Since 2021, the Thai automotive industry has begun to show signs of recovery from the impact of the Covid-19 epidemic, based on the production figures. Sales and exports of automobiles in the first half of 2021 have increased from the same period of 2020 and are likely to recover in the second half of 2021 due to the recovery of the global economy and the major trading partners, particularly the investment policy to have Thailand as an automobile production base of major carmakers. However, in 2021 the automotive industry had to address several factors which were likely to negatively affect the industry's growth in the second half of this year.
1. Thai automotive industry in June 2021
According to the report on the Thai automotive industry of the Automotive Information Center and the Institute of Motor Vehicles, the number of manufactured automobiles tends to improve when compared to that of the previous year. As of June 2021, the production volume of all types of cars was 134,245 units, an increase of 87% from June 2020. Approximately 71,704 cars were produced when compared with the number of cars produced from January - June 2021 for 844,601 units or an increase for the same period of 2020 at 606,132 units or a rise of 39%. However, when compared to the period of January - June 2019 with no epidemic of COVID-19 in Thailand, the number of automobile produced decreased by 21%.
Domestic car sales
From the number of domestic car sales as of June 2021, there was an increase from the same period of the previous year. In June 2021, the volume of domestic car sales was 64,974 units or an increase of 12%% from June 2020. The number of cars sales in the country was 58,049 units when compared to the volume of car sales in the country during January - June 2021 at 372,961 units or an increase from the same period in 2020 at 328,640 units or a rise of 13%, but still less than the period of January-June 2019 with the volume of domestic car sales at 523,770 units for 29%. For the electric car group in June 2021, there were a total volume of 3,585 units or an increase of 107% from 2020 because consumers have become more familiar with the technology.
From the number of car exports as of June 2021, there was an increase from the same period of the previous year. In June 2021, the volume of car exports was 83,022 units or an increase of 66%% from June 2020, with the number of exported cars at 50,049 units when compared with the car exports during January - June 2021 or 473,489 units, a rise from the same period of 2020 at 350,550 units or an increase of 35%, but still less than the period January - June 2019 with the volume of exports at 559,861 units for 15%.
2. Analysis of the recovery trend of the automotive industry in the second half of 2021
According to data from the Federation of Thai Industries (FTI), the Thai automotive industry in the second half of 2021 is likely to recover from the previous year. This is due to the recovery in line with the global economy and major trading partners, especially in key trading partners such as Oceania, Europe and ASEAN countries following better measures to control the spread of COVID-19 and the allocation of vaccines to more people in each country, making it possible to resume more economic activities from the previous period. As a result, the purchasing power of consumers has increased and Japanese carmakers have adjusted their plans to use Thailand as a production base for some models of cars towards more exports. The Federation of Thai Industries has adjusted Thailand's car production target in 2021 to increase from 1.55 million units to 1.60 million units, with increased car exports from 0.75 million units to 0.80 million units. Meanwhile, the domestic car sales remained unchanged at 0.75 million units.
3. Supporting and negative factors in the automotive industry in the second half of 2021
- Global economic recovery, especially among major trading partners, resulting in more purchasing power of the consumers
- The use of Thailand as a production base by Japanese automakers for more exported cars abroad and back to Japan
- Shortage of semiconductor chips as raw materials for production
- Increased shipping costs
- Competition with low-cost car manufacturers from China and Indonesia
Thai automotive industry has been recovering continuously since the year 2020 due to the epidemic situation of Covid-19, of which Thailand becomes an automobile production base for many foreign carmakers. As a result, Thailand remains an interest among investors who want to have Thailand as a continuous vehicle production base, following the country’s readiness in terms of skills, labor, utilities, industrial estates, policies supported by government agencies. Thus, Thailand is well-prepared for more investors in the automotive business to support the expansion in the automotive industry and businesses. Currently, the 304 Industrial Park is a leader in land development to support the industry with lands to build industrial plants, as well as ready-made factories for rent with comprehensive infrastructure and facilities to contribute in a variety of new industries towards considerable benefits to the automotive industry as a whole.