Thai vehicle production expected to grow to 2 million units in 2018
OEMs applying for Thai government's EV incentive programs
2018/04/16
- Summary
- Exports in 2018 to potentially be affected by Vietnam and U.S. trade policies
- Thai sales of passenger cars grow 23.7%; pickup trucks rise 7.7%
- Thai government approves investment incentives for HV, PHV, and EV production
- SAIC Motor-CP builds a new plant; Subaru to start local production in 2019
- Recent activities of Toyota, Isuzu, Honda, Mitsubishi, Nissan, Mazda, and Suzuki
- Recent activities of Ford, GM and SAIC Motor-CP
- (Appendix) Major OEMs Vehicle Assembly Plants in Thailand
- Production forecast by LMC Automotive: Thai light vehicle production to increase to 2.26 million units in 2021
Summary
In 2017, Thai vehicle production increased to 1.99 million units, up 2.3% from the previous year. By vehicle type, production of passenger cars grew 1.7% year-over-year (y/y) while output of commercial vehicles rose 2.7%. Among passenger cars, production of "eco-cars," fuel-efficient compact cars that comply with the government's eco-car regulations, grew only 1.4% y/y. Out of all the commercial vehicles built, output of 1-ton pickup trucks excluding passenger pickup vehicles (PPV) increased 5.4% y/y and accounted for 48.3% of total production. Sales volume in Thailand in 2017 increased for the first time since 2013, achieving 870,000 units, a 13.4% increase compared with 2016. Vehicle sales climbed owing to the economic upturn, new model launches, and the expiration of the five-year lock-up period for vehicles bought under the first-time car buyer scheme from 2011 to 2012. Meanwhile, exports from Thailand fell 4.1% y/y to 1.14 million units. While exports to Oceania increased, shipments to the Middle East dropped significantly due to political instability.
The Federation of Thai Industries (FTI) forecasts that, in 2018, vehicle production will increase 0.6% y/y to 2 million units, and sales volume will grow 3.3% y/y to 0.9 million units. Exports are projected to fall 3.5% y/y to 1.1 million units (announced in January 2018). The FTI's conservative outlook came from instability in the global economy and concern for trade policies of export counterparts.
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The Thai government set up an initiative to make the country a hub for production of electric vehicles (EVs) to attract foreign investments for high value-added and advanced industries and promote the use of green cars. In March 2017, the government approved investment incentives that exempt the manufacturers of electrified vehicles (including hybrids (HVs), plug-in hybrids (PHVs) and EVs) from corporate income taxes for a certain period. Toyota, Nissan, Honda, Mazda and Suzuki already applied for HV incentives. In addition, BMW applied for PHV incentives and Daimler for PHV and EV incentives.
Regarding production facilities, SAIC Motor-CP built a new plant with an annual production capacity of 100,000 units in December 2017 and transferred operations from the existing facility, which has an annual capacity of 50,000 units. Tata began production of their vehicles at a new contract assembler in October 2017. Subaru plans to build its vehicles in Thailand in partnership with Tan Chong Group from 2019. Mazda opened an engine machining factory at its powertrain plant in January 2018.
Related reports:
ASEAN: Vehicle sales recover, shifting from eco-car policies to EV incentives （Jan. 2018）
Thai production expected to increase 2.6% to 2 million units in 2017 （Jan. 2017）
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