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Business Times
25-05-2025
- Automotive
- Business Times
Thailand widens EV perks as Japan-China auto rivalry heats up
[BANGKOK] With Thailand's auto sales plunging by more than 25 per cent amid geopolitical headwinds and regional rivals nipping at its heels, Bangkok is racing to secure its status as South-east Asia's electric vehicle (EV) hub – rolling out broader tax incentives to keep both Chinese and Japanese carmakers onside. The Thai government recently sweetened the pot of tax and other incentives to cover all types of EVs, including hybrid EVs (HEVs), plug-in hybrid EVs (PHEVs), and mild hybrid EVs (MHEVs). Observers said the latest policy enhancement that cover a wide range of electric and hybrid vehicles – known as xEV – is intended in part to placate non-Chinese players in the market, particularly Japan's auto giants. Thailand Board of Investment (BOI) has been aggressively promoting battery EVs (BEVs) since 2022 with some success. Influx of Chinese BEVs Chinese auto brands such as Aion, BYD, Changan, Chery, Foton, Great Wall, Neta and MG (owned by SAIC Motor – a Chinese joint venture with Thailand's Charoen Pokphand Group) have already set up plants in Thailand. But the influx of Chinese BEVs has rattled Japanese carmakers – including Toyota, Honda, Nissan, Mazda and Mitsubishi – which have long dominated Thailand's car market with more than 90 per cent share. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up 'For the past four years, the government has mainly pushed BEVs. So many Chinese companies came to Thailand, and the existing players were not pleased with that, especially the Japanese,' said Kunat Tharasrisuthi, an analyst at Global Data, an international market research company. 'That's why (the government) had to make some changes,' he added. New tax incentives Last December, Thailand's National EV Board, chaired by Prime Minister Paetongtarn Shinawatra, announced a new package of tax incentives and regulations to promote more local production of HEVs, PHEVs and MHEVs. The package was recently approved by the Cabinet and will go into effect in early 2026. 'This policy is to make sure that Thailand would be a production hub of xEV for the world,' said BOI secretary-general Narit Therdsteerasukdi. 'We tailor-made the incentive package according to the different characteristics and demands of each (EV) segment,' he added. BOI secretary-general Narit Therdsteerasukdi says the government wants to make sure that 'Thailand would be a production hub of xEV for the world'. PHOTO: PETER JANSSEN, BT While the Japanese carmakers have lagged behind their Chinese counterparts in innovating cutting edge BEV technology, they have been more successful in launching HEV and PHEV models, which rely partly on traditional internal combustion engine (ICE) technology. Japanese auto executives tend to justify this slow path to BEVs by citing customer preferences. 'Currently demand for hybrids is bigger, much bigger than demand for BEVs, so we are focused on hybrids,' said Noriaki Yamashita, president of Toyota Motors/Thailand. 'As BEV demand increases, we will focus on BEVs,' he told The Business Times. In 2024, Thailand's car sales reached 572,675 units, down 26 per cent year on year. HEVs accounted for 21 per cent of total sales, BEVs accounted for 13 per cent and PHEVs for 2 per cent, according to Toyota Motors Research. While BEVs sales slowed in 2024, that was partly because they jumped 320 per cent year on year in 2023, as new Chinese models came on the market at prices considerably below their Japanese ICE rivals. BEVs accounted for between 70,000 and 73,000 units in 2024 to 2025. Thailand's effort to promote itself as an EV production hub follows similar model-focused tax incentive policies of the past. The kingdom's first champion model was the one-tonne pickup – the most popular vehicle on the Thai market (usually 50 per cent of sales) which has lured all the main Japanese pickup manufacturers such as Toyota, Isuzu, Nissan, Mitsubishi and Mazda to relocate their factories to Thailand, for the domestic and export markets. Thereafter, the BOI promoted local manufacturing of the 'eco cars', small passenger cars with petrol-efficient engines and low carbon emissions. Localisation efforts While providing promotional privileges to local manufacturers of pickups and eco cars, the government also put in place localisation requirements, to build up Thailand's domestic supply chain (there are over 2,000 auto parts suppliers). Japanese pickups manufactured in Thailand now use about 92 per cent locally sourced parts and components, and 88 per cent for eco car models. But as Thailand now pushes for localisation of the supply chain for xEVs, it is likely to face stiffer competition from Thailand's regional rivals such as Indonesia and Malaysia, which are also pushing for EV hub status and enjoy more dynamic domestic markets. 'We think in the short-term Thailand is likely to maintain its status as the leading automotive hub in South-east Asia, but it is facing challenges from other countries in the longer-term horizon, for example Indonesia,' said Claire Yuan, an automotive industry analyst at S&P Global Ratings. Thailand's domestic market for cars has dropped from one million per annum, prior to the Covid-19 pandemic, to around 570,000 units per annum during 2024/2025. Domestic production of automobiles (for both the domestic and export markets) has dropped from two million pre-Covid to about 1.5 million, expected in 2025. Car sales in Indonesia's domestic market last year reached about 900,000 units. Thailand's past policies of promoting pickup and eco-car production were backed by a robust domestic sales market, together with healthy exports, but the current situation of slow domestic sales in most categories could hinder xEV localisation efforts, executives warned. 'It is clear that you have to establish your production footprint where you have a sizeable domestic market,' said Martin Schwenk, president of Mercedes-Benz (Thailand). 'That is the core strategy for everyone. In Thailand, with the domestic market under pressure, it makes it very hard to localise at a high level here and to export from here.'
