Japan and Mainland China Battle for Dominance in Thailand’s Auto Industry
Based on an article from the Nikkei Asian Review titled “Thailand’s auto industry becomes a Japan-China battleground” published on January 13, 2023 (https://asia.nikkei.com/Business/Business-Spotlight/Thailand-s-auto-industry-becomes-a-Japan-China-battleground), the competition in Thailand’s automotive market is increasing, specifically between Japan and China. Japan, through companies like Toyota, has a long-standing presence in Thailand and has traditionally been the largest foreign investor in the country’s automotive industry. However, in recent years, China has been making a push to increase its presence in the Thai market, with companies like BYD and Great Wall Motor investing in EV production in the country.
In this context, it’s worth considering what role Taiwan’s industries, specifically its ICT and automotive supply industry, can play while China and Japan are competing for the Thai market. One potential role for Taiwan’s industries is to act as a third player in the market, offering unique solutions and technologies that differentiate them from the competition. Taiwan’s ICT and automotive supply industry, represented by companies like TSMC, UMC, Foxconn, Pegatron, Wistron, and Delta Electronics, could also have a significant impact on Thailand’s automotive market. The MIH alliance, which Foxconn founded, aims to promote collaboration and standardization in the EV industry, and Foxconn’s acquisition of a German-based Tier 1 supplier, PRETTL SWH Group, shows its aggressive expansion into the global automotive industry.
For example, Foxconn’s expertise in manufacturing and supply chain management, along with its strategy to become a player in the EV manufacturing segment, could help accelerate the development of the EV ecosystem in Thailand and support the country’s ambitious EV production goals. Additionally, Foxconn’s entry into the Thai market could bring new technologies and innovations to the country, such as advanced cabin intelligence technologies and monetizing content in the cabin, which could help to create new business opportunities and services. Furthermore, the MIH alliance could provide a platform for Foxconn and other members of the consortium to collaborate with local companies and the government to foster the development of innovative solutions in EV and EV-related technologies, as well as new business opportunities and services.
Thailand could benefit from the competition between China and Japan by having access to a wider range of technologies, innovations, and solutions, as well as the potential to attract more foreign direct investment. The competition could also drive down costs and increase efficiency, making EVs more accessible to the masses.
The National Science and Technology Development Agency (NSTDA) plays an important role in fostering collaborations between Thai companies and global automotive industry players and startups on joint R&D in the Electric Vehicle (EV) market. NSTDA can act as a facilitator, providing funding and resources for joint R&D projects between the countries and promoting technology transfer and commercialization. The NSTDA has invested in an aluminum bus builder in Thailand with the expectation of turning them into EV buses. Incumbent Thai companies like Thonburi Automotive, Thai Summit Group, and new players like Siam Cement Group (SCG), PTT, and Energy Absolute (EA) are also entering the EV market. These companies can collaborate with global automotive industry players and startups on joint R&D to develop new technologies and innovations for the EV market in Thailand. By working together, Thai companies and global automotive industry players and startups can share expertise and resources, and together develop new technologies and solutions that can benefit Thailand’s economy and society, such as developing more efficient batteries, advanced electric drive systems, and smart charging infrastructure. This collaboration can also speed up the adoption of EVs, which is essential in supporting the country’s ambitious EV production goals and reducing its carbon footprint.
In conclusion, while China and Japan are competing in the Thai market, Taiwan’s industries, specifically its ICT and automotive supply industry, can play a key role by bringing unique solutions and technologies to the market and collaborating with local companies and government to foster the development of innovative solutions in EV and EV-related technologies, as well as global / German OEM and Tier-1 companies such as Volkswagen, BMW, and Continental can also bring significant value to the table. Volkswagen has made significant investments in electric vehicle technology in recent years and has announced plans to produce 50 million electric vehicles by 2030. On the other hand, Continental is a leading Tier 1 supplier of advanced electric and electronic components and systems for vehicles and has a wide range of expertise in the field of electric vehicle technology, including battery systems, power electronics, and charging solutions. By partnering with Taiwan’s semiconductor industry and Thailand’s automotive manufacturers and suppliers, these companies can bring advanced EV technology and expertise to the Thai market, further strengthening the country’s EV ecosystem and supporting its ambitious EV production goals.
In addition to the opportunities for Taiwan’s established industries, there is also potential for collaboration between Taiwan’s startups and Thailand’s automotive market. Organizations like Mosaic Venture Lab play a key role in scouting for innovative startups in Taiwan and fostering innovation through startup-corporate partnerships, such as proof-of-concept projects. This can lead to the development of new technologies and business models that can differentiate Taiwan’s startups from the competition and create new opportunities for growth in Thailand’s automotive market.
Key takeaways:
Japan and China are competing for a larger presence in Thailand’s automotive market.
Taiwan’s ICT and automotive supply industry, represented by companies like TSMC, UMC, Foxconn, Pegatron, Wistron, and Delta Electronics, and deep tech startups could have a significant impact on Thailand’s automotive market.
Thailand could benefit from the competition between China and Japan by having access to a wider range of technologies, innovations, and solutions, as well as the potential to attract more foreign direct investment.
