, i.e.,
Isuzu, Toyota and Honda, have their
own employee training programs which
help improve their competitiveness and
efficiency.
Thailand’s Human Resource in
Automotive Industry 2010-20163
People(Thousand)
200
400
600
800
2010 2011 2012 2013 2014 2015 2016F
700
669
627
586
545
501483
6.38%
Source:
1,3
Thailand Automotive Institute (TAI)
2
Electric Vehicle Association of Thailand (EVAT)
Source:
1 	
Port Authority of Thailand
Note:
* 	EEC: Eastern Economic Corridor
Development Project
WHY THAILAND?
By 2021, Thailand is expecting to be a global green automotive production base
with advanced technology implementation. A half century of profession makes
Thailand the best investment destination for the next generation automobile of
the world.
Geographical Advantage
Situated at the center of Indochina
peninsula, Thailand has the perfect
location connected to 2 billion people in
Southeast Asia and China by land and
by sea with world-class infrastructure
Eastern Economic Corridor: EEC
As one of the promoted industries
in 13,285 km2
of EEC*, automotive
production is reinforced and developed
by supporting facilities and special
investment policies. The EEC will
also provide National Automotive Tire
and Testing Center, the first and only
provided. The third phase expansion
of Laem Chabang deep-sea port is also
expected to provide export capacity up
to 3 million cars, one of the busiest sea
port in the world1
.
automotive testing center in Southeast
Asia which will be ready for car and tire
makers in 2018, offering international
standard automotive and tire tests.
This will help strengthens the position
of Thailand as world automotive
manufacturing hub.
Excellent Government Support
The Government sees automotive
industry as a cornerstone of the Thai
economy with strong support from
many organizations including TAI, TAIA,
EVAT and TAPMA*. The Government’s
Master Plan for Automotive Industry
sets the goals for Thailand to be a global
green automotive production base with
strong domestic supply chains which
will create higher value for the country
by 2021.
Strong Supporting Organizations
Note:
*	 TAI - Thailand Automotive Institute,
TAIA - The Thai Automotive Industry Association,
EVAT - Electric Vehicle Association of Thailand,
TAPMA - Thai Autoparts Manufacturers Association
Research and Development
Most of the auto assemblers in the
world established their R&D and training
centers in Thailand serving Southeast
Asia and Asia Pacific. This emphasizes
THAILAND Automobile R&D Centers
that Thailand is moving up the value
chain to more value added automotive
production.
Note:
*	 LCV: Low Consumption Vehicle
**	PPV: Pick-Up Passenger Vehicle
Ministry of Industry
Administer and manage the country’s
policies and promote and support industry
and investment as well as entrepreneur.
Thailand Automotive
Institute
Support and coordinate with private and
government sectors as well as provide
necessary services for the automotive
industry.
The Thai Automotive
Industry Association
Promote the automotive industry including
increases competitiveness of automotive
manufacturer and assembler.
Electric Vehicle
Association of Thailand
Support knowledge exchange and
technology on EV as well as consult on
related regulation, standardization and
research.
Toyota Motor Asia
Pacific Engineering and
Manufacturing
Support for car development and technology
in 11 countries in Asia Pacific, Africa, and
South Africa in 4 research fields including
product planning, engineering design,
evaluation, and localization.
Nissan Technical Center
South East Asia
Support for car development in 6 Nissan’s
production site across ASEAN countries.
Responsibility for all R&D processes
following the vehicle physical design stage
for models marketed in the ASEAN region.
Isuzu Technical Center
Of Asia
Covers each single scope of LCV* and
PPV** vehicle research and development for
the whole word including product planning,
industrial design, engineering design, CAE
analysis, prototype work, and validation and
experiment work.
Honda R&D Asia Pacific
Elevated to be the automobile design and
R&D center in 12 countries across Asia and
Oceania. Focused on advanced product
planning, styling design, engineering, and
automotive test.
Mitsubishi Motors
Proving Ground
First outside Japan research and
development proving ground. A Multi-
purpose test track, a noise, vibration, and
harshness test site which serving Mitsubishi
Motors Thailand’s in conduction pre-
production trials.
Note:
* Exemption of import duty on machinery and raw or
essential materials used in manufacturing export products
** Project must have structural welding and spray painting process.
Plans must be approved by BOI
Note:
* Exemption of import duty on machinery and raw or
essential materials used in manufacturing
export products
INVESTMENT INCENTIVES
BOI Incentives
BOI recognizes the importance and value of the automotive industry, and offers
a wide range of tax and non-tax incentives for projects that meet national
development objectives.
