Business

Thailand’s Auto Industry Gears Up to Become Global Car Parts Powerhouse

Published

2 months ago

November 4, 2024

Thailand is driving into the future as a critical player in the global auto parts industry. With its booming internal combustion engine (ICE) and electric vehicle (EV) markets, the country is positioning itself as a leading export hub for car parts, spearheaded by industry giants like Germany’s Schaeffler Group. Here’s a closer look at Thailand’s journey to becoming an automotive powerhouse.

Thailand Revving Up as a Global Car Parts Manufacturing Powerhouse

As Thailand’s automotive sector surges forward, it’s fast becoming a pivotal player in car parts manufacturing for both ICE and EV vehicles. Major global companies, such as Schaeffler Group, are fueling this growth with new investments and expanded facilities.

Schaeffler’s Strategic Expansion: Building a Logistics Hub in Thailand

Schaeffler Group, known for its cutting-edge friction-reducing rolling element bearings, has established a massive new warehouse in Thailand’s Chon Buri province. This facility spans between 3,000 to 6,000 square meters and is set to support a wide range of vehicle components for both domestic and international markets.

Supporting the Growth of ICE and EV Markets

Micah Shepard, Schaeffler’s regional leader for vehicle lifetime solutions, emphasized that both ICE and EV auto parts markets in Thailand are expected to grow by 3-4% this year, and projections suggest continued expansion through 2025. This growth aligns with the region’s economic advancements and increasing demand for vehicle innovation.

Logistics Hub to Strengthen Global Supply Chains

Schaeffler’s Chon Buri warehouse is designed to bolster global supply chains for ICE and EV components. Jens Schuler, Schaeffler’s head of vehicle lifetime solutions, highlighted that this logistics hub would play a crucial role in meeting the needs of global car manufacturers, enabling faster distribution and streamlined supply chains across markets.

Thailand’s 30@30 Policy: Accelerating Electric Vehicle Production

Thailand’s government is shifting gears to embrace the EV market with its ambitious 30@30 policy. The goal is clear: have EVs account for 30% of total car production by 2030, marking a significant transformation from the current state, where EV production stands at just 1.2% of total output as of 2024.

Key Targets Under the 30@30 Policy

Zero-Emission Vehicles: 725,000 zero-emission cars
Electric Motorcycles: 675,000 units
Electric Buses and Trucks: 34,000 units

Transforming Thailand’s Automotive Industry

Thailand’s automotive sector, once known as the “Detroit of Asia” for its ICE production, is now embracing a greener future. The 30@30 policy is projected to attract new investments from Thai and international players, potentially boosting domestic vehicle sales and driving economic growth.

Schaeffler’s R&D Investment: Paving the Way for Automotive Innovation in Thailand

In line with its growth plans, Schaeffler is making strides to establish a research and development (R&D) center in Thailand by the first quarter of 2025. With an annual investment of around 400 million euros (approximately 14.7 billion baht), Schaeffler’s R&D efforts will focus on advancing both ICE and EV technologies to meet evolving market demands.

Thailand as a Prime Investment Destination

Thailand’s strategic location and automotive expertise make it an ideal destination for Schaeffler’s R&D center. Shepard highlighted Thailand’s unique position to serve the growing demands of new industries, particularly in automotive innovation, which could further elevate Thailand’s status as a global auto parts hub.

Key Takeaways for Thailand’s Automotive Industry

Thailand is at the brink of an automotive revolution, powered by the nation’s focus on EV production, government support, and substantial foreign investments. Schaeffler’s expansions and Thailand’s commitment to sustainable transportation solutions indicate a future filled with potential for both traditional and electric vehicles.

Summary of Thailand’s Automotive Advancements

Strong ICE and EV Parts Market Growth: Projected 3-4% growth through 2025
Schaeffler’s Chon Buri Warehouse: A logistics hub for global auto parts distribution
Thailand’s 30@30 EV Policy: Aiming for 30% EV production by 2030
R&D Investments: Innovation-focused R&D center planned for 2025

Conclusion: Thailand’s Future as a Global Car Parts Leader

With the wheels in motion, Thailand is well on its way to becoming a central player in the global car parts market. Schaeffler’s continued investments and the government’s commitment to EV production signal a promising future. As the automotive landscape shifts, Thailand’s auto industry is ready to lead the charge, blending tradition with innovation for a dynamic new era in vehicle manufacturing.

