Thailand Faces Economic Question: China and EV Cars

[webfact]

 

Thailand’s weakening manufacturing base and plummeting competitiveness are key issues ahead of a showdown on Monday between Prime Minister Srettha Thavisin and his economic ministers. Indeed, hard questions must now be asked about core assumptions underpinning the country’s economic policies.

 

Chief among them is the country’s trade and closer economic integration with China. Next, as if to highlight this, is the country’s gamble on EV car technology at the expense of its traditional automotive sector, which has been left reeling with plunging sales both at home and abroad. 

 

Prime Minister Srettha Thavisin, who has just returned from Japan, will convene a meeting at Government House to tackle the negative trends plaguing Thailand’s economy. The country’s manufacturing output has plummeted for six consecutive quarters, with factory utilisation now estimated at a mere 57%. Stimulus measures may be discussed, but experts argue that these are just short-term fixes, unable to address the deep-rooted structural issues.

 

Two glaring issues need to be addressed urgently: Thailand’s growing economic engagement with China and the rapid pivot to electric vehicle (EV) production. Since 2019, EV production has been championed as a cornerstone of Thailand’s plan to modernise its manufacturing base. However, sales trends in the last few months have questioned the viability of this strategy. In April, EV sales fell by 18.4% from March, showing no signs of recovery.

 

Moreover, the broader auto industry is in decline. Car production in Thailand decreased by 11% in April, with a 25% slump in output for the first four months of 2024 compared to the previous year. Tightening bank lending rules and a 21.49% drop in domestic car sales in April have exacerbated the situation. 

 

 

Thailand’s pivot to EV production was developed as a response to waning competitiveness and the need to align with global trade dynamics, particularly with China. However, this shift is fraught with risk. The traditional automotive industry, largely built by Japanese and Western investments, contributed significantly to Thailand’s GDP and created a robust parts manufacturing ecosystem.

 

Now, with Chinese-made EV cars potentially flooding the market due to Beijing's tax incentives, Thailand faces a dual challenge. Not only is the country’s traditional auto industry under threat, but the gamble on EV cars may not pay off as expected, given the falling sales and intensifying global trade wars. As Thailand increasingly faces economic headwinds, this week’s discussions may be critical in determining its economic future.

 

TOP: A BYD Dolphin photographed in Zhuhai, Guangdong province, China. Source: Wikipedia

 

-- 2024-05-25

 

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[Henryford]

Don't they look at what's happening in the USA and Europe. No one wants EVs. Why throw away the solid ICE industry they have now.

[ExpatOilWorker]

11 minutes ago, Henryford said:

Don't they look at what's happening in the USA and Europe. No one wants EVs. Why throw away the solid ICE industry they have now.

It might already be too late.

Suzuki will probably be the first to close down auto manufacturing in Thailand after heavy losses 📉.  Hopefully they will keep their motorcycle division open.

https://autolifethailand.tv/suzuki-thailand-revenue/

[steve187]

my views on ev's are lots of hype when they 1st came out, with various government's pushing them as a be all and end all to saving the planet, but 2nd hand prices are dropping more so then ice vehicles, on AN there is a big pro ev crowd, who try and convince all others to their merits, others like me are on the fence buying wise, but i do believe once the ev's are past their warranty period they will be really hard to sell on to others, with the price of replacement batteries. 

 

The main Japanese car manufacturers have been slow on the uptake to ev's. leaving the Chinese to corner the market, but will ev's still be in use when they are 20-30 years old as many ice vehicles are

 

I also think until a work around for all types of housing occupants to have the facilities to charge at home, they will never fully replace ice vehicles, i know many will post that technology will sort out all these problems 

ok ev lovers bring on the ' you are wrong' comments

 

[Robert Paulson]

Everyone who is into ev acts like they are so concerned about the environment. Meanwhile their last car was a gas guzzling suv. Imo almost everyone should be driving super gas efficient cars. Of course commercial vehicles get a pass. I’ve said many times on this forum I get 70 miles per gallon on highway here in Thailand and I think those numbers could even be pumped up with all energy and design put on better fuel efficiency. But nobody cares everyone wants suvs and ev’s because it’s somehow cool. They’re not cool. Drive fuel efficient cars. Drive speeds conducive to fuel efficiency… which means driving much slower to the uninitiated (for not ev and gas). Everyone speeds though. It’s dangerous, it’s bad for the environment. Nobody actually cares about the environment it’s all virtue signaling trendy yuppie bs

[2baht]

5 minutes ago, Robert Paulson said:

  Nobody actually cares about the environment it’s all virtue signaling trendy yuppie bs

Are they gaslighting wokes???

