Why this is important to Wisconsin businesses: Wisconsin is home to diverse companies that supply raw materials as well as components for the industry.
Thailand is becoming a force for the automotive industry in its region, and Vietnam is following suit.
Launched in the 1960s with an assembly plant for Japanese automaker Toyota, Thailand’s automotive industry now encompasses 1,800 companies and more than 500,000 workers. The industry produces cars, motorcycles, trucks, buses, tractors, agricultural machinery, and construction equipment as well as auto parts, tires, and accessories.
Thailand has the largest automotive industry in Southeast Asia and the tenth-largest worldwide, according to the Thailand Board of Investment. Japanese car companies have established a production base in Thailand for pickup trucks and green vehicles for export, while U.S. and European automakers make big luxury cars there.
The country is expected to become a hub for electric vehicle (EV) production as well. Germany’s Mercedes-Benz chose Thailand as the first location in the region to build its fully-electric Mercedes-EQS model, and BYD Co., China’s largest electric carmaker, has committed to spending $660 million, the Board of Investment said. In addition, Toyota has announced a partnership with Bangkok-based CP Group to turn agricultural biomass into fuel for hydrogen-powered vehicles.
Companies with EV components and production facilities in Thailand include Daimler, Toyota, Nissan, Honda, BMW, Mercedes, and SAIC. By 2030, the government estimates that 30% of all autos manufactured in Thailand will be electric.
To reach that goal, Thailand is offering several incentive plans for investors in the EV supply chain, such as 13 years of corporate income tax exemption and additional tax holidays for long-term investors.
On Thailand’s highways, the number of electric vehicles in use is expected to reach 1.2 million by 2030, and drivers will be able to fill up at 10,000 charging stations across the country by 2025.
Meanwhile, Vietnam is also emerging as an automotive manufacturing hub in Southeast Asia, with local company VinFast starting its car production, launching 12 models including a mini electric car. In March 2023, the company delivered its first 45 cars to customers in California. VinFast plans to increase its annual production to 500,000 units by 2025.
Although Vietnam’s rate of car ownership per capita is still much lower than other markets in Asia, predictions are that with the country’s growing purchasing power, nearly 10% of Vietnamese households will own a car by 2025 and as many as 30% by 2030.
With the shift to EV, growing purchasing power, and focus on efficiency, Thailand and Vietnam offer opportunities to Wisconsin automotive companies—in particular, for supplying advanced automotive parts and accessories as well as technology and equipment for factory automation. A WEDC report in March cited “a tremendous opportunity for Wisconsin to develop a globally competitive cluster centered on the manufacturing of EVs and EV-related equipment.”