Ref-Thaiger

Business

Thailand Commits to Becoming an AI Learning Hub

Published

3 weeks ago

December 5, 2024

Wadi

Ministers Announce Plans for AI Governance Collaboration

Thailand is dedicated to advancing global trust in artificial intelligence (AI) governance and establishing itself as a learning hub for AI through collaboration with UNESCO, according to Prasert Jantararuangthong, the Minister of Digital Economy and Society (DES). This initiative aims to enhance the ethical application of AI technologies while fostering skilled professionals in the field.

Goals for AI Workforce Development

The Ministry of Higher Education, Science, Research and Innovation (MHESI) has set ambitious goals to increase the number of AI-skilled workers by adding 30,000 engineers over the next three years. This plan includes generating 100 AI innovations valued at 40 billion baht and promoting AI adoption across 600 agencies nationwide.

Significant Increase in AI Adoption Rates

According to the AI Readiness Measurement 2024 report by the Electronic Transactions Development Agency and the National Science and Technology Development Agency, AI adoption plans among Thai organizations have reached 73.3%, reflecting an increase of nearly 20 percentage points year-on-year. This surge indicates a growing recognition of the importance of AI in various sectors.

Hosting the UNESCO Global Forum on AI Ethics

On Wednesday, the DES Ministry, MHESI, the Education Ministry, and UNESCO announced their partnership to host the 3rd UNESCO Global Forum on the Ethics of AI 2025, themed “Ethical Governance of AI in Motion.” This event is scheduled to take place from June 24 to 27, 2025, in Bangkok and will serve as a platform for knowledge exchange and collaboration on AI governance.

Commitment to Ethical AI Implementation

Prasert emphasized that Thailand’s commitment aligns with UNESCO’s AI Readiness Assessment framework, which is recognized globally. The country has recently introduced key frameworks such as the AI Governance Guideline for Executives and the Generative AI Governance Guideline for Organizations. These resources aim to ensure responsible and transparent implementation of AI at all organizational levels.

Multilateral Collaboration for Developing Countries

The upcoming forum is expected to foster multilateral collaboration and build AI governance capacity in developing countries. It highlights Thailand’s dedication to global trust in AI governance while positioning itself as a leader in ethical AI practices.

Integration of AI Technologies Across Industries

Suphachai Jaismut, vice-minister for MHESI, stated that Thailand is prepared to integrate AI technologies across various industries, driven by a commitment to advancing research and development (R&D). This integration is crucial as Southeast Asia’s digital economy continues to grow rapidly.

Addressing Challenges in the Digital Economy

While advancements in AI infrastructure are promising, challenges such as the digital divide and job displacement due to automation remain significant concerns. Xing Qu, deputy director-general for UNESCO, emphasized that building peace through education, science, and culture is vital in an era where AI increasingly influences societies and economies.

Business

Thailand to Finalise Free Trade Agreement with EFTA by January 2024

Published

4 weeks ago

December 1, 2024

Ashley Wings

Thailand is preparing to finalise a landmark Free Trade Agreement (FTA) with the European Free Trade Association (EFTA) by January 2024. The agreement marks Thailand’s first FTA with a European trade bloc and is expected to bolster exports, attract investments, and enhance Thailand’s position in the global economy.

EFTA Partnership: A Milestone in Thailand’s Trade Strategy

Who Are EFTA Members?

The EFTA comprises Switzerland, Norway, Iceland, and Liechtenstein, offering Thailand access to lucrative European markets.

Commerce Minister Pichai Naripthaphan highlighted the FTA’s importance, describing it as a pivotal step for economic growth and trade expansion.

“This is Thailand’s inaugural FTA with a European bloc, setting a precedent for modern trade standards and sustainable development goals,” said Pichai.

Comprehensive Scope of the Agreement

What Does the FTA Cover?

The FTA includes 15 broad areas designed to modernise trade relations and foster sustainable development. Key areas include:

Trade in Goods
Rules of Origin
Investment Opportunities
Trade Facilitation
Intellectual Property Rights
Sustainability and SMEs Development

Future Expansion Opportunities

The FTA is seen as a stepping stone toward future trade agreements with other significant partners, including the European Union, advancing Thailand’s global trade ambitions.