[Robert Paulson]

4 minutes ago, 2baht said:

Are they gaslighting wokes???

Idk who they are but I know they don’t actually care about the environment. It’s so painfully obvious to me. I mean do I seriously have to sit here and even convince people that the dudes driving teslas are doing it for the environment? That’s the last thing they care about. 
 

just for fun I’ll post some of the same facts here as I did in the other threads:

if you slow down when driving you save up to about 30% in fuel, either ev or gas. Notice how this isn’t common knowledge. Yeah because the gas companies hate it if youknow this. It’s due to wind resistence which is much higher at higher speeds. Should be common knowledge, but it’s not on purpose. You wanna save the environment? And other people’s lives? Slow down. That’s the truth. The evs are just bs yuppie signaling 

[2baht]

1 minute ago, Robert Paulson said:

I mean do I seriously have to sit here and even convince people that the dudes driving teslas are doing it for the environment?

No!

[TorquayFan]

Yes China poses a very serious threat to Thailand's car manufacturing industry and the Thai Govt would IMO, be well advised to take firm action to protect this sector.

 

The insidious influence of China doesn't end there. Take little Chantaburi - it now has 5 branches of Mr DIY which has sucked the life out of many local traders. The 'CJ' chain has proliferated too. China finances infrastructure projects and the 'High Speed Railway' is underway.

 

The dollar has been set aside. Thailand's fevered tourist policy encourages massive numbers of Chinese visitors.

 

This is madness for Thailand. I see China as a bad actor, taking over in the South seas and they are an imminent threat to Taiwan.

 

Thailand has to assert it's position against this major neighbour, a World power, and not just roll over.

[watchcat]

51 minutes ago, Henryford said:

Don't they look at what's happening in the USA and Europe. No one wants EVs. Why throw away the solid ICE industry they have now.

 

Because it's all about China will invade Thailand slowly but surely thais will not understand this.

 

[JBChiangRai]

I think some of you are missing the point.

 

Thailand has been extremely clever, they have tied subsidies and tax thresholds to the requirement to manufacture EV's here.

 

If you believe (as I and the Thai Government do) that EV's are inevitable and in a decade or so there will be no more manufacturing of ICE vehicles, or certainly in extremely small numbers.  Then the manufacturing community will pivot to EV's.

 

Amongst other Asian countries, Thailand has already cornered the market.  The Chinese car companies who want to sell their cars here MUST open manufacturing plants and export locally made EV's.  Thailand's future as an automobile manufacturing hub has been secured.

 

Regarding second-hand values, the evidence in Thailand is that they are on a par with equivalent ICE vehicles (you'll find a worked example for MG ZS equivalents in the Electric Vehicles in Thailand thread).  In the UK there was an interesting article yesterday that said second-hand EV's are now valued on a par with their ICE equivalents and are now much easier to sell.

 

This is inline with my own thinking.  EV's have to be priced on a par with ICE vehicles when new, as they ARE in Thailand, that is why the Thai consumer is voting with his money.  Chinese EV's can be competitive with Western & Japanese ICE vehicles and unless EV's are competitive, people won't buy them.  If I lived in the USA, I would not pay a premium for any EV.

 

The next issue is virtues signaling.  Some people may do that, we currently have 2 EV's in our household, both of us are on our 2nd or 3rd EV.  I don't give a flying whatsit about being green.  For me it's all about the superior drive and never having to queue for dinosaur juice (yes I know it's really from dead trees).

 

 

 

[Tropicalevo]

All of the rich and powerful ethnic Chinese Thais that have been pushing the 'China' agenda (behind the scenes) do not care about Thailand.

They only care about wealth, power and China.

[milesinnz]

I don't think it would be a good idea to integrate with the Titanic..