Bloomberg
08-05-2025
- Business
- Bloomberg
Thailand Braces For ‘Temporary' Investment Freeze As US Tariffs Remain Uncertain
Thailand may see a slowdown in new foreign direct investments due to global trade uncertainties, while the Southeast Asian country seeks to negotiate with Washington to soften the blow from the threat of a 36% tariff. New foreign investment applications could be frozen temporarily, at least while the tariff situation remains unclear during US President Donald Trump's 90-day pause on higher tariffs, according to Narit Therdsteerasukdi, secretary-general of the Board of Investment. Some companies that have already pledged investments in Thailand may also wait out the uncertainties before going ahead, he said.
New Straits Times
30-04-2025
- Business
- New Straits Times
Thailand's Q1 investment applications surge 97pct to over RM55bil
BANGKOK: Thailand attracted investment applications worth 431.20 billion baht (RM55.60 billion) in the first quarter (1Q) of 2025, up by 97 per cent compared to the same period in 2024, according to the Thailand Board of Investment (BOI). BOI secretary-general Narit Therdsteerasukdi attributed the increase to large infrastructure projects, including a fivefold surge in applications in the digital sector, driven primarily by foreign investments in data centres. "The data for the first three months of 2025 further confirms the trend observed last year when data centres and digital services became, for the first time, the top-ranked sector in terms of investment value," he said in a statement today. Narit noted that domestic and foreign investors submitted a total of 822 project applications during the January–March period, marking a 20 per cent increase from 1Q 2024. Of these, 618 applications were from foreign investors. "This underscores the increased focus by both foreign and local companies on high-tech investments in Thailand, aligning with our five-year strategy. It also reflects investors' confidence in Thailand's long-term economic potential despite current global uncertainties," he said. According to BOI records, foreign direct investment (FDI) applications during the January–March period amounted to 267.70 billion baht (RM34.50 billion), representing a 62 per cent jump from a year earlier. The BOI said Hong Kong-based companies topped the FDI rankings for the quarter, with a combined investment value of 135.16 billion baht (RM17.40 billion) or half of all FDI pledges during the period, including 72.70 billion baht (RM9.30 billion) in the digital sector alone. China ranked second with 47.30 billion baht (RM6.10 billion), primarily investments in the metal, electronics, and automotive industries. Singapore followed with 38.10 billion baht (RM4.90 billion), focused on projects in the electrical and electronics (E&E) and digital sectors. The agency added that Japan ranked fourth, with 25.10 billion baht (RM3.20 billion) largely invested in the E&E and automotive sectors, while Taiwan-based companies came in fifth with 4.76 billion baht (RM614.00 million), primarily in the E&E and automotive parts sectors. Last year, Thailand's total investment promotion applications rose by 35 per cent in value to a 10-year high of 1.14 trillion baht (RM147.10 billion). The digital sector, which includes data centres and cloud services, topped the sectoral rankings in 2024 for the first time, with a combined pledged investment of 243.30 billion baht (RM31.40 billion). The E&E sector followed closely with 231.70 billion baht (RM67.20 billion). — BERNAMA
Yahoo
17-03-2025
- Business
- Yahoo
Thai Approves $5.9 Billion of Projects to Expand Bangkok Metro System, Data-Center Network
(Bloomberg) -- Thailand approved investment applications worth a combined 200 billion baht ($5.9 billion), led by a Bangkok transit line and three data centers, giving a potential boost to the nation's lackluster economic growth. ICE Eyes Massive California Tent Facility Amid Space Constraints How Britain's Most Bike-Friendly New Town Got Built Washington, DC, Region Braces for 'Devastating' Cuts from Congress The Dark Prophet of Car-Clogged Cities Saving the Signature Sound of Washington, DC The biggest project is Bangkok Expressway and Metro Pcl's 109 billion baht investment in the so-called Orange Line to help connect Bangkok's western and eastern suburbs, according to a Board of Investment statement after its board meeting on Monday. Also approved for tax and other incentives were three data-center and cloud-services projects, the largest being China's Beijing Haoyang Cloud Data Technology Co's 72.7 billion baht plan for a facility with an information technology load of 300 megawatts in Rayong province, the BOI said. In January, social media platform TikTok won approval to invest $3.8 billion in data-hosting services. 'Ensuring that the digital infrastructure, including data centers, keeps in line with the demand of foreign investors and local entrepreneurs is essential to Thailand's competitiveness,' said Narit Therdsteerasukdi, secretary-general of the BOI. Read: Thaksin Vows Cheaper Power to Turn Thailand Into Data Center Hub The government is seeking to ramp up economic growth this year to as high as 3.5%, from 2.5% in 2024, by boosting exports, tourism and investment. Investment applications jumped 35% year-on-year to $33 billion in 2024, the most in about a decade, led by foreign firms' projects in the digital sector. The board also revised rules to encourage projects in the health-care sector by offering companies entering joint ventures with government agencies longer income-tax holidays if they build hospitals with at least 91 beds for overnight patients, according to the statement. Nvidia Looks Past DeepSeek and Tariffs for AI's Next Chapter How America Got Hooked on H Mart How Trump's 'No Tax on Tips' Could Backfire for the Working Class The Real Reason Trump Is Pushing 'Buy American' College Presidents on Trump, Tuition and Universities Under Pressure ©2025 Bloomberg L.P. Sign in to access your portfolio