Economic Impact of the Thailand-EFTA Trade Partnership

Surging Trade Figures

Between January and October 2023, trade between Thailand and the EFTA exceeded US$10 billion, accounting for 2.03% of Thailand’s global trade and reflecting a 23.22% year-on-year growth.

Key Thai Exports and Imports

Exports to EFTA: Jewellery, watches, canned seafood, machinery, cosmetics, and rice.
Imports from EFTA: Gems, gold, pharmaceuticals, scientific equipment, and fresh seafood.

The agreement is expected to further diversify and increase Thailand’s trade portfolio.

Next Steps: Approval and Implementation

High-Level Signing at WEF Davos

The FTA will be presented to the Thai Cabinet for approval before its official signing at the World Economic Forum (WEF) in Davos, Switzerland, in January 2024. Prime Minister Paetongtarn Shinawatra and Commerce Minister Pichai will attend the signing ceremony.

Ratification and Rollout

Following Parliamentary approval, the agreement will be ratified, paving the way for implementation and significant contributions to Thailand’s GDP growth.

A Strategic Vision for Thailand’s Future

The Thailand-EFTA Free Trade Agreement aligns with Prime Minister Paetongtarn Shinawatra’s vision of positioning Thailand as a global trade hub. By establishing this partnership, Thailand is set to achieve:

Increased export opportunities
Enhanced foreign investment
Strengthened trade ties with Europe

As the January deadline approaches, Thailand’s first European trade agreement symbolizes a bold step toward economic transformation, underscoring its commitment to modernisation, sustainability, and global collaboration.

Business

Thai Airways Secures 44 Billion Baht to Propel Post-Rehabilitation Future

Published

4 weeks ago

December 1, 2024

Ashley Wings

Thai Airways International (THAI) has secured approximately 44 billion baht through a share rights offering, marking a significant milestone in its recovery journey. The move is set to bring the national carrier closer to exiting its court-supervised debt restructuring process and resuming stock trading by mid-2025.

Thai Airways is offering 9.82 billion new shares to existing shareholders at 4.48 baht per share. This capital infusion represents the final phase of its restructuring, aimed at ensuring financial stability and market re-entry.

“This marks a critical step before the airline resumes operations as a publicly traded entity,” said a Cabinet source.

Government’s Role: Strategic Investment Without State Enterprise Status

Maintaining a National Flag Carrier

The Thai government has announced plans to increase its investment in Thai Airways while ensuring it does not revert to a state enterprise.

Current Stake: The Finance Ministry holds 47.9% of THAI shares.
Post-Restructuring: The ministry, the Vayupak Fund, and the Government Savings Bank will collectively own around 40% of the airline.

“This structure ensures Thai Airways remains a national flag carrier while avoiding direct state control,” confirmed Finance Minister Pichai Chunhavajira.

Debt Conversion and Shareholder Dynamics

Debt-to-Equity Swap Secures Creditor Support

Thai Airways’ creditors have agreed to convert approximately 53 billion baht of debt into equity as part of the rehabilitation plan. This move aligns with THAI’s efforts to stabilize its financial position.

The Council of State approved the recapitalization as a legitimate component of the restructuring process.
Despite debates over the Finance Ministry’s voting rights during the creditor meetings, officials clarified that the debt-to-equity swap remains incomplete, allowing the ministry to retain creditor status.

Path to Recovery

THAI is expected to exit rehabilitation by February 2025.
The airline plans to resume stock trading by May 2025, paving the way for a return to the public market.

Broader Implications for Thai Airways

Strengthened Financial Position

The successful share rights offering bolsters Thai Airways’ financial resilience, ensuring the airline’s ability to navigate post-rehabilitation challenges.

National Pride and Strategic Vision

The government’s balanced approach highlights its commitment to preserving Thai Airways’ status as a national carrier while encouraging operational independence.

Soaring Toward a Brighter Future

Thai Airways’ 44 billion baht share rights offering symbolizes its steady progress toward financial recovery and operational excellence. With strong government support and strategic restructuring, the airline is poised to regain its position as a leading player in the global aviation market by 2025. This pivotal moment underscores THAI’s resilience and its importance to Thailand’s economic and cultural identity.