Non-Tax Incentives
These activities also receive the following non-tax incentives:
Permit to bring in
expatriates
Permit to own land
No restriction on
foreign currency
Tax Incentives
GROUP ELIGIBLE ACTIVITIES
INCENTIVES
Corporate
income tax
exemption
Exemption
of import
duty*
A1
Research and development in automotive
industry and automotive training centers
8 years
(no cap) 
A2
•	Manufacture of Vehicle Parts Using High
Technology
•	Manufacture of Automobile Parts for Safety
Parts and Energy-saving Parts
•	Manufacture of Parts for Hybrid, Electric
Vehicle (EV) and Plug-in Hybrid Electric
Vehicles (PHEV) Automobile
•	Manufacture of Rubber Tires for Vehicles
•	Manufacture of Fuel Cells
8 years 
A3
•	Manufacture of Automobile Engines
-- Project must have pressing of parts, not less than 4 out
of 5 parts, as follows: Cylinder Head, Cylinder Block,
Crankshaft, Camshaft and Connecting Rod
•	Manufacture of Fuel System Parts
•	Manufacture of Transmission System Parts
•	Manufacture of Turbocharger
•	Manufacture of Motorcycles (except less
than 248 cc engine displacement)
5 years 
GROUP ELIGIBLE ACTIVITIES
INCENTIVES
Corporate
income tax
exemption
Exemption
of import
duty*
A4
•	Assembling of Engine
•	Manufacturing of Fuel Pipe/ Tube
•	Manufacture of Engine System Parts (Except
Turbocharger
•	Manufacture of Steering System Parts
•	Manufacture of Cooling System Parts
•	Manufacture of Exhaust System Parts
•	Manufacture of Air Conditioning System Parts
•	Manufacture of Ultimate Tensile Strength Steel
•	Manufacture of Ball Bearing for Vehicles
3 years 
B1
•	Manufacture of General Automobile
•	Manufacture of Other Vehicle Parts
•	Manufacture of Motorcycles (except less
than 248 cc engine displacement)**
- 
CONTACT US
HEAD OFFICES
OFFICE OF THE BOARD OF INVESTMENT
555 Vibhavadi-Rangsit Road, Chatuchak, Bangkok 10900
Tel: 	 +66 (0) 2553-8111
Fax: 	+66 (0) 2553-8315
Website: www.boi.go.th
Email: head@boi.go.th
ONE START ONE STOP INVESTMENT CENTER (OSOS)
18th
Floor, Chamchuri Square Building,
319 Phayathai Road, Pathumwan, Bangkok 10330
Tel: 	 +66 (0) 2209-1100
Fax: 	+66 (0) 2209-1199
Website: osos.boi.go.th
Email: osos@boi.go.th
ONE STOP SERVICE CENTER FOR VISAS AND
WORK PERMITS
18th
Floor, Chamchuri Square Building,
319 Phayathai Road, Pathumwan, Bangkok 10330
Tel: 	 +66 (0) 2209-1100
Fax: 	+66 (0) 2209-1194
Email: visawork@boi.go.th
REGIONAL OFFICES
REGIONAL INVESTMENT AND ECONOMIC CENTER 1
CHIANG MAI OFFICE
Airport Business Park 108-110,
90 Mahidol Road, Amphur Muang, Chiang Mai 50100
Tel: 	 +66 (0) 5329 4100
Fax: 	+66 (0) 5329 4199
Email: chmai@boi.go.th
REGIONAL INVESTMENT AND ECONOMIC CENTER 2
NAKHON RATCHASIMA
2112/22 Mitraphab Road, Amphur Muang,
Nakhon Ratchasima 30000
Tel: 	 +66 (0) 4438 4200
Fax: 	+66 (0) 4438 4299
Email: korat@boi.go.th
REGIONAL INVESTMENT AND ECONOMIC CENTER 3
KHONKAEN
177/54 Moo 17, Mitraphab Road, Amphur Muang,
Khonkaen 40000
Tel: 	 +66 (0) 4327 1300-2
Fax: 	+66 (0) 4327 1303
Email: khonkaen@boi.go.th
REGIONAL INVESTMENT AND ECONOMIC CENTER 4
CHONBURI
46 Moo 5 Laem Chabang Industrial Estate, Sukhumvit Road,
