Vehicle sales in Thailand are expected to grow by 16.6% to 350,000 units this year, according to PricewaterhouseCoopers Consulting. On top of that, around 200,000 vehicles are forecast to be built in Thailand for export.

Last year, domestic sales reached 300,000 units with another 175,299 vehicles produced for export.

However, while the local industry is seen as competitive, it will come under increasing threat as Thailand loses its status as a low-cost manufacturing base to countries such as China, according to Chris Loh, of PwC.

Speaking to The Bangkok Post, Mr Loh said local parts suppliers needed to shift away from component manufacturing and concentrate on innovation and product design.

"It's time for the Thai automotive parts industry to adopt a new perspective and a new approach to doing things."

He said collaboration on tools, practices and relationships, called "collaborative product commerce", would optimise capabilities.

Mr Loh also said that the Asean Free Trade Area (AFTA) represented a challenge to the Thai auto industry because local excise tax, in comparison with neighbouring markets such as Malaysia, Indonesia and the Philippines, was much higher, meaning imports would become cheaper than locally assembled products.

Thailand charges a 33% tariff on completely knocked-down (CKD) vehicles for local assembly compared with Malaysia's 20% tariff and the Philippines' 10% rate.