Automotive Industry of Thailand: The Incentives & Opportunities
Thailand is a place that offers potential investment policies. This acts as the Production Base in regions which are fast developing for the manufacturing of automobiles. There have been a lot of changes over the past 50 years. This has been converted into an export hub and one of the top manufacturing regions for Automotive. Earlier Thailand was the region of auto component assembler.
Thailand stands in the 13th position among the largest automotive part exporters in the world. Thailand is even the sixth largest vehicle manufacturer all over the world. By 2020 it is the aim of Thailand that will manufacture more than 3,500,000 units of automobiles. Their aim is such because they want to bring their name to the top performer’s list in the Global market of automotive.
The automotive sector of Thailand employs above 500,000 people. The Thailand automobile industries and automobile manufacturing parts industry add to 14% of the GDP (Gross Domestic Product). This country has given space to all the leading manufacturers and producers of automobiles in the world. These companies include BMW, Nissan, Honda, Toyota, Isuzu, and Mitsubishi. If the products manufactured by all of such companies are summed up then it touches two million.
All the manufacturing companies have settled themselves in the province of Pathumthani, Chonburi, Ayutthaya, Bangkok, Rayong, and Chachoengsao. One benefit for them to settle themselves in this place is that they can supply their product to the nearest leading markets of India, China, and the ASEAN Region(which stands for the association of Southern Asian Nations).
For getting any Legal Assistance in Thailand you may consult the industry Specialists to Startup in Thailand
The structure of the automotive industry in Thailand
The Thailand industries are a very good competitor and they create a chain of industries. The company means to keep on increasing its manufacturing process and manufacturing units. Hence the suppliers are increasing their presence by setting up different Research departments and development departments. These help the companies to serve the customers even better.
The Thai market for automobiles has reached a high stage. They have their part in the leading markets all over the world just because of the Japanese automakers. These automakers have made Thailand the main Production Base. They have made Thailand the exporter of trucks as well as Eco cars. The largest manufacturer of luxury cars is Europeans and Americans.
The opportunities that are achieved by the investors
The investment schemes: government policies are the main factor that supports the automotive industry of Thailand. These policies act as the key or main factors that lend a competitive edge. Foreign investors are motivated and convinced to invest in the industry of Thailand through non-tax and tax incentives. Search incentives are provided by the government of Thailand. Few of those benefits that are provided to those investors are being mentioned:
- Exemption of import duties on machinery
- Exemption of corporate income tax for 8 whole years
- Permission granted for owning land
- Exemption on import duties on the raw materials which are used for manufacturing products for export
- Permission granted for remitting money for taking out money e in their native currency
- Permission granted for bringing experts and skilled workers for promotional activities, or for such activities where investment is required
Apart from the above-mentioned six benefits, there are some additional benefits for the companies that you are located in Prachin Buri, Nakhon Ratchasima, Pathum Thani, Ayutthaya, and Chonburi. These additional benefits include:
- Reducing the corporate income tax to 50% of the actual rate. This has been done for five long years.
- The tax has been exempted for 8 years as for The Board of Investments promotional scheme
- Personal direct tax for foreign and Thailand specialist
In the year 2019, the total vehicle cell has come down to 3.3 % from 7.1 per cent in Thailand. The vehicle sales statistics for December are that the total sales have declined by 21.4 per cent and the full-year sales have declined to 3.3%. Toyota seemed to have 31878 units. Nissan and Mitsubishi sales came down and were up by 64414 units and 88240 4 units respectively.
Personal vehicles according to the statistics of 2019 came down 20.3 per cent whereas commercial vehicles came down to 5.1 per cent. According to the Federation of Thai Industries, vehicle production statistics were expected to decline by 0.7%. In the year 2020, it was expected to reach 2 million as Exports and domestic sales at 1 million.
The total vehicle sales in the year 2019 December by all the brands come to 89285 with a total of 100.0% share. All the companies include Toyota, Honda, Isuzu, Mitsubishi, Mazda, Ford, Nissan, MG, Chevrolet, Suzuki, and others.
For exports of Automobile parts or ancillaries, you may contact us and we can help you with the formalities or even act as your Representative in Thailand.
Trade agreements for free
The investors and the automobile manufacturers of Thailand can be immensely benefited from the trade agreements of the country. Thailand is a very strong country that has free trade agreements with countries like India, China, Australia, New Zealand, and 10 other member states of the Association of Southeast Asian Nations.
Opportunities achieve from the Eastern economic corridor
Thailand has a motive to expand the manufacturing industries with the support of the eastern economic corridor. This plays great significance in bringing the next automotive industry to Thailand.
Green Vehicles for Thailand- a growing hub
The demands for fuel-efficient automobiles are in demand globally. Thailand is in the stage of progress in the production of electric vehicles. Sadly the production of such a vehicle in Thailand is very low. It adds a very small percentage to the GDP (gross domestic product) of the country. The government of Thailand is talking up policies and strategies to motivate foreign investors to consider this country as the production base.
Incentives for the production of electric vehicles
To promote EV production the Thai government has taken a lot of initiative. The country wants and urges to promotion the EV. Since the year 2009 Thailand has had three HEV models. By the year 2036 Thailand is trying to increase the number of electric vehicles to 1.2 million. They will be opting for building 690 stations worldwide.
Contact the Startup Specialists for doing business in Thailand.
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