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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.'
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
27-03-2025
- Business
- Yahoo
Empyrion Digital receives BOI approval for inaugural investment in Thailand
SINGAPORE and BANGKOK, March 27, 2025 /PRNewswire/ -- Empyrion Digital, a next-generation digital infrastructure platform, is pleased to announce that it has received approval from the Thailand Board of Investment (BOI) to develop its first data centre project (TH1) in Bangkok. The BOI approval[1] paves the way for the development of TH1, a minimum 12 MW (IT Load) facility expected to be ready for service by Q4 2026. Covering 9,960 square meters across four storeys, TH1 is strategically located in Bang Na, a growing business hub and key gateway to Thailand's Eastern Economic Corridor. Designed to be AI-ready, the facility has secured in-principle power availability and will incorporate advanced cooling solutions to support critical AI workloads. Green by design, TH1 will also be developed in line with sustainable best practices, with a focus on achieving low Power Usage Effectiveness (PUE) and Water Usage Effectiveness (WUE) to minimise environmental impact. Once completed, TH1 will also benefit from extensive connectivity to all major fibre providers in Bangkok, with future submarine cables set to integrate into the metro network. "We are pleased to receive BOI approval, paving the way for Empyrion to develop the next-generation data centre supporting Thailand's rapidly growing AI and cloud demand," said Mark Fong, CEO of Empyrion Digital. "As Southeast Asia's second-largest economy[2], Thailand presents significant opportunities for digital infrastructure growth. We are excited to commence our market entry and look forward to contributing to Thailand's ongoing digital transformation and economic progress. As with all our projects, we remain committed to operational excellence and sustainability best practices in Thailand." Empyrion Digital continues to solidify its position as a leading data centre player with this latest expansion into Thailand. With presence in markets including countries and regions such as Singapore, South Korea, Japan and Taiwan, the company continues to expand across Asia to develop a scalable and market-leading digital infrastructure platform. About Empyrion Digital Empyrion Digital is a next-generation digital infrastructure platform committed to sustainability and the highest standards of responsible operating performance. Green by design, we develop and operate robust, scalable and carrier-neutral data centres for hyperscale and enterprise customers across Asia. Headquartered in Singapore, Empyrion Digital is a portfolio company of Seraya Partners, a leading Asia infrastructure fund with USD 1.3 billion of assets under management. For more information, visit [1] Thailand BOI Approves 200 Billion Baht Investments in Rail and Digital Infrastructure Projects and Press Release [2] Source: Thailand Board of Investment (BOI) View original content to download multimedia: SOURCE Empyrion Digital Sign in to access your portfolio
