Closure of Thai Car Plants Sparks Investor Concerns

[webfact]

 

In a significant shake-up for Thailand’s automotive sector, the Federation of Thai Industries (FTI) has sounded the alarm over the planned closures of Suzuki and Subaru production facilities.

 

The FTI warns that these closures could erode investor confidence, casting a shadow over the country's future in car manufacturing.

 

Last month, Suzuki Motor (Thailand) declared that it would cease all factory operations in Thailand by the end of 2025. Facing falling sales and fierce competition from Chinese electric vehicles (EVs), the carmaker found it challenging to sustain its business.

 

Similarly, Tan Chong Subaru Automotive (Thailand) is set to halt vehicle manufacturing by the end of this year after enduring five straight years of financial losses.

 

Supoj Sukpisan, President of the FTI’s Auto Parts Club, noted that Suzuki has significantly struggled in the Thai market. Intense competition from Chinese automakers prompted Suzuki to cut prices by nearly 100,000 baht per unit.

 

Despite these efforts, production of Suzuki's eco-cars plunged from approximately 8,000 units per month to less than 1,000 units.

 

Subaru’s facilities, which involved importing parts from Japan and Malaysia for assembly in Thailand, also experienced declining productivity. Attempts to reverse these downturns by relocating operations have not succeeded.

 

While these closures may not have an immediate, severe impact on local auto parts businesses due to the already reduced production volumes, they risk deterring new investments in the sector. To illustrate the financial strain, Suzuki's 2023 revenue in Thailand stood at 7.03 billion baht, with a loss of 264 million baht.

 

Subaru Thailand reported a revenue of 2.07 billion baht, with losses totalling 377 million baht.

 

Despite these challenges, the FTI maintains hope. Japanese automakers still perceive Thailand's auto parts supply chain and skilled labour force as robust. Additionally, planned investments by Japanese car manufacturers are promising.

 

Toyota and Honda each plan to invest 50 billion baht, Isuzu 30 billion baht, and Mitsubishi 20 billion baht over the next five years.

 

As the industry braces for these closures, all eyes will be on future developments to gauge the long-term impact on Thailand’s automotive landscape.

 

Picture courtesy: Automotive News

 

-- 2024-06-13

 

Get our Daily Newsletter - Click HERE to subscribe

[Ralf001]

No great loss.

[Geoffggi]

Thailand putting all their eggs in one basket once again - They never learn ...........LOL

[tubber]

2 hours ago, Ralf001 said:

No great loss.

It is for those employed at the car plants.

[hotchilli]

1 hour ago, Geoffggi said:

Thailand putting all their eggs in one basket once again - They never learn ...........LOL

Thailand will become Chinas sub-contractor and a backpacker destination.. it doesn't have much else going for it.

Those with any chance are leaving Thailand for employment overseas, the remaining youngsters stuck here are either in the tourist supply chain or sex trade, or drugs 

All other employment areas are filled with migrant labour.

[nobodysfriend]

China is mass producing and selling CHEAP EVs now . Other countries can't compete to those low prices .

In Europe and the US , the will simply and considerably raise taxes on imported chines EVs .

For me , that is a wrong move , as it will delay the transition from fossil fuels to renewable power ...

Cheap electric cars ... why not ? If they are well made ...

A car is just a means of transportation , should not be a  symbol of the owners " status " .

They can make good cars in China , and they are learning fast .

[cncltd1973]

Chinese overproduction effecting global markets and destabilizing economies, just the beginning unfortunately 

[Celsius]

BYD is building a huge factory in Rayong.

 

Factory workers in Thai factories get many perks. I wonder if that will continue in Chinese factories.

[OneZero]

21 minutes ago, cncltd1973 said:

Chinese overproduction effecting global markets and destabilizing economies, just the beginning unfortunately 

Wake up Thailand.  The CCP does not have underlying good intentions.  If PRC demolishes Thai economy with dumping over production, the CCP is not concerned.  

[Ben Zioner]

42 minutes ago, nobodysfriend said:

For me , that is a wrong move , as it will delay the transition from fossil fuels to renewable power ...

Cheap electric cars ... why not ? If they are well made ...

