Opportunities for Automotive OEM suppliers in ASEAN

Thailand – the automobile HUB of Southeast Asia

The demand for high-quality automotive parts in the markets of Southeast Asia and China is opening the door to new prospects and development opportunities for OEM suppliers. Typically, small and medium sized automotive suppliers are the ones to set up shop via sales and service offices. This is often followed by the question as to whether it is reasonable to continue production in Europe and then export to each individual region, or, alternatively, if it might not be better to also set up production directly in the region.

With the hope of gaining closer proximity to the Asian automobile industry, more and more European OEM suppliers are opting to set up local production sites. Thailand, the automobile HUB of the ASEAN region, offers particularly attractive conditions and market potential. Not only can production plants of Japanese car manufacturers such as HondaToyota and Suzuki be found in Thailand, but also the likes of prominent German companies such as BMW and Mercedes-Benz.

Thailand is ranked with the top ten countries overall for passenger vehicle production worldwide, even having reached the number five spot when it comes to light-duty commercial vehicles, putting it just ahead of strongholds in the automobile industry such as India, Mexico and Turkey. Over 50% of the automobiles produced in Thailand are sent abroad as an export product, which is due to the fact that companies manufacturing in Thailand are able to profit from numerous free trade agreements enabling duty-free export to countries such as Australia, China, India, Japan and South Korea.

In addition to having an infrastructure that has grown significantly over the years as well as a corresponding supply chain and solid talent pool in the automobile industry, Thailand also offers extensive state-sponsored investment promotion opportunities via the Thai Board of Investment (BOI). A detailed report of Sanet‘s investment guidance to a Bavarian joint disc manufacturing company in Thailand can be accessed by clicking here.

For useful information related to production set-up in Thailand including information on state-sponsored investment promotion available to foreign OEM suppliers, contact info@sanet.co.th.