Toongsukhla, Sriracha, Chonburi 20230
Tel: 	 +66 (0) 3840 4900
Fax: 	+66 (0) 3840 4997, +66 (0) 3840 4999
Email: chonburi@boi.go.th
REGIONAL INVESTMENT AND ECONOMIC CENTER 5
SONGKHLA
7-15 Chaiyong Building Juti Uthit 1 Road, Hadd Yai,
Songkhla 90110
Tel: 	 +66 (0) 7458 4500
Fax: 	+66 (0) 7458 4599
Email: songkhla@boi.go.th
REGIONAL INVESTMENT AND ECONOMIC CENTER 6
SURAT THANI
49/21-22 Sriwichai Road, Makhamtia, Amphur Muang,
Surat Thani 84000
Tel: 	 +66 (0) 7740 4600
Fax: 	+66 (0) 7740 4699
Email: surat@boi.go.th
REGIONAL INVESTMENT AND ECONOMIC CENTER 7
PHITSANULOK OFFICE
3rd
Floor, Thai Sivarat Building, 59/15 Boromtrilokkanat 2 Road,
Naimuang, Amphur Muang, Phitsanulok 65000
Tel: 	 +66 (0) 5524-8111
Fax: 	+66 (0) 5524-8777
Email: phitsanulok@boi.go.th
OVERSEAS OFFICES
SHANGHAI
Thailand Board of Investment, Shanghai Office
Royal Thai Consulate General, No. 18, Wanshan Road,
Changning Distric, Shanghai 200336, P.R. China
Tel:	 +86-21-5260-9876, +86-21-5260-9877
Fax:	+86-21-5260-9873
Email: shanghai@boi.go.th
BEIJING
Thailand Board of Investment, Beijing Office
Royal Thai Embassy, No.21 Guanghua Road,
Chaoyang District, Beijing, 100600, P.R. China
Tel:	 +86-10-8531-8755 to 8757, +86-10-8531-8753
Fax:	+86-10-8531-8758
Email: beijing@boi.go.th
GUANGZHOU
Thailand Board of Investment, Guangzhou Office
Investment Promotion Section, Royal Thai Consulate-General,
No.36 Youhe Road, Haizhu District, Guangzhou, P.R. China 510310
Tel: 	 +86-20-8385-8988 Ext. 220-225,
	 +86-20-8387-7770 (Direct line)
Fax: 	+86-20-8387-2700
Email: guangzhou@boi.go.th
TAIPEI
Thailand Board of Investment, Taipei Office
Taipei World Trade Center, 3rd
Floor, Room 3E40
No.5 Xin-Yi Road, Sec. 5 Taipei 110, Taiwan R.O.C.
Tel:	 +886-2-2345-6663
Fax:	+886-2-2345-9223
Email: taipei@boi.go.th
TOKYO
Thailand Board of Investment, Tokyo Office
Royal Thai Embassy, 8th
Floor, Fukuda Building West,
2-11-3, Akasaka, Minato-ku, Tokyo 107-0052 Japan
Tel:	 +81 (0) 3-3582-1806
Fax:	+81 (0) 3-3589-5176
Email: tyo@boi.go.th
OSAKA
Thailand Board of Investment, Osaka Office
Royal Thai Consulate-General, Bangkok Bank Building, 7th
Floor,
1-9-16 Kyutaro-Machi, Chuo-Ku, Osaka 541-0056 Japan
Tel:	 +81 (0) 6-6271-1395
Fax:	+81 (0) 6-6271-1394
Email: osaka@boi.go.th
SEOUL
Thailand Board of Investment, Seoul Office
#1804, 18th
Floor, Koryo Daeyeongak Center,
97 Toegye-ro, Jung-gu, Seoul, 100-706, Korea
Tel:	 +82-2-319-9998
Fax:	+82-2-319-9997
Email: seoul@boi.go.th
MUMBAI
Thailand Board of Investment, Mumbai Office
Express Tower, 12th
Fl., Barrister Rajni Patel Marg,
Nariman Point, Mumbai, Maharashtra 400021
Tel: 	 +91-22-2204-1589-90
Fax: 	+91-22-2282-1525
Email: mumbai@boi.go.th
NEW YORK
Thailand Board of Investment, New York Office
7 World Trade Center, 34th
Floor, Suite F,
250 Greenwich Street, New York, New York 10007, U.S.A.
Tel: 	 +1 (0) 212 422 9009
Fax: 	+1 (0) 212 422 9119
Email: nyc@boi.go.th
Website: www.thinkasiainvestthailand.com
LOS ANGELES
Thailand Board of Investment, Los Angeles Office
Royal Thai Consulate-General, 611 North Larchmont Boulevard,
3rd
Floor, Los Angeles CA 90004, U.S.A.
