Thailand, the second largest economy of the ASEAN region, is targeting investment from Indian automotive OEMs and suppliers not just to cater to local industry but also to tap the export market.
21 Aug 2014 | 3607 Views | By Kiran Bajad
Thailand, the second largest economy of the ASEAN region, is targeting investment from Indian automotive OEMs and suppliers not just to cater to local industry but also to tap the export market.
Indian companies keen to invest in the country will have several industry friendly initiatives including a modern ...
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Thailand, the second largest economy of the ASEAN region, is targeting investment from Indian automotive OEMs and suppliers not just to cater to local industry but also to tap the export market.
Indian companies keen to invest in the country will have several industry friendly initiatives including a modern industrial park, low income corporate tax, IPR protection, well-built infrastructure and Sea Park.
According to Chanin Khaochan, deputy director of the Investment Promotion Bureau, Thailand Board of Investment, “At present, Japan is the largest investor in Thailand with all the major OEMs being present. Thailand offers a lot of potential, not just to Indian OEMs but also Tier 1 suppliers.” He was speaking in Chennai today at a CII-organised seminar on investment opportunities in Thailand for the Indian automotive sector.
He said the country offers 100 percent business ownership, no restriction on foreign currency and no local content required to start production. On the taxation side, there is import duty exemption as well as zero corporate income tax up to 8 years. To facilitate easier access, speedier clearance and convenience it has set up a one-start, one-stop (OSOS) investment centre in Bangkok.
Addressing concerns on political instability in Thailand, he said that despite the change of government and the recent military coup, this doesn’t have any impact on industrial policy. In fact, he said, investment in Thailand has seen an increase.
Thailand, the automotive hub of the ASEAN region, produced 2.45 million vehicles in 2012 and was ranked ninth globally. Vehicle volumes are expected to reach 3 million by 2015. The auto industry currently contributes 10 percent to the country’s economy.
Thailand has close to 709 Tier 1 suppliers and 1,700 Tier 2 and 3 suppliers. More than half of the Tier 1 suppliers are car part suppliers. Of a total of 100 auto suppliers, 50 have a manufacturing presence in the country with engine, interior and body parts.
Japan is the largest investor in the country followed by the US and Europe. India however ranks much lower when it comes to investment in Thailand. All the major carmakers including Toyota, Isuzu, Honda, Nissan, Suzuki, Mitsubishi, Auto Auto Alliance Thailand, Hino Motors, General Motors, BMW, Volvo Cars, Mercedes Benz and Tata Motors are present in the country. Besides these, global suppliers such as Valeo, Bosch, TRW, GKN, Denso Mitsuba and Mitsubishi Electric have a manufacturing presence in the country.
Photograph (L-R): Kanokporn Chopital, director, Thailand Board of Investment; Chanin Khaochan, deputy director of Investment Promotion Bureau and Thailand Board of Investment; Somsak Triamjangarun, Consul General of Royal Thai, R Prabhakaran, Member CII Southern Region Task Force on International Linkages) & executive director (Group Marketing and Business Development), Amalgamations Group; and J Chandrasekaran, Consultant, CII (Southern Region).