Thailand Auto Part Manufacturing Industry Development Strategy Toward ASEAN’S Auto Part Production Hub
Abstract
Over five decades has the support of the automotive industry from Thai government been so strong, resulting in the economy’s main branch in propelling the economy, job creation, technology- passing on and continuous development in the industrial aspect, including both forward and backward connection. The evolution in the context of competition and beneficial technology from the arising of free trade and investment has occurred, although new entrepreneurs aside from the Japan party which has been governing the market in the first place had entered this industry in Thailand but did not liberate the competition much. Whether the assembling of the economy in the regional level in order to liberate trade and investment will contribute more benefit to supportive industries such as Thailand’s automotive component industry and develop to a hub in regional production or not, are the main issues that still lack systematic research. Qualitative research that requires secondary data from researches, governmental sources and related associations, and primary data from main informants in government service, automotive component industry and agents of the automotive party, visualizes the development in managing changeable industries and components alongside with the initiation of the new production base from Thailand to other countries simultaneously.
Automotive component industry still remains as the heart of the “automotive supply chain” that has low prices, timely deliveries and being near automobile assembling factories which Thailand’s active automotive component producers are able to respond properly. Nevertheless, automotive component investment has transformed from the past joint venture of automobile assemblers and local Thai capital to an increasing in direct investment by the automobile assemblers. This might lead to a halt in passing on future technology to local entrepreneurs. Benefits following Thai capital apart from the decrease in direct way, being the important automotive component production base of ASEAN and collecting taxation for the country might lessen the proportion. Local capital entrepreneurs of Thailand will be reduced because of the future automotive component production which uses a higher level of technology and a high amount of investment. Producing component pieces of the Multinational Corporation, both in Thailand and the expansion of automobile assembling base, will diminish Thai capital probability of having a role in the regional level unless there are policies from the government that favors participation in protecting the benefits that do not affect the overall image of foreign capital.