Tel: 	 +1 (0)-323-960-1199
Fax: 	+1 (0)-323-960-1190
Email: boila@boi.go.th
FRANKFURT
Thailand Board of Investment, Frankfurt Office
Investment Section, Royal Thai Consulate-General
Bethmannstr. 58,5.0G
60311 Frankfurt am Main,
Federal Republic of Germany
Tel: 	 +49 (069) 92 91 230
Fax: 	+49 (069) 92 91 2320
Email: fra@boi.go.th
PARIS
Thailand Board of Investment, Paris Office
Ambassade Royale de Thaïlande
8, rue Greuze, 75116 Paris, France
Tel: 	 +(33-1) 56 90 26 00
Fax: 	+(33-1) 56 90 26 02
Email: par@boi.go.th
STOCKHOLM
Thailand Board of Investment, Stockholm Office
Stureplan 4C 4th
Floor, 114 35 Stockholm, Sweden
Tel:	 +46 (0) 8463 1158, +46 (0) 8463 1174-75
Fax:	+46 (0) 8463 1160
Email: stockholm@boi.go.th
SYDNEY
Thailand Board of Investment, Sydney Office
Suite 101, Level 1, 234 George Street, Sydney,
New South Wales 2000, Australia
Tel: 	 +61-2-9252-4884
Tel: 	 +61-2-9252-4882
Email: sydney@boi.go.th
Thailand Board of Investment
www.boi.go.th
Think Asia, Invest Thailand

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Thailand's Automotive Industry - The Next Generation (2018)

  • 1. THAILAND’S AUTOMOTIVE I N D U S T R Y THE NEXT-GENERATION Thailand Board of Investment www.boi.go.th
  • 2. Source: 1 Ministry of Commerce 2 OICA as of March 2017 INDUSTRY OVERVIEW The world is embracing to cleaner and smarter society while people’s mean of transportation like automobile also takes a step further to the next generation with more fuel-efficient and environmentally friendly. In 2016, 94 million automobiles were produced worldwide, the highest Source: 1 Bloomberg and International Energy Agency (IEA) 2 Organization of Motor Vehicle Manufacturers (OICA) Note: * Year-to-year growth rate (2015-2016) ** Commercial vehicles’ definition by OICA include light commercial vehicles, heavy trucks, coaches and buses. number in the history. Yet, those vehicles are embracing the new breakthrough technology. Ranging from hybrid to battery electric vehicle, the world aims to have EV at 40% market share of all automobile in 20401 . World’s Automobile Production 20162 Units(Million) 5 10 15 20 25 30 China USA Japan Germany India SouthKorea Mexico Spain Canada Brazil France Thailand UK Turkey CzechRep. 1.351.491.821.942.082.162.372.893.60 4.234.49 6.06 9.20 12.20 28.12 Cars Commercial Vehicles** World’s Production: 94.10 Million (+4.62%)* Thailand: 1.94 Million (+1.80%)* THAILAND AUTOMOTIVE INDUSTRY Thailand automotive industry has been significantly developed for over 50 years. The industry contributed 12% of the GDP1 with more than 1.94 million vehicles produced and worth USD 27 billion in 2016. These successes ranked the country as the largest automotive producer in Southeast Asia and 12th in the world. As an “Automotive Hub of Asia”, Thailand continuously accelerates its next-generation automotive industry to follow the S-Curve promotion with higher value-added production and also strives for alignment of automotive industrial policy to align with environmental protection policy. Automotive Producer in Southeast Asia in 2016 One-Ton Pickup Producer in the world in 2016 Commercial Vehicle Producer in the world In 2016 Automotive Producer in the world in 2016 1st 2nd 6th 12th Thailand Automotive Industry Ranking2
  • 3. Source: 1,2 Thai Automotive Industry Association and Thailand Automotive Institute Thailand expects to increase its production to 3,500,000 motor vehicle units in 2020 or 80% increase from 20161 . Since Toyota and Nissan established their first production plant in 1962, Thailand automotive industry has been continuously developed and become well established over decades. Nearly every Japanese car makers and many leading US, Europe, and China automotive companies have their production plants in Thailand and many of which set their regional headquarters in the country. These auto assemblers also attracted more than 710 auto part makers and 1,700 supporting companies to the country2 . These auto part suppliers are all the most important contributors who help shape the industry’s structure with its completed supply chain till these days. Assemblers (18 car and 9 motorcycle companies) Tier 1 Suppliers (710 auto part companies)Foreign majority 58% Thai majority 39% JV 3% Auto Assemblers Tier 2 & 3 Suppliers (1,700+ companies) Vehicles Produced 1.9 3.5 2016 2020 [Million Units] Source: 1 Thailand Automotive Institute as of February 2017 Note: * Compound Annual Growth Rate (2009-2016) AUTOMOTIVE ASSEMBLERS Motor Vehicle Thailand produced 1,944,417 motor vehicle units in 2016. More than half of the total production is one-ton pickup which shared 57% along with 41% for passenger car and 2% for commercial car. The production numbers keep growing remarkably since 2009 which 9.93% increase annually. In 2016, Thailand had doubled its car production compared to 2009. Thailand Car Production 2009-20161 Units(Million) 0.5 1 1.5 2 2.5 3 2009 2010 2011 2012 2013 2014 2015 2016 1.941.911.88 2.452.45 1.46 1.65 1.00 Passenger Car One-Ton Pickup Commercial Car 9.93%* Thailand exported 1,188,515 automobiles in 2016 which made more than USD 18 billion to the country while export value increased at the faster pace than export volume since 2009, 14.08% and 11.95% respectively. With 18 auto assemblers, Thailand’s automotive industry will help accelerate the economy of Thailand to the even larger and stronger.