[vinny41]

From The Thai economics point of view ICE vehicles made in Thailand  provide more jobs and generated more revenue than an EV made in Thailand as the local content i.e made in Thailand for a Toyota Hilux is 90% compared to an EV made in Thailand where local content is 30% majority of parts for EV's are imported in from China

The domestic value added (domestic value add) that Thailand will receive from the production of 1 EV car is much lower than the production of ICE cars due to having to rely on importing key parts from abroad. Meanwhile, in the original product group that Thailand can produce, it is likely that prices will have to be reduced in order to compete with Chinese entrepreneurs. Because Chinese companies can import directly from China at a much lower cost than Thailand. As a result, even if an EV car factory is established in Thailand, the benefits that Thailand will receive from car production will be less than in the past.

https://brandinside.asia/car24-layoff-2024/

[Kenny202]

To think these EV cars are a flash in the pan you would have to be blind. I live in a major north eastern city and EV's appear to be everywhere. I thought Thais would be more cautious / conservative about new tech but seemingly not. Would I buy one at this point? Probably not. The lifespan of the batteries and vehicle itself, quality of the Chinese build etc as far as I'm concerned not proven yet. And a lot of hoo ha at the moment Hydrogen is the way to go. In fact I think Toyota are heading down that path which speaks volumes. I will say this though, we got a Grab taxi a few weeks ago and rode in a BYD. Was stunned by the look, interior...the whole thing controlled by a tablet and last but not least the ride and acceleration was incredible. I have a 2014 Isuzu pick up which I bought new and haven't really been in a new car for some time. I must say made me feel old, like something from a futuristic movie. My feelings are the future of modern / future cars will be like current fad type items, like phones, TVs etc. Everything is disposable these days. If you don't have the latest, and in the case of phones anything over a year old is considered obsolete / dinosaur / wouldn't be seen dead using it. I mean the luxury car market (BMW, Benz etc) are so high tech now it's pretty much like that now where cars over 3-5 years old developing issues become uneconomical to repair

[Keep Right]

EV cars are so very boring. I just hate the large screens they put in most of these cars, especially the Tesla. I bought a larger sedan in Thailand with a V6 engine. It has more Horse power and torque than I need but these cars are no longer being produced and I wanted to have one before they become extinct. I plan on driving it until I die or else am no longer able to drive in Thailand. Life is too short to drive a piece of junk. 

[Ben Zioner]

2 hours ago, steve187 said:

my views on ev's are lots of hype when they 1st came out, with various government's pushing them as a be all and end all to saving the planet, but 2nd hand prices are dropping more so then ice vehicles, on AN there is a big pro ev crowd, who try and convince all others to their merits, others like me are on the fence buying wise, but i do believe once the ev's are past their warranty period they will be really hard to sell on to others, with the price of replacement batteries. 

 

The main Japanese car manufacturers have been slow on the uptake to ev's. leaving the Chinese to corner the market, but will ev's still be in use when they are 20-30 years old as many ice vehicles are

 

I also think until a work around for all types of housing occupants to have the facilities to charge at home, they will never fully replace ice vehicles, i know many will post that technology will sort out all these problems 

ok ev lovers bring on the ' you are wrong' comments

 

There is an easy solution, the one the EU is infighting over, no more ICEs after 2035. But it can only work if the likes of Mercedes are told to shove off when they come whingeing.  Kudos to Carlos Tavares, CEO of Stellantis, who has decided to sell and support Chinese made EVs in his network. 

[TorquayFan]

Of course, EV's will have their place in the future but so inevitably, will ICE vehicles.

 

This thread's topic, "Thailand Faces Economic Question', is only focused on EV's as a part of the economic question, i.e. China's insidious takeover and undermining of it's neighbours.

 

IF I ever buy an EV it won't be a Chinese brand. For me it's hard to ignore China's economic and military aggression around this very region, that's IF I could ever forget the horrors of the covid pandemic, clearly emanating from Wuhan and it's Institute and come to that, the criminal way in which they have treated the Uighers.

 

Thailand should take great care when dealing with this Chinese regime - they are bad actors - all around the World.

[hotchilli]

6 hours ago, webfact said:

Prime Minister Srettha Thavisin, who has just returned from Japan, will convene a meeting at Government House to tackle the negative trends plaguing Thailand’s economy.

The previous and sitting government themselves... ?

