Many Thai industries in battle for survival

[webfact]

 

Are Thai industries under threat of a massive collapse, given rapid changes in technology, fierce competition from China and the planned hike in daily minimum wage?

 

Two Japanese carmakers, Subaru and Suzuki, have announced that they will shut down their manufacturing sites in Thailand at the end of this year and next year respectively, amid shrinking demand for their vehicles.

 

More factories closing down

 

In a reflection of the direness of the situation, 1,700 factories are reported to have shut down since early last year running up to the first quarter of this year.

 

Many local factories risk going out of business because of the sluggish economic conditions, fast-changing technology, slower-than-expected recovery of the global economy and fierce competition from Chinese firms.

 

“When large firms close their businesses, thousands of suppliers would be affected,” Tanit Sorat, vice chairman of the Employers’ Confederation of Thai Trade and Industry said, referring to the pull out by the Japanese automakers, and other large firms in industrial real estates closing operations in Thailand.

 

Manufacturing activities have seen a long period of contraction as reflected in the Manufacturing Production Index (MPI) of the Office of Industrial Economics in the period December 2022 to March 2024.

 

Full story: Thai PBS 2024-06-15

 

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[Emdog]

That new rail link to China should do wonders for Thai industry: "I wonder where it went?"

[BangkokReady]

I guess we know where Margaret Thatcher's ghost went...  😬

[lapamita]

16 minutes ago, BangkokReady said:

I guess we know where Margaret Thatcher's ghost went...  😬

The highspeed train Donmuang-Bkk Airport-Pattaya-Utapao , anounced 2018 inital, and they anounced to be finalized in 2023

 555 they cut the ribbon last year, thats all

[connda]

They are building new factories left and right here in Mueang Lamphun.  I find the article a bit "alarmist."  Yes, the evolution of any industry is "an evolution." 

Factories used to look like this:

Now they look like this, but this model of manufacturing is changing.

 

Tomorrow?  Change or die.  And the most likely candidates for folding operations and going bankrupt are Western-base manufacturing corporation whose capitalistic paradigm was to offshore their manufacturing while destroying the domestic manufacturing base.  Who is going to survive in the brave new world? 

[connda]

43 minutes ago, lapamita said:

The highspeed train Donmuang-Bkk Airport-Pattaya-Utapao , anounced 2018 inital, and they anounced to be finalized in 2023

 555 they cut the ribbon last year, thats all

2123.  They forgot to roll that zero.  TIT.  Amazing Thailand.

[hotchilli]

4 hours ago, webfact said:

Are Thai industries under threat of a massive collapse, given rapid changes in technology, fierce competition from China and the planned hike in daily minimum wage?

Evolve or die.. Thailands in real trouble

[soalbundy]

2 hours ago, connda said:

They are building new factories left and right here in Mueang Lamphun.  I find the article a bit "alarmist."  Yes, the evolution of any industry is "an evolution." 

Factories used to look like this:

Now they look like this, but this model of manufacturing is changing.

 

Tomorrow?  Change or die.  And the most likely candidates for folding operations and going bankrupt are Western-base manufacturing corporation whose capitalistic paradigm was to offshore their manufacturing while destroying the domestic manufacturing base.  Who is going to survive in the brave new world? 

As far as automobiles are concerned producing cars abroad, eg. Thailand, was a necessity in order to avoid crippling import tariffs, these CKD (completely knocked down where the car is assembled from parts sent from Japan, Germany etc) agreements lowered the import tariffs, the more certain parts could be locally produced the lower the tariffs would be. In fact despite the low wages in Thailand the locally produced parts were more expensive than those from Germany because of the high labour intensity and relatively low production numbers. This all benefited Thailand because there was a technological knowledge transfer and enabled many firm start ups producing spare parts which of course was the reason for the high tariffs in the first place. As far as cars are concerned there is no extra monetary gain in producing abroad, just the opposite, it requires huge investments but without this you wouldn't be able to sell cars there at all which is why Japanese and German companies also produce in high wage countries such as the USA.

[soalbundy]

Just now, hotchilli said:

Evolve or die.. Thailands in real trouble

All high-tech countries are now suffering from low demand and higher production costs, in part due to high interest rates, Thailand is not alone, China has to export large parts of its production due to low local consumption.

[patman30]

Just wait till the railway is finished.

[Guderian]

No problem, just get TAT to start another international programme to attract the dregs of the earth here as tourists, and in the meantime raise the taxes on retired farangs to keep the government's budget healthy and pay for more handouts.

