Thailand is a significant player in the global automotive industry, particularly in Southeast Asia, with a market value of US$ 12.67 billion and ranking 10th in global vehicle production.

The country focuses on electric vehicle (EV) production and offers incentives for foreign investors seeking to establish manufacturing bases. The Thai automotive sector contributes to the nation's GDP and employment, supported by a local supply chain and the presence of international manufacturers.

Thailand aims for 30% of total vehicle production to be electric vehicles by 2030, offering various incentives such as subsidies, tax reductions, and local production mandates to promote EV manufacturing. The industry has grown at an average annual rate of 3.3% over the past decade, primarily driven by the production of one-ton pickup trucks and passenger cars.

The Thai government is committed to advancing EV production and expanding industrial capabilities, offering incentives to attract foreign investment.

Major international manufacturers such as Toyota, Honda, Mitsubishi, and Isuzu operate in Thailand, supported by a local supply chain comprising approximately 720 Tier 1 suppliers and over 1,100 Tier 2 and Tier 3 suppliers. The automotive sector contributes around 10-11% of Thailand's GDP and provides direct employment to approximately 850,000 people, with an additional 1.5 million indirect jobs supported by the industry.

The Thailand Board of Investment (BOI) offers incentives including corporate income tax exemptions, import duty waivers, and research and development (R&D) incentives.

Special economic zones and industrial estates, such as the Eastern Economic Corridor (EEC), provide infrastructure and strategic connectivity. The government also promotes EV production through targeted subsidies, tax reductions, and mandates, reaffirming its 2030 target for EVs to account for 30% of total vehicle production.

Thailand's top vehicle export destinations include the United States, China, Japan, Australia, Malaysia, and India. The country benefits from multiple free trade agreements, providing tariff advantages for Thai-manufactured vehicles in global markets. The outlook for Thailand's automotive industry remains positive, with a forecasted compound annual growth rate (CAGR) of 2.5% over the next decade, driven by the shift towards cleaner and more advanced automotive technologies.

Thailand is a major automotive producer, with over two million vehicles produced annually, making it the largest automotive producer in ASEAN and the 10th largest globally in recent years.

The industry includes both passenger cars and one-ton pickup trucks, which dominate domestic and export markets. The latter holds over 50% of the global market share for such vehicles.

Global players, including Toyota, Honda, Mitsubishi, Isuzu, and increasingly Chinese EV manufacturers such as BYD and Great Wall Motor, have operations in Thailand. They leverage the country's strategic location and free trade agreements to access regional and global markets.

Thailand's supply chain is notable, with around 720 Tier 1 suppliers and over 1,100 Tier 2 and 3 suppliers, supporting high localisation rates.

This network, strengthened by over 1,500 ISO-certified manufacturers, ensures quality and reduces reliance on imports, providing an advantage for investors seeking to establish manufacturing operations. The sector has maintained steady growth, averaging 3.3% annually over the past decade, with a projected CAGR of 2.5% over the next ten years.

Government support is essential. The BOI offers incentives, including corporate income tax exemptions of up to 15 years, land ownership rights for promoted projects, and streamlined visa processes for foreign workers.

The EV transition includes a goal of 30% EV production, approximately 750,000 units by 2030.

Measures include tax breaks, subsidies for hybrid and EV manufacturing, and infrastructure development, such as a target of 12,000 EV charging points by 2030. These efforts aim to attract investment across the EV supply chain, including battery production and related technologies.

However, challenges remain. Domestic sales hit a 15-year low in 2024, impacted by high household debt and a 70% car loan rejection rate.

Exports also face pressure due to the global shift towards EVs and competition from emerging markets such as Indonesia, which is leveraging its nickel reserves to support battery production.

Production has declined for 20 consecutive months as of early 2025, with a 17.69% year-on-year drop in the first eight months of 2024.

However, industry leaders anticipate a rebound in 2025, potentially reaching 637,000 units in light vehicle sales, driven by the launch of new models such as the next-generation Toyota Hilux and easing credit conditions.

For international investors, opportunities are strongest in EV-related ventures, where Chinese firms are already investing heavily - for example, Great Wall Motor's US$ 1.44 billion commitment - and in partnerships with local suppliers adapting to new technologies. The Eastern Economic Corridor (EEC) adds to the appeal, targeting high-tech industries with additional incentives.

However, investors must navigate a transitioning market, balancing the decline of traditional internal combustion engine (ICE) vehicles with the gradual rise of EVs, while considering regional competition and domestic economic constraints.

Thailand's automotive industry combines long-established strengths with goals for future growth. With strong infrastructure, competitive incentives, and access to regional markets, its continued success will depend on embracing the electric vehicle revolution and adapting to evolving global and domestic demands.