Suzuki to close Thailand plant, import CBUs from India, ASEAN and Japan

Suzuki Motor Corporation (SMC) has decided to close the plant of its automobile subsidiary in Thailand, Suzuki Motor (Thailand) Co by the end of 2025. The decision to shutter the Thailand manufacturing operation, which is located in Pluakdaeng, Rayong Province, was made recently as a part of a review of Suzuki’s global production structure.

Suzuki Motor (Thailand) has been witnessing much-dampened sales in Thailand. In FY2023, SMT sold a total of 10,807 cars in the domestic market and exported 1,272 units.

In a press release, the Japanese automaker, said the decision comes because “in the course of promoting carbon neutrality and electrification globally, Suzuki had been considering optimizing global production sites within the group. Consequently, we decided to close SMT plant by the end of 2025.”

Following the announcement of the eco-car project by the Thai government in 2007, Suzuki applied for the project and established SMT in 2011, after receiving approval of the project. The automobile plant started its production in March 2012, and produced around 60,000 units annually including exports. SMT, which manufactures the Swift and Celerio hatchbacks and Ciaz sedan, also sells the XL7 hybrid, Ertiga Smart Hybrid, Jimny and the Carry commercial vehicle.

SMC has stated that after the Thailand plant closure, SMT will continue its sales and aftersales services to meet the customer needs in Thailand, through importing CBUs from plants within the ASEAN region as well as Japan and India. Also, in order to contribute to achieving carbon neutrality goals promoted by the Thai government, the company will introduce electrified models including hybrid vehicles.

Meanwhile, in a similar recent development, Subaru Corporation’s local manufacturer and distributor in Thailand announced that it plans to stop production of all Subaru models by end-December 2024 and instead will import models directly from Japan.

Slowing demand for passenger vehicles amid Thailand's shift to EVs
Sales of passenger vehicles have been falling in Thailand. From their highest level of 672,460 units in CY2012, PV sales have fallen by 130% to 292,384 in CY2023. As per latest data from the Federation of Thai Industries, a total of 82,903 units were sold between January and April 2024 with April sales (17,288 units) the lowest (January: 23,412 units, February: 19,861 units, March: 22,342).

Combined annual passenger car and commercial vehicle sales in Thailand have fallen from a high of 14,36,335 units in CY2012 by 85% over the past 11 years to 775,780 units in CY2023.

Thailand is among the ASEAN countries where the shift to EVs is underway. The country aims to become a major EV manufacturing hub for domestic and export markets, and is aiming to attract US$ 28 billion in foreign investment within four years, backed by specific incentives to foster investment.

According to the International Energy Agency’s Global EV Outlook for 2024, electric car sales more than quadrupled YoY to nearly 90,000 units in 2023, reaching a notable 10% share. New subsidies, including for domestic battery manufacturing, and lower import and excise taxes, combined with the growing presence of Chinese carmakers, have contributed to rapidly increasing sales. Chinese companies account for over half the sales to date, and they could become even more prominent given that BYD plans to start operating EV production facilities in Thailand in 2024, with an annual production capacity of 150,000 vehicles for an investment of just under US$ 500 million.

Lead image: Suzuki Motor Thailand