[hotchilli]

3 hours ago, Kenny202 said:

To think these EV cars are a flash in the pan you would have to be blind. I live in a major north eastern city and EV's appear to be everywhere. I thought Thais would be more cautious / conservative about new tech but seemingly not. Would I buy one at this point? Probably not. The lifespan of the batteries and vehicle itself, quality of the Chinese build etc as far as I'm concerned not proven yet. And a lot of hoo ha at the moment Hydrogen is the way to go. In fact I think Toyota are heading down that path which speaks volumes. I will say this though, we got a Grab taxi a few weeks ago and rode in a BYD. Was stunned by the look, interior...the whole thing controlled by a tablet and last but not least the ride and acceleration was incredible. I have a 2014 Isuzu pick up which I bought new and haven't really been in a new car for some time. I must say made me feel old, like something from a futuristic movie. My feelings are the future of modern / future cars will be like current fad type items, like phones, TVs etc. Everything is disposable these days. If you don't have the latest, and in the case of phones anything over a year old is considered obsolete / dinosaur / wouldn't be seen dead using it. I mean the luxury car market (BMW, Benz etc) are so high tech now it's pretty much like that now where cars over 3-5 years old developing issues become uneconomical to repair

Bottom line is if the price is right Thais will buy.

[WDSmart]

Also, all the Chinese EVs I've looked at (mini-EVs) only come in left-hand drive. A car like that can be registered and driven in Thailand, but right-hand drive is what is normal here. 

[newbee2022]

6 hours ago, Robert Paulson said:

Everyone who is into ev acts like they are so concerned about the environment. Meanwhile their last car was a gas guzzling suv. Imo almost everyone should be driving super gas efficient cars. Of course commercial vehicles get a pass. I’ve said many times on this forum I get 70 miles per gallon on highway here in Thailand and I think those numbers could even be pumped up with all energy and design put on better fuel efficiency. But nobody cares everyone wants suvs and ev’s because it’s somehow cool. They’re not cool. Drive fuel efficient cars. Drive speeds conducive to fuel efficiency… which means driving much slower to the uninitiated (for not ev and gas). Everyone speeds though. It’s dangerous, it’s bad for the environment. Nobody actually cares about the environment it’s all virtue signaling trendy yuppie bs

That's nonsense.

Fuel efficiency is pathetic.

Subsequently the move to ecars is absolutely right 

[JBChiangRai]

6 hours ago, vinny41 said:

From The Thai economics point of view ICE vehicles made in Thailand  provide more jobs and generated more revenue than an EV made in Thailand as the local content i.e made in Thailand for a Toyota Hilux is 90% compared to an EV made in Thailand where local content is 30% majority of parts for EV's are imported in from China

The domestic value added (domestic value add) that Thailand will receive from the production of 1 EV car is much lower than the production of ICE cars due to having to rely on importing key parts from abroad. Meanwhile, in the original product group that Thailand can produce, it is likely that prices will have to be reduced in order to compete with Chinese entrepreneurs. Because Chinese companies can import directly from China at a much lower cost than Thailand. As a result, even if an EV car factory is established in Thailand, the benefits that Thailand will receive from car production will be less than in the past.

https://brandinside.asia/car24-layoff-2024/

 

It's not a case of Thailand makes ICE cars OR Thailand makes EV's.

 

Thailand has pushed hard to be a hub of auto manufacturing of ICE vehicles.  Nobody is suggesting those should close and Thailand instead switch to EV manufacturing.

 

Thailand has recognised that governments worldwide are moving away from ICE towards EV's and ultimately that ICE market will disappear. Thailand has said "We want some of that EV manufacturing, not only do we want some of that, we want ALL of that in Asia".  This is all happening alongside ICE manufacture.  Thailand has tied up the major Chinese EV brands to manufacture here.  It's too late for Vietnam, Cambodia et al to try and muscle in.

 

Do you not think that at some point, EV's will be taxed higher than they are currently?  I do.  And Thailand will have something to replace the disappearing ICE manufacturing.

 

 

5 hours ago, Keep Right said:

EV cars are so very boring. I just hate the large screens they put in most of these cars, especially the Tesla. I bought a larger sedan in Thailand with a V6 engine. It has more Horse power and torque than I need but these cars are no longer being produced and I wanted to have one before they become extinct. I plan on driving it until I die or else am no longer able to drive in Thailand. Life is too short to drive a piece of junk. 

 

The one thing about EV's is that they are most definitely not boring.  With 530 hp on tap and available instantaneously with 4WD and 0-100 acceleration of times under 4 seconds, they are tantalisingly exciting. 1.6M baht gets you a car that will show a BMW M5 or Benz C63s a clean pair of heels.  That 530 hp is there throughout the rev range, it's probably equivalent to a 650 hp petrol engine.

