Automotive Parts

ThailandType: Large Market; Small ShareAs Thailand increases production of advanced technology and fuelefficientpassenger vehicles and trucks, there are excellentopportunities for U.S. auto parts companies that produce electroniccomponents and fuel-efficient parts.OriginalEquipmentRank21AftermarketRank23Thailand ranks in the top 20 for U.S. exports ofautomotive parts, and is also a global production hubfor the major automotive companies throughoutSoutheast Asia.Overview of the Automotive Parts Market in ThailandThailand has gone through a downturn in theautomotive sector, with sales and productiondecreasing significantly over the past year. Despitebeing the primary hub for exports throughout theAssociation of Southeast Asian Nations (ASEAN), boththe passenger car and commercial vehicles segmenttook a big hit in 2013 and 2014. However, U.S.automotive parts exports have continued to grow,chiefly because of the need to service existing vehiclesand trucks, as well as supplying parts for export fromThailand to other ASEAN markets.The majority of Thailand’s automotive partsexports are original equipment manufacturer(OEM) parts ($4,757 million), comprising 75percent of all exports. This is followed by engines($889 million) at 15 percent and spare parts ($551million) at nine percent. Japanese companies holdover 80 percent of the domestic and regionalmarket share. Mitsubishi has recently startedexporting the country’s first U.S. bound vehicles.Ford will shift production of the Fiesta from Mexicoto Thailand in 2016. According to many companies,the extensive presence of suppliers and efficientinfrastructure continue to attract more valueaddedinvestments.Challenges and Barriers to U.S. Automotive PartsExportsDomestic sales of vehicles decreased sharply in 2014because of political strife, and some automakers andsuppliers are adopting a “wait and see” attitudetowards additional investment until the situationsubsides. For example, Mitsubishi Motors and NissanMotor announced in October delays to the launch oftheir eco-car production in the country, further addingto the country’s woes.U.S. automotive manufacturers currently control a verysmall share of the market. With the downturn in vehiclesales, Ford and GM’s vehicle production declined 23percent in 2013 and 33 percent in 2014. Mosthouseholds and businesses have put their spending onhold while they seek clarity on the political situation.Commercial vehicles have also taken a hit because ofFigure 1: 2013 Thailand Automotive MarketSales (units) 1,330,680U.S. Auto Parts Exports to $277,804,481ThailandTotal Thai Auto Parts Imports $14,846,180,247Total Domestic Vehicle 2,457,057ProductionVehicles in Operation (2012) 13,922,000U.S. Auto Parts Export +216%Growth 2009-20142015 ITA Automotive Parts Top Markets Report 27