“Detroit” Asia for the auto industry .. Thailand turns into a fierce battlefield between Japan and China

Thailand is one of the leading countries in the Southeast Asian region in the manufacture of auto parts and cars that operate with internal combustion engines. United and the world.
However, the traditional position of the Thai auto industry is now being shaken with the advent of electric cars, and the accompanying change in consumer preferences.
Despite this, the challenges facing the Thai auto industry did not prevent the sector from turning into a battleground for a fierce battle between Japan and China, a battle in the interest of Thailand, by attracting more investments and advanced technology from both sides.
This conflict was evident at the ceremony held by Toyota, the Japanese auto giant, in the Thai capital, Bangkok, recently, to celebrate the 60th anniversary of its first investments in Thailand. Akio Toyoda, President of the Japanese company, at the ceremony, which was published on the Japanese company’s website, reviewed the first electric truck manufactured by Toyota for emerging markets that will be produced in Thailand later, and said, “The future of Toyota and Thailand is bright and will become brighter.”
Some may view the words of the President of Toyota as a kind of courtesy and usual compliment required on those occasions, but the reality of developments in the Thai auto industry reveals that the country is turning into a backyard for major automakers in Japan, which has become the most invested in Thailand.
Toyota alone employs 275,000 employees in Thailand, and the economic contribution of these workers is about 4 percent of the gross domestic product, and since March 2022 Japan has acquired 32 percent of the balance of foreign direct investment in Thailand. Cars and the global economy as a whole pose challenges to Japan’s role in the development of the Thai auto industry.
The most prominent of these challenges is the rise of China in the field of the automotive industry, especially electric cars, which has become a new and unconventional challenge for Japanese capital that it has not encountered before in Thailand, one of its most important international markets in the automotive industry.
Several months before the Toyota ceremony, the Chinese company BYD, the electric car manufacturer, signed a deal to buy nearly a square kilometer on the eastern coast of the Gulf of Thailand, for the production of electric cars. A century, or that thanks to that deal, China has now ranked first as the largest investor in Thailand in 2022 after Japan occupied it for years, but the most important thing is that the Chinese company aims to transform its factory in Thailand into the regional center for the production of electric cars, with production starting next year.
For his part, he said to the “Economic” L. De Criss, an investment expert for a number of British hedge funds, said, “Chinese investments in Thailand have become very worrying for the Japanese, and most estimates indicate that if the Japanese do not make qualitative changes in their thinking and investment methods in Thailand, China will outperform them.”
He added, “If China succeeds in removing Japan from the auto industry race in Thailand, this will have repercussions on the status of the Japanese auto industry as a whole. During the past two years, the Chinese Great Wall Motor Company for the auto industry doubled its investments in Thailand to maintain its leading position in car sales.” And since it entered the Thai market two years ago, it employed more than three thousand employees and invested $334 million, and during the first nine months of last year it sold more than eight thousand electric cars in Thailand.
But the question some experts are asking, can Japanese and Chinese investments really save the auto industry in Thailand by pushing it to shift from excellence in manufacturing traditional motor cars to electric cars?
Here, he mentioned to Al-Eqtisadiah, Engineer Joe Ralph from the Research and Development Department of the British Vauxhall Company, that “changing the scene in the Thai auto industry will not be a simple or easy matter, and the process of transitioning from the automobile industry with traditional engines to electric cars will face a severe challenge and a major obstacle due to Thailand has a long history of developing a conventional motor vehicle supply chain, and many stakeholders will need to refresh and re-qualify their corporate management and business skills, and this drains the bulk of the investment.”
Perhaps this is precisely why the Thai government plans to motivate consumers to buy electric vehicles, by creating a fund to support up to 20 percent of the prices of new electric vehicles, and they are also reducing taxes on all types of electric vehicles, although the Thai government announced a plan to make the vehicles Electric vehicles account for 30 percent of car production by 2030. This plan seems more ambitious than reality can absorb, as electric cars do not represent more than 1 percent of new car sales in the country.
Despite the smallness of this sector, Chinese brands dominate it so far, amid expectations that the Thai auto sector will witness more competition not only between China and Japan, but also from other investors such as Taiwan, who have expressed a desire to break into the Thai market, and this has been evident. After the Taiwanese company, Foxconn, announced an attempt to produce electric vehicles in Thailand by next year.
The main problem facing Thailand is that the current plans by foreign investors aim to manufacture electric cars for local markets, with the country becoming the main center in the Southeast Asian region for the manufacture of electric vehicle parts in the future, with this the final word on who will lead the southern region East Asia in the world of cars, specifically electric ones, has not yet been resolved. There is fierce competition facing Thailand from Vietnam and Indonesia. Indeed, some international investors have become more biased towards these two countries compared to Thailand, and the reason is low wages and the availability of raw materials for the manufacture of electric car batteries, and if Vietnam or Indonesia becomes more Attractiveness in the electric car industry compared to Thailand, it could lose between 40 to 45 percent of its market share in the auto industry.
In turn, Dr. Vanda Parriot, a professor of Asian economics at the University of Warwick, explained to the Economist, “Of course, Thailand has a larger stock of foreign direct investment compared to Indonesia and Vietnam, but since 2014 the two countries have outperformed Thailand in attracting investments, in addition to their demographic superiority over Thailand. Indonesia has a population of 273 million, Vietnam 97 million and Thailand 71 million, and its population is the most aging in Southeast Asia after Singapore, and the population is expected to remain constant, and then without more supply in the labor market wages will rise, and the market does not look attractive To increase the demand for electric cars compared to Indonesia and Vietnam due to the population.
These challenges seem logical, but some believe that they ignore an important aspect represented in the escalation of the Sino-American conflict in the field of international trade, and with the United States imposing more restrictions on Chinese industries, Chinese capital wants to search for other outlets through which it can penetrate the markets. America, hence the importance of Thailand for it.
Bangkok is one of the traditional allies of the United States, and then transferring Chinese production in the electric car industry to Thailand enables Beijing to escape from the American trade restrictions on Chinese industries, specifically the automobile industry.
Also, Thailand has a strong base of expertise in the field of traditional automobile industry, and by increasing investment, its workforce can be rehabilitated to be able to deal with the manufacturing requirements of electric cars. Indeed, China adopts a policy based on promoting local talents to high-level management positions, which means Build a better relationship with the Thai community and government.
Of course, the influx of Chinese capital into the Thai auto sector means that the Japanese will continue to invest there as well, as it is difficult for them to get out of this market that they have invested in for years, which is ultimately in the interest of the Thai auto industry and its future.

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