  • 4. Source: 1 Thailand Automotive Institute as of February 2017 2 World’s Top Export 3 Ministry of Commerce Note: * Compound Annual Growth Rate (2009-2016) Exchange rate (BOT, March 1, 2017): USD 1 = THB 34.99 18 Auto Assemblers in Thailand Thailand Car Export Unit and Value 2009-20161 Value(USDBillion) 5 10 15 20 25 Units(Million) 0.5 1 1.5 2 2009 2010 2011 2012 2013 2014 2015 2016 Units Value 14.08%* 1.191.201.131.111.02 0.74 0.90 0.54 7.18 11.57 9.81 13.83 14.55 15.03 16.91 18.06 Source: 1,3 Thailand Automotive Institute and The Federation of Thai Industries 2 World’s Top Exports Note: Commuter has less than 250 cc, Sport has more than 250 cc, CBU: Complete Built Unit, CKD: Completely Knocked Down, * CKD is not included ** CKD is not included but import is included Motorcycle Motorcycle is another remarkable product of Thailand as we are one of the largest production hubs of the world with 1,820,358 productions in 20161 . All 9 motorcycle assemblers help contribute the accelerated growth of the motorcycle production which bring the country to be the world’s 7th largest motorcycle exporter accounted for more than 5% of all motorcycle that were exported around the world in 20152 . The domestic demand reached to 1,738,231 units sale in 2016, 6.05% increased from 20153 . Motorcycle Production, 2016* Motorcycle Domestic Sale, 2016** Motorcycle Export, 2016 25% 75% Commuter Sport 1,820,358 5% 9% 86% < 125 cc 126 - 150 cc > 151 cc 1,738,231 68% 32% CBU CKD 924,917 Thailand ranked 2nd biggest automobile exporter in Asia in 20152 . The largest export destination includes Australia, the Philippines, Indonesia, Japan and Malaysia3 . Thailand’s Largest Automotive Export Destinations AUSTRALIA THE PHILIPPINES INDONESIA 1 2 3
  • 5. Source: 1,2 Thailand Automotive Institute Source: 1 Thailand Automotive Institute 2 Thai Auto Parts Industry Association Note: * Compound Annual Growth Rate (2009-2016) Exchange rate (BOT, March 1, 2017): USD 1 = THB 34.99 Auto Parts Thailand’s auto parts industry has always been a strong supporting factor contributing to the fast growing of Thailand’s automotive industry. More than 60% of 100 largest auto part suppliers in the world have their production hub in Thailand. Local manufacturers also supply for 80- 90% of the parts used in auto vehicle production in the country2 . Export of motorcycle in Thailand also shows the favorable trend of increase in value. In 2016, export value rose to USD 1.51 billion while export volume was 924,917 units1 . The number strongly demonstrates the more value- added production of Thailand which is the major development goal of the country. More R&D and technologies are expected to increase competitiveness and approaching to the next-generation automotive industry. Value(USDBillion) 1 2 3 4 5 6 7 8 2009 2010 2011 2012 2013 2014 2015 2016 7.43 7.117.27 6.89 6.25 5.255.13 3.66 OEM Engine Spare Part Other 10.64%* Thailand Auto Parts Export Value 2009-20162 Examples of Auto Parts Makers in Thailand In 2016, Thailand’s auto parts export value increased 4.54% from 2015 and reached USD 7.43 billion. Nearly 71% of the export value is from Original Equipment Manufacturers (OEMs) while engine has the highest growth at 34.59% increase from 20151 . Motorcycle Assemblers in Thailand
  • 6. Plug-in Hybrid Electric Vehicle The world is transitioning to the next- generation automobile of which Thailand also ramps up its competitiveness on this trend especially PHEV. Mercedes- Benz and BMW just established their PHEV production plants as well as the plan of PHEV and EV plant of FOMM Corporation.** The future of PHEV in Thailand is getting brighter with strong support from both public and private sector. Eco Car Eco Car E85 14% (<100 g/km CO2 Emission) 12% (<100 g/km CO2 Emission) 17% (>100 g/km CO2 Emission) Excise Tax for Eco Car Source: 1 Thailand Automotive Institute 2 Bangkok Post Note: * Eco car: Ecology car which CO2 Emission less than 100 g/km ** FOMM Corporation is a Japanese company which develop and produce compact electric vehicles. Eco Car Eco car* is Thailand’s product champion1 since the country embarked to the eco car promotion policy in 2007. In 2015, all eco car reached 15% market share of all domestic sales with Nissan, Mitsubishi and Toyota being the three biggest producers2 . Thailand has successfully drawn domestic demand and this year, 2017, second-phase production is starting with the excise tax cut down to 12-14% from 17%. SUPPORTING INDUSTRIES Thailand is internationally recognized for its high quality vehicles and parts which resulted from the strong supporting industries ranging from plastics, tires, oil & gas, lubrication oil, electronics, machinery and many more. Automotive electronics is one of the country’s focus and supported as ‘Smart Electronics’ hub. With more than 1,700 suppliers in all supporting industries which help complete the country’s supply chain, Thailand is the best place for the automotive production of the world. Examples of Supportive Suppliers in Thailand OPPORTUNITIES Thailand is ramping up our competitiveness in the next-generation of automobile by providing more incentives as well as the development of infrastructures to further enhance the investment-friendly environment.
