Over the past few decades, Thailand has remained one of the most successful nations in ASEAN's automotive industry. Japanese brands like Toyota, Honda, Isuzu, Mitsubishi, and Nissan have long treated Thailand as ASEAN's production and export hub, earning Thailand the nickname 'Detroit of Asia'. At its peak, Thailand's annual car exports neared 1 million units, with a supply chain system that was the most complete in ASEAN.
However, now, this automotive kingdom that once seemed impregnable is showing increasing unease. The reason is simple: Chinese car brands are rapidly transforming the entire ASEAN automotive market. Especially since the arrival of the EV era, Chinese brands have entered the Thai market almost like an 'overwhelming force'. Chinese brands keep releasing new models with lower prices and higher specs, while also sparking fierce price wars.
Consumers are naturally happy as they can buy cheaper, more high-tech EVs. But the issue is, the ones truly starting to feel panicked are actually Thai local car suppliers. Recently, multiple Thai auto-related associations, including the Thai Automotive Parts Manufacturers Association (TAPMA) and the EV Association, have publicly demanded the government raise taxes on imported Chinese EVs, while also strengthening local content (localization rate) regulations, hoping to protect the local automotive industry.
Many people might think: 'Isn't it great to have cheap EVs? Why would suppliers be afraid?' Because a truly powerful automotive industry is never just about 'selling many cars', but about whether there is a complete industrial chain behind it. For decades, Japanese factories in Thailand built not just assembly plants, but a whole complete ecosystem. From engines, gearboxes, exhaust systems to steel, wiring harnesses, plastic parts, and electronic modules, almost all involved numerous local suppliers. It was precisely this that allowed Thailand to build thousands of automotive-related companies and support a large workforce.
But after the EV era began, the entire game rules started to change. Because many Chinese EV companies adopt the vertically integrated (vertical integration) model. Simply put, they produce a lot of core parts themselves, or directly use existing Chinese supply chains, rather than supporting local suppliers on a large scale like Japanese brands did in the past.
What shocked the Thai automotive industry the most was that, according to what the Thai Automotive Parts Manufacturers Association revealed earlier, there are currently about 660 auto parts suppliers in Thailand, but the companies that successfully secured orders from Chinese brands are said to be only about 18. This number explains the situation very well. In other words, although Chinese EV sales in Thailand are rising, a large number of Thai local suppliers are not truly benefiting.
Many Chinese brands have built factories in Thailand, but batteries, motors, electronic control systems, and even some chassis and electronic architectures still highly rely on the Chinese local supply chain. The result is that local suppliers get very limited orders. More realistically, when Chinese EVs start slashing prices crazily, Japanese brand sales also begin to suffer. For Thai suppliers long relying on Toyota, Honda, and Isuzu orders, this equals a 'double blow'.
On one side, Chinese brands are not giving too many orders; on the other, traditional Japanese orders are starting to decrease. According to local industry organizations, orders for some Thai suppliers have dropped significantly, with some factories starting to shorten work hours and lay off staff, while some small suppliers closed down directly. So the Thai automotive industry's demand for the government to raise Chinese EV taxes actually reflects a real concern, not that 'Chinese cars sell too much', but that the entire local automotive industry might be slowly hollowed out.
Because if in the future the Thai market only has 'selling many Chinese EVs', but local suppliers, R&D capabilities, and industrial technology do not grow in sync, then looking long-term, the entire industrial chain will actually become increasingly fragile.
In the past few years, the development speed of Chinese brands in Malaysia has also been incredibly astonishing, and the biggest advantage remains 'high specs, low price'. In the past, many consumers had doubts about Chinese cars, but now more and more people are discovering that Chinese brands not only have increasingly beautiful designs but their tech features are even starting to surpass some Japanese and Korean brands.
© 2024 Bitauto.com. All Rights Reserved.
Bitauto (www.yiche.com and www.bitauto.com) is one of the most visited automotive websites in China. We provide detailed info on Chinese car brands available in your area. Please note that the information provided on this website is based on publicly available data and is for reference only. It may not be fully updated or accurate at all times.
