The Federation of Thai Industries (FTI) said it is studying the feasibility of some automotive component plants in the country switching to manufacture medical devices and aircraft parts, as the outlook for vehicle sales and production in the country remains challenging.
Vehicle production in the country dropped by 84% to a 30-year low of 24,711 units in April, while in the first four months of the year volumes were down by almost 33% at 478,393 units. The federation claims that many automotive parts plants have been shut for months, with workers laid off, due to the local lockdown rules and falling domestic and overseas demand due to the coronavirus pandemic.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Pinai Sirinakorn, chairman of the FTI auto parts club, said: "We want to support our members by helping them adjust their businesses so they can survive the current downturn and thrive in the long term".
The FTI estimates there are currently around 2,000 auto parts manufacturers in Thailand, of which up to 800 are FTI members.
The Thai government recently identified twelve economic sectors it wants to nurture for future growth under its recently unveiled S-curve scheme, all based on the use of advanced technologies. These include automotive; smart electronics; medical services; defence; logistics and aviation; biofuels and biochemicals; robotics for industry; digital technologies; affluent, medical and wellness tourism; agriculture and biotechnology; food; and education development.
The head of Thailand's Excise Department, Patchara Anuntasilpa, has "hinted" that he personally supports proposals recently put forward by the country's automakers for tax incentives to help lift domestic sales. He said "newly assembled vehicles sitting idle will depreciate, so helping to cut prices helps both consumers and manufacturers".
Domestic vehicle sales fell by over 34% at 230,173 units in the first four months of the year from 349,625 units in the same period of 2019, with sales plunging by 65% in April.
The Federation of Thai Industries' (FTI) earlier this month suggested the government cut vehicle excise taxes by 50% until the end of this year, while providing additional incentives worth up to THB100,000 for owners trading in cars older than 20 years. It has also suggested delaying the introduction of Euro V emission standards.