  • 7. Biggest Domestic Sale Big Bike Brands 2016 With strong support from the government on tax incentives as well as the strengths of automotive industry make Thailand a high-potential hub of big bike production. The increasing number of Free Trade Agreement helps big bike export grows impressively, especially in ASEAN and ASEAN+3 (China, Japan and South Korea)4 . Source: 1,3,4 Thailand Automotive Industry 2 Department of Land Transport Note: * Big Bike or sport motorcycle is categorized by size of engine exceeding 250 cc. ** Compound Annual Growth Rate (2010-2016) Exchange rate (BOT, March 1, 2017): USD 1 = THB 34.99 Big Bike Big bike* is making an incredible profit in Thailand since the country declared its big bike production promotion in 20121 . Thailand produced more than 400,000 big bikes in 2016 which increase 27.68% annually since 2010. Domestic demand also increases dramatically which Triumph, BMW and Ducati ranked top 3 for the biggest sales in 20162 . These global leading companies all have their production plants in Thailand. Moreover, Harley Davidson, a well- known motorcycle brand, also recently established its Regional Training Center in Thailand. Units(Thousand) 100 200 300 400 500 2010 2011 2012 2013 2014 2015 2016 455.08 374.89358.72346.45 257.52 174.00 105.04 27.68%** Thailand Big Bike Production 2010-20163 Source: 1 Bloomberg and International Energy Agency (IEA) 2 Electric Vehicle Association of Thailand 3 SCB Economic Intelligence Center 4 Toyota Motor Thailand Note: * Electricity Generating Authority of Thailand, Metropolitan Electricity Authority, Provincial Electricity Authority, PTT Public Company Limited 25 Million 1.2 Million EV cars in the world in 2035 30% Market Share EV Cars in Thailand in 2036 7% Market Share In 2035, EV car in the world will reach 30% market share1 . Thailand also expected to have 1.2 million EV cars2 with more than 690 charging stations nation-wide3 . Toyota and Panasonic are planning to establish the EV battery production plant in Thailand as well4 . Fuel cell vehicle (FCV) is another upcoming trends of which Toyota is planning to expand its FCV to Thailand in this near future. Electric Vehicle All 690 charging stations is expected to finish in 2036 by the collaboration of EGAT, MEA, PEA and PTT.*
  • 8. Abundant Skilled Labor Thailand has abundant of skilled labors. There are more than 700,000 labors in the automotive industries in 20161 covering in every process of the production in Thailand’s automotive industry. With 29 universities and other institutes which provide automotive and mechanical engineering programs, it is forecasted that, in 2021, 61% of all workforces in Thai automotive industry are high-skilled labor with high vocational diploma or above, 27% with bachelor’s in engineering degree and 5% with master’s degree or above2 . Many auto assemblers in Thailand, i.e., Isuzu, Toyota and Honda, have their own employee training programs which help improve their competitiveness and efficiency. Thailand’s Human Resource in Automotive Industry 2010-20163 People(Thousand) 200 400 600 800 2010 2011 2012 2013 2014 2015 2016F 700 669 627 586 545 501483 6.38% Source: 1,3 Thailand Automotive Institute (TAI) 2 Electric Vehicle Association of Thailand (EVAT) Source: 1 Port Authority of Thailand Note: * EEC: Eastern Economic Corridor Development Project WHY THAILAND? By 2021, Thailand is expecting to be a global green automotive production base with advanced technology implementation. A half century of profession makes Thailand the best investment destination for the next generation automobile of the world. Geographical Advantage Situated at the center of Indochina peninsula, Thailand has the perfect location connected to 2 billion people in Southeast Asia and China by land and by sea with world-class infrastructure Eastern Economic Corridor: EEC As one of the promoted industries in 13,285 km2 of EEC*, automotive production is reinforced and developed by supporting facilities and special investment policies. The EEC will also provide National Automotive Tire and Testing Center, the first and only provided. The third phase expansion of Laem Chabang deep-sea port is also expected to provide export capacity up to 3 million cars, one of the busiest sea port in the world1 . automotive testing center in Southeast Asia which will be ready for car and tire makers in 2018, offering international standard automotive and tire tests. This will help strengthens the position of Thailand as world automotive manufacturing hub.
