Market Report

Bright future for auto part export.
Plus 3 new markets: Oceania, Middle East, and S. Africa.

President for the Cluster of Thai Automotive Parts revealed that the future of Replacement Equipment Manufacturing (REM) market is bright due to heavy investments in Thailand by automobile assemblers.  Particularly, Eco Car projects that will spawn hundreds of thousands of compact-size automobiles to the new markets including Oceania, Middle East, and South Africa.  However, there should be studies on consumer behavior which is different in each market.

Samart Deebhijarn, President for the Cluster of Thai Automotive Parts, revealed that the automotive and automotive parts industries in Thailand have been growing continuously.  The growth stems from automobile assemblers’ decisions to make Thailand the export hub.  Export value of REM products increased to the new markets in Oceania (countries and territories in the Pacific Ocean,) Middle East, and South Africa.

The new markets present good opportunities; nevertheless, each of them has different needs.  In order to enter the markets, there should be studies on the consumer behavior.  A primary research showed that, due to the Oceania market’s government policy on quality, exports to the market must contain high quality.  Nonetheless, that particular market, especially Australia and New Zealand, has free trade agreement with Thailand which gives Thai exporters a competitive edge on taxes.

Having competition from China, exports to the South Africa and Middle East markets has to be low-cost.  However, since consumers have encountered problems of Chinese products, in the next 2-3 years, they will require more products of higher quality.

To develop the automotive parts manufacturing industry, the Board of Investment (BOI) has promoted 6 projects of investment in Eco Car, totaling USD 2.1 billion which will result in investment in the auto parts industry having reached USD 150 billion by the year 2013.  It is expected that the auto parts and accessories industry will be a major part of the country’s export, totaling USD 8.6 billion, this year; 22% increase from last year.  As for the mold industry which is an essential part of auto parts manufacturing, the government has provided a USD 49.5 million financial support to around 3,500 manufacturers.  The support covers technology development, human resource development, and industrial cluster.

“It is very important that Thai auto parts manufacturers speed up their quality, standard, and production technology development as well as human resource development in order to meet the world standard.  The government should support the country’s ‘logistics’ so that it will lead to a sustainable development.”