 

I do agree with you about the Tesla center screen.  Center screens are ok for infotainment but not for displaying speed and other important driver information. Indicators, wipers, lights etc should be in stalks as they are on every other mass produced car.

 

2 hours ago, hotchilli said:

Bottom line is if the price is right Thais will buy.

 

Absolutely spot on.  True all over the world, not just Thais.

[OneZero]

8 hours ago, TorquayFan said:

Yes China poses a very serious threat to Thailand's car manufacturing industry and the Thai Govt would IMO, be well advised to take firm action to protect this sector.

 

The insidious influence of China doesn't end there. Take little Chantaburi - it now has 5 branches of Mr DIY which has sucked the life out of many local traders. The 'CJ' chain has proliferated too. China finances infrastructure projects and the 'High Speed Railway' is underway.

 

The dollar has been set aside. Thailand's fevered tourist policy encourages massive numbers of Chinese visitors.

 

This is madness for Thailand. I see China as a bad actor, taking over in the South seas and they are an imminent threat to Taiwan.

 

Thailand has to assert it's position against this major neighbour, a World power, and not just roll over.

The RTN Admirals don't want you to be distracted by concern about PRC /CCP impact upon the Thai economy /Thai citizens employment.   After all, there is the issue of the Chinese submarine that RTN Admirals need for their prestige. 

 

Sarcasm: You must keep Thai National priorities in line with the RTN Admirals fantasies.

[Srikcir]

11 hours ago, webfact said:

As Thailand increasingly faces economic headwinds, this week’s discussions may be critical in determining its economic future.

It might also want to reconsider its current dedollarization policy in favor of BRIC that will denigrate its trade with Western nations and their investment into Thailand. 

Frankly, given a decade plus of economic disaster, the Western nations might be better off letting Thailand tie itself to the Chinese economic policies.

[CanadaSam]

10 hours ago, Robert Paulson said:

I get 70 miles per gallon on highway here in Thailand

 

They use litres, not gallons here, and also kilometres, not miles.

 

My car has a display of how many km per litre I am getting (Honda Jazz).

 

If you had used the local figures, I could have compared it to mine, and then, my next question would be, what type of vehicle do you have?

 

Both would have been far more helpful for all of us reading this forum, we are not all from the states, Bob!

[JBChiangRai]

31 minutes ago, Srikcir said:

It might also want to reconsider its current dedollarization policy in favor of BRIC that will denigrate its trade with Western nations and their investment into Thailand. 

Frankly, given a decade plus of economic disaster, the Western nations might be better off letting Thailand tie itself to the Chinese economic policies.

 

I agree with you on BRICS. I was stunned to see a respected English friend of mine from the hotel industry going to a BRICS meeting.  An Englishman attending any organisation out to destroy the established world order is ludicrous, Russia, China, gawd give me strength.

 

BRICS "The group was designed to bring together the world's most important developing countries, to challenge the political and economic power of the wealthier nations of North America and Western Europe."

 

Brics: What is the group and which countries have joined? (bbc.com)

[gearbox]

11 hours ago, ExpatOilWorker said:

It might already be too late.

Suzuki will probably be the first to close down auto manufacturing in Thailand after heavy losses 📉.  Hopefully they will keep their motorcycle division open.

https://autolifethailand.tv/suzuki-thailand-revenue/

Looks logical to close down...who is buying Suzuki cars? Toyota is the king here.

 

https://www.focus2move.com/thailand-vehicles-market/

[josephbloggs]

4 hours ago, WDSmart said:

Also, all the Chinese EVs I've looked at (mini-EVs) only come in left-hand drive. A car like that can be registered and driven in Thailand, but right-hand drive is what is normal here. 

Seriously? Every single EV I have seen or been in has been RHD. Not sure if you live in a parrellel universe?

[gearbox]

11 hours ago, Henryford said:

Don't they look at what's happening in the USA and Europe. No one wants EVs. Why throw away the solid ICE industry they have now.

Was there an announcement that the government is shutting down the ICE car industry, or this is a created fake issue by third grade AI assisted "journalists" ? Thailand will continue to produce ICE cars, and will also produce EV cars...1+1 = 2. Well not exactly as the internal market has a fixed size, and some will switch to EV cars, however as Thailand has a lot of FTAs, EV cars will be exported as well, so hopefully overall the industry would grow in size.