  • 9. Excellent Government Support The Government sees automotive industry as a cornerstone of the Thai economy with strong support from many organizations including TAI, TAIA, EVAT and TAPMA*. The Government’s Master Plan for Automotive Industry sets the goals for Thailand to be a global green automotive production base with strong domestic supply chains which will create higher value for the country by 2021. Strong Supporting Organizations Note: * TAI - Thailand Automotive Institute, TAIA - The Thai Automotive Industry Association, EVAT - Electric Vehicle Association of Thailand, TAPMA - Thai Autoparts Manufacturers Association Research and Development Most of the auto assemblers in the world established their R&D and training centers in Thailand serving Southeast Asia and Asia Pacific. This emphasizes THAILAND Automobile R&D Centers that Thailand is moving up the value chain to more value added automotive production. Note: * LCV: Low Consumption Vehicle ** PPV: Pick-Up Passenger Vehicle Ministry of Industry Administer and manage the country’s policies and promote and support industry and investment as well as entrepreneur. Thailand Automotive Institute Support and coordinate with private and government sectors as well as provide necessary services for the automotive industry. The Thai Automotive Industry Association Promote the automotive industry including increases competitiveness of automotive manufacturer and assembler. Electric Vehicle Association of Thailand Support knowledge exchange and technology on EV as well as consult on related regulation, standardization and research. Toyota Motor Asia Pacific Engineering and Manufacturing Support for car development and technology in 11 countries in Asia Pacific, Africa, and South Africa in 4 research fields including product planning, engineering design, evaluation, and localization. Nissan Technical Center South East Asia Support for car development in 6 Nissan’s production site across ASEAN countries. Responsibility for all R&D processes following the vehicle physical design stage for models marketed in the ASEAN region. Isuzu Technical Center Of Asia Covers each single scope of LCV* and PPV** vehicle research and development for the whole word including product planning, industrial design, engineering design, CAE analysis, prototype work, and validation and experiment work. Honda R&D Asia Pacific Elevated to be the automobile design and R&D center in 12 countries across Asia and Oceania. Focused on advanced product planning, styling design, engineering, and automotive test. Mitsubishi Motors Proving Ground First outside Japan research and development proving ground. A Multi- purpose test track, a noise, vibration, and harshness test site which serving Mitsubishi Motors Thailand’s in conduction pre- production trials.
  • 10. Note: * Exemption of import duty on machinery and raw or essential materials used in manufacturing export products ** Project must have structural welding and spray painting process. Plans must be approved by BOI Note: * Exemption of import duty on machinery and raw or essential materials used in manufacturing export products INVESTMENT INCENTIVES BOI Incentives BOI recognizes the importance and value of the automotive industry, and offers a wide range of tax and non-tax incentives for projects that meet national development objectives. Non-Tax Incentives These activities also receive the following non-tax incentives: Permit to bring in expatriates Permit to own land No restriction on foreign currency Tax Incentives GROUP ELIGIBLE ACTIVITIES INCENTIVES Corporate income tax exemption Exemption of import duty* A1 Research and development in automotive industry and automotive training centers 8 years (no cap)  A2 • Manufacture of Vehicle Parts Using High Technology • Manufacture of Automobile Parts for Safety Parts and Energy-saving Parts • Manufacture of Parts for Hybrid, Electric Vehicle (EV) and Plug-in Hybrid Electric Vehicles (PHEV) Automobile • Manufacture of Rubber Tires for Vehicles • Manufacture of Fuel Cells 8 years  A3 • Manufacture of Automobile Engines -- Project must have