Yahoo
13-03-2025
- Automotive
- Yahoo
Thailand Approves Sunwoda to Invest More Than US$1 billion in EV Battery Cell Plants
BANGKOK, March 13, 2025 /PRNewswire/ -- Thailand's Commission on the National Competitiveness Enhancement for Targeted Industries, at a meeting today, approved an investment by a unit of China's Sunwoda Electronic worth more than a billion dollars in the production of electric vehicle (EV) and energy storage system (ESS) batteries at the cell level, in a move that will strengthen the country's supply chain and support EV manufacturing for both the domestic and export markets. The Commission is chaired by the Deputy Prime Minister and Minister of Finance, Mr. Pichai Chunhavajira, who is also the Chairman of the Thailand Board of Investment (BOI). The Commission, whose secretariat is under the responsibility of the BOI, was established by law in 2017 to support new industries that add value to the economy and enhance the country's competitiveness in a sustainable manner. Sunwoda Automotive Energy Technology (Thailand) Co., Ltd. plans to build its manufacturing facilities in Thailand's Eastern Economic Corridor area. The first factory, located in Chonburi Province, will be producing lithium-ion battery cells for EV manufacturers. "Today marks a milestone in the development of Thailand's EV supply chain, as having EV battery cells produced locally will significantly reinforce our status as a manufacturing hub for EVs and hybrids, and increase the country's competitiveness," Mr. Narit Therdsteerasukdi, Secretary General of the BOI, said after the meeting. "This project will also help widen the use of ESS and solar energy in our country, and, through the hiring of thousands of Thai engineers and workers, contribute to knowledge transfer in an industry which is of critical importance for the future." The construction of Sunwoda's first Thai factory is progressing smoothly. The facility is expected to hire over 1,000 staff once production begins. The entire project, which will include manufacturing as well as research and product development, will employ a significantly greater staff, including a large number of Thai engineers and researchers. Sunwoda Automotive Energy Technology (Thailand) is a subsidiary of Sunwoda Electronic Co.,Ltd, a company headquartered in Shenzhen, Guangdong Province, China, which is engaged in the production of batteries for a wide range of electronic devices, mobility, and storage equipment. In China, in 2023, Sunwoda's SEVB brand ranked first in sales of batteries for hybrid electric vehicles (HEV) and third in sales of batteries for high-end EV. Sunwoda's battery cell manufacturing facilities in Thailand will be its first EV-related battery cell factory in the ASEAN region. Thailand has long been a hub in the conventional internal combustion engine (ICE) auto industry, ranking 10th in the world and number one in Southeast Asia as a manufacturer in 2023. Since it started promoting investment in the sector's electrification, with government policies offering subsidies, tax breaks and other incentives to manufacturers and consumers, the country has attracted significant investments in the production of EV and hybrids. Several major Chinese manufacturers of battery electric vehicles (BEV) have already started making cars in Thailand, including BYD, SAIC Motor (MG), Great Wall Motor, Hozon New Energy Automobile (Neta) and GAC Aion. Chongqing Changan Automobile is scheduled to open its Thai factory in the coming weeks, while Chery Automobile is currently building its local manufacturing facility. The Thai EV ecosystem also includes a fast-growing network of charging stations, the local manufacturing of chargers and significant car parts, and the assembly of battery packs and modules from imported cells. In 2024, total applications for investment promotion in Thailand soared 35% in value to 1.14 trillion baht, its highest level since 2014, led by large foreign direct investment (FDI) projects in data centers, cloud services, as well as semiconductor and advanced electronics manufacturing. The automotive and parts sector ranked third in terms of the value of applications with 309 projects, worth a combined value of 102.4 billion baht. For more information, please contact:Thailand Board of InvestmentTel. +66 (0) 2553 8111Website: Think Asia, Invest Thailand View original content to download multimedia: SOURCE Thailand Board of Investment (BOI) Sign in to access your portfolio
