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Becoming the Detroit of Asia
There is a good possibility that you have purchased a car in Southeast Asia or Australia - especially a pick-up - that it was made in Thailand. For many years Thailand has been a centre of the automotive industry. He called himself "the Detroit of Asia," and the nickname got bogged down for good reasons. It is currently the twelfth busiest car maker in the word and the biggest in Southeast Asia.
Japaneese manufacturers such as Toyota and Mitsubishi have been active in Thailand since the60s. One GM spokesman said his factory is an important production site for Asia Pacific and Africa and his cars are sold in 15 countries, Australia and New Zealand among them. What made Thailand an automobile giants?
Thailand has been imposing an 80% duty on imports of automobiles and 60% on motorbikes for three consecutive years in order to maintain production in the state. In the meantime, the Thai authorities have implemented various fiscal stimulus packages for international investment. Businesses moving to Thailand are exempted from corporation taxes for eight years. Thailand has cut business taxes by up to 50% in some areas of the state, such as the Rayong automobile capital, where GM and Ford are located.
Throughout Thailand, the country is also conveniently situated with comfortable harbours and airfields, which facilitates exports. In contrast to Indonesia and other competitive market, most automotive parts are manufactured and procured in-house - with around 1,500 distributors in Thailand today - and therefore hardly have to be imported. A free trading deal with the nine other Association of Southeast Asian Nations members is another bonus: car manufacturers in Thailand are paying zero or significantly lower customs duties for the export of cars within the area.
Labour is less expensive than in advanced countries and China, although not as inexpensive as in the neighbouring countries of South-East Asia. "In the face of competitors from countries such as Vietnam and Indonesia, which provide lower labour cost, this has contributed to maintaining investment," said Maxfield Brown, Business Intelligence Unit Managers at Dezan Shira & Associates.
The Thai Automotive Institute in 2002 announces a six-year schedule to turn Thailand into "the Detroit of Asia". "Between 2000 and 2017 automobile output in Thailand increased by 383%. Even though Thai export accounts for almost 60% of Thai output, the Thai home markets are showing indications of economic expansion, partly due to the growing Thai population.
The Southeast Asian mid-range will more than double to 400 million by 2020, as forecast by the Organization for Economic Cooperation and Development. This is a great chance for the automobile manufacturers in Thailand. Thailand-characterized in the manufacture of utility trucks - especially the one-ton pick-up trucks, such as the Chevrolet Colorado and the Ford Ranger.
After the USA, Thailand is the world's second largest pickup truck industry. A large part of the land is rustic, and pickup trucks are economic trucks for large homes, with the kids often outdoors. In Thailand GM produces only two vehicles: the Colorado and the Chevy Trailblazer SUV. He said that the pick-ups account for 42% of the Thai stock exchange.
"Our investment in Thailand continues through our distributors, our procucts and our service. "Thailand manufactured 1. 2 million trucks against 818,000 passenger coaches in 2017. On the other hand, the burgeoning manufacturer Indonesia manufactured only 234,000 utility automobiles, but 982,000 of them. However, total Thailand unit turnover increased by 18% in the first five of 2018.
The spokesman for Mercedes-Benz, who only manufactures automobiles in Thailand, said that the year 2017 will be its largest ever with 14,000 vehicles delivered. In order to make sure that the bikes keep turning, the Thai authorities want to bring environmentally sound and electrical vehicles to Thailand as part of their new, challenging $45 billion Eastern Economic Corridor initiative adopted in February.
Thailand will also offer investor discounts and quick-fix visa, as well as the option to lease property for up to 99 years. Forecasts by the Federal Thailand Investment Board predict that the state will manufacture 3 million cars by 2020, putting it in eighth place in world productions.
However, Josh Kurlantzick, Southeast Asia Sr. Fellowship at the Council on Foreign Relations, says that investor insecurity has caused insecurity. The 2006 and 2014 coup dumped car manufacturers. Neighbouring countries are also facing increased levels of rivalry, although the prospects for Thailand remain positive. "The Indonesian automobile industry has grown steadily in recent years, but is still lagging behind Thailand in terms of both volumes and complexity of the delivery chain," Brown said.