pressing of parts, not less than 4 out of 5 parts, as follows: Cylinder Head, Cylinder Block, Crankshaft, Camshaft and Connecting Rod • Manufacture of Fuel System Parts • Manufacture of Transmission System Parts • Manufacture of Turbocharger • Manufacture of Motorcycles (except less than 248 cc engine displacement) 5 years  GROUP ELIGIBLE ACTIVITIES INCENTIVES Corporate income tax exemption Exemption of import duty* A4 • Assembling of Engine • Manufacturing of Fuel Pipe/ Tube • Manufacture of Engine System Parts (Except Turbocharger • Manufacture of Steering System Parts • Manufacture of Cooling System Parts • Manufacture of Exhaust System Parts • Manufacture of Air Conditioning System Parts • Manufacture of Ultimate Tensile Strength Steel • Manufacture of Ball Bearing for Vehicles 3 years  B1 • Manufacture of General Automobile • Manufacture of Other Vehicle Parts • Manufacture of Motorcycles (except less than 248 cc engine displacement)** - 
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China Tel: +86-21-5260-9876, +86-21-5260-9877 Fax: +86-21-5260-9873 Email: shanghai@boi.go.th BEIJING Thailand Board of Investment, Beijing Office Royal Thai Embassy, No.21 Guanghua Road, Chaoyang District, Beijing, 100600, P.R. China Tel: +86-10-8531-8755 to 8757, +86-10-8531-8753 Fax: +86-10-8531-8758 Email: beijing@boi.go.th GUANGZHOU Thailand Board of Investment, Guangzhou Office Investment Promotion Section, Royal Thai Consulate-General, No.36 Youhe Road, Haizhu District, Guangzhou, P.R. China 510310 Tel: +86-20-8385-8988 Ext. 220-225, +86-20-8387-7770 (Direct line) Fax: +86-20-8387-2700 Email: guangzhou@boi.go.th TAIPEI Thailand Board of Investment, Taipei Office Taipei World Trade Center, 3rd Floor, Room 3E40 No.5 Xin-Yi Road, Sec. 5 Taipei 110, Taiwan R.O.C. Tel: +886-2-2345-6663 Fax: +886-2-2345-9223 Email: taipei@boi.go.th TOKYO Thailand Board of Investment, Tokyo Office Royal Thai Embassy, 8th Floor, Fukuda Building West, 2-11-3, Akasaka, Minato-ku, Tokyo 107-0052 Japan Tel: +81 (0) 3-3582-1806 Fax: +81 (0) 3-3589-5176 Email: tyo@boi.go.th OSAKA Thailand Board of Investment, Osaka Office Royal Thai Consulate-General, Bangkok Bank Building, 7th Floor, 1-9-16 Kyutaro-Machi, Chuo-Ku, Osaka 541-0056 Japan Tel: +81 (0) 6-6271-1395 Fax: +81 (0) 6-6271-1394 Email: osaka@boi.go.th SEOUL Thailand Board of Investment, Seoul Office #1804, 18th Floor, Koryo Daeyeongak Center, 97 Toegye-ro, Jung-gu, Seoul, 100-706, Korea Tel: +82-2-319-9998 Fax: +82-2-319-9997 Email: seoul@boi.go.th MUMBAI Thailand Board of Investment, Mumbai Office Express Tower, 12th Fl., Barrister Rajni Patel Marg, Nariman Point, Mumbai, Maharashtra 400021 Tel: +91-22-2204-1589-90 Fax: +91-22-2282-1525 Email: mumbai@boi.go.th NEW YORK Thailand Board of Investment, New York Office 7 World Trade Center, 34th Floor, Suite F, 250 Greenwich Street, New York, New York 10007, U.S.A. Tel: +1 (0) 212 422 9009 Fax: +1 (0) 212 422 9119 Email: nyc@boi.go.th Website: www.thinkasiainvestthailand.com LOS ANGELES Thailand Board of Investment, Los Angeles Office Royal Thai Consulate-General, 611 North Larchmont Boulevard, 3rd Floor, Los Angeles CA 90004, U.S.A. Tel: +1 (0)-323-960-1199 Fax: +1 (0)-323-960-1190 Email: boila@boi.go.th FRANKFURT Thailand Board of Investment, Frankfurt Office Investment Section, Royal Thai Consulate-General Bethmannstr. 58,5.0G 60311 Frankfurt am Main, Federal Republic of Germany Tel: +49 (069) 92 91 230 Fax: +49 (069) 92 91 2320 Email: fra@boi.go.th PARIS Thailand Board of Investment, Paris Office Ambassade Royale de Thaïlande 8, rue Greuze, 75116 Paris, France Tel: +(33-1) 56 90 26 00 Fax: +(33-1) 56 90 26 02 Email: par@boi.go.th STOCKHOLM Thailand Board of Investment, Stockholm Office Stureplan 4C 4th Floor, 114 35 Stockholm, Sweden Tel: +46 (0) 8463 1158, +46 (0) 8463 1174-75 Fax: +46 (0) 8463 1160 Email: stockholm@boi.go.th SYDNEY Thailand Board of Investment, Sydney Office Suite 101, Level 1, 234 George Street, Sydney, New South Wales 2000, Australia Tel: +61-2-9252-4884 Tel: +61-2-9252-4882 Email: sydney@boi.go.th Thailand Board of Investment www.boi.go.th Think Asia, Invest Thailand