[kingstonkid]

The government seems to think that tourism solves everything.  They forget that they have to have an EDUCATION and competitive workers and prices 

[Photoguy21]

8 minutes ago, Guderian said:

No problem, just get TAT to start another international programme to attract the dregs of the earth here as tourists, and in the meantime raise the taxes on retired farangs to keep the government's budget healthy and pay for more handouts.

I thought in many cases they had already succeeded in that.

[john donson]

haha hope the new tax laws will move more farangs to greener pastures, and I might follow...

 

paying tax with getting ZERO in return... planned condo buy SCRAPED... why would I need to pay 35% more than chinese or russian tourist

[OneZero]

Some articles for perspective:

13Jun2024

Sleepwalking Toward War: Will America and China Heed the Warnings of Twentieth-Century Catastrophe? (foreignaffairs.com)

    “China’s industries cannot keep growing unrestricted at the expense of everyone else. The smartest move China could make on trade is to agree to regulate its exports in such a way that they do not make it impossible for other countries’ domestic industries to compete in important areas such as electric vehicles or solar panels and other equipment necessary for decarbonization.”

     “If China continues to flood other markets with its cheap versions of these products, a lot of countries, including some that have not been overly concerned by China’s growth, will begin to unilaterally restrict market access to Chinese goods.”

      “Unrestricted trade wars are not in anyone’s interest. Countries are increasingly imposing higher tariffs on imports and limiting trade and the movement of capital. But if this trend turns into a deluge of tariffs, then the world is in trouble, in economic as well as political terms.”

 

09May2024
Trump Is Right: We Should Raise Tariffs on China - The American Conservative

US let China manufacture everything in order to get less expensive goods.  Inexpensive products the PRC subsidized, to quote Rubio ...."with handouts, tax breaks, financing incentives, stolen intellectual property, and even slave labor."

 

08May2024

Embracing Communist China Was U.S.’ Greatest Strategic Failure | RealClearPolitics

 

 

[Mavideol]

not surprised at all, one has to wonder how they have been surviving for so long, Thailand is not known for being an industrial cheap labor country, look at their working hours, vacations, days off, they rely heavily on tourism income and even that, they are trying to kill, some of their neighbors are very happy with the lack of industries here

[RichardColeman]

7 hours ago, webfact said:

fierce competition from China and the planned hike in daily minimum wage?

Just wait until they have a high speed mail train to supply Thailand with more Chinese junk in 24 hours delivery ! That high speed line could be the death of even more Thai industry !

[JimHuaHin]

What do you expect when the local "friends" of the Chinese Communist Party have so much economic and political power in Thailand?

[zzaa09]

Perhaps the rumours that are making their rounds of Thailand firmly associating itself with BRICS are coming to fruition. 

Will certainly be an advantage than hanging on to the dying Anglophone/EU model. 

[bkk6060]

Thais love the CHinese EV's.  Who buys a Subaru or Suzuki anyway not sure I have seen more then a few of these cars on the road.

When was the last time Thailand invented or started something significant?  Most of the companies here come from someplace else.  The Internet infrastructure is pretty good, but where are the future jobs especially in technology?

Ask many people from around the world what Thailand is known for and they will tell you: Food, beaches, prostitutes and car crashes. That about explains it.

 

 

 

Edited June 15 by bkk6060

[MartinBangkok]

5 minutes ago, bkk6060 said:

Thais love the CHinese EV's.  Who buys a Subaru or Suzuki anyway not sure I have seen more then a few of these cars on the road.

When was the last time Thailand invented or started something significant?  Most of the companies here come from someplace else.  The Internet infrastructure is pretty good, but where are the future jobs especially in technology?

Ask many people from around the world what Thailand is known for and they will tell you: Food, beaches, prostitutes and car crashes. That about explains it.

 

 

 

When was the last time Thailand invented or started something significant? 

 

The answer is never (besides happy ending)

[Celsius]

Car production in Thailand down from 30,000 to 10,000 a month.

[Caldera]

9 hours ago, webfact said:

Are Thai industries under threat of a massive collapse, given rapid changes in technology, fierce competition from China and the planned hike in daily minimum wage?

 

Yes.

 

Next...

[Mason45]

54 minutes ago, Celsius said:

Car production in Thailand down from 30,000 to 10,000 a month.

With the reduction of car producing they will probably claim it a victory if the motor accidents are down hence a drop in road fatalities/