A car is just a means of transportation , should not be a  symbol of the owners " status " .

They can make good cars in China , and they are learning fast .

You are @nobodysfriend nevertheless one has to agree.

[Ralf001]

4 hours ago, tubber said:

It is for those employed at the car plants.

Plenty of work available for those that want to work.

[Ralf001]

2 hours ago, Celsius said:

BYD is building a huge factory in Rayong.

 

Factory workers in Thai factories get many perks. I wonder if that will continue in Chinese factories.

 

they will get what is due to them according to Thai labour laws.

anything above that will be down to the unions to negotiate !!

[Celsius]

Just now, Ralf001 said:

 

they will get what is due to them according to Thai labour laws.

anything above that will be down to the unions to negotiate !!

 

yea... the problem is soon it will be Cambodians assembling the cars. Thais will not work for stupid salaries. They have been very spoiled by Japanese especially regarding year end bonuses which often reach 6 month salary.

[Ralf001]

13 minutes ago, Celsius said:

 

yea... the problem is soon it will be Cambodians assembling the cars. Thais will not work for stupid salaries. They have been very spoiled by Japanese especially regarding year end bonuses which often reach 6 month salary.

Sounds like a them problem... spoilt brats comes to mind.

[brianthainess]

Seems like only a few days ago the PM was saying that he was not concerned. 

[john donson]

fair trade ? thailand

 

308% lux tax on foreign cars

 

new enforced tax law

 

investing in a b... republic where rules can change so quickly ...

[Ralf001]

1 hour ago, john donson said:

 

 

308% lux tax on foreign cars

 

 

wow, thats a chunk.. got a link I can look at ?

[lordgrinz]

Basically, all of the current moves of the new Pheu Thai government "sparks investor concerns", and it's new PM is another village idiot.

[Ralf001]

6 hours ago, hotchilli said:

Thailand will become Chinas sub-contractor and a backpacker destination.. it doesn't have much else going for it.

Those with any chance are leaving Thailand for employment overseas, the remaining youngsters stuck here are either in the tourist supply chain or sex trade, or drugs 

All other employment areas are filled with migrant labour.

 

I work in one of the Amata industrial estates.

 

10'000's of thousands of Thai's working here.

 

there is defo migrant labour too... but it is easy to distinguish them from Thai's.

[Dmitry2222]

6 hours ago, nobodysfriend said:

China is mass producing and selling CHEAP EVs now . Other countries can't compete to those low prices .

In Europe and the US , the will simply and considerably raise taxes on imported chines EVs .

For me , that is a wrong move , as it will delay the transition from fossil fuels to renewable power ...

Cheap electric cars ... why not ? If they are well made ...

A car is just a means of transportation , should not be a  symbol of the owners " status " .

They can make good cars in China , and they are learning fast .

 

There are many questions to china's EV cars reliability. It may become a brick. Also how do you may imagine off road travelling on an EV car? May be travel only to a charger.

[BritScot]

6 hours ago, nobodysfriend said:

China is mass producing and selling CHEAP EVs now . Other countries can't compete to those low prices .

In Europe and the US , the will simply and considerably raise taxes on imported chines EVs .

For me , that is a wrong move , as it will delay the transition from fossil fuels to renewable power ...

Cheap electric cars ... why not ? If they are well made ...

A car is just a means of transportation , should not be a  symbol of the owners " status " .

They can make good cars in China , and they are learning fast .

It really amazes me the blind ignorance of some people. The blind support for electric cars. Just ignore that they are far worse for the planet and the poorest people, children included, who are held at gun point digging in poisonous mud for the chemicals needed. The scares on the earth extracting hundreds of thousands of tonnes for each battery. Hypocrisy is strong here. Years ago people went on about blood diamonds well these vehicles are "Blood Cars"! When you witness an ev fire you would never set foot in an ev.

[Caldera]

10 hours ago, webfact said:

The FTI warns that these closures could erode investor confidence, casting a shadow over the country's future in car manufacturing.

 

I'd say they are right to be concerned. Other nearby countries seem to be more attractive to investors nowadays. 

[Sydebolle]

The writing has been on the wall for a very long time - more to follow!