| Author | Yardtip Boonyatharokul |
| Call Number | AIT RSPR no.SM-00-28 |
| Subject(s) | Automobile supplies industry--Thailand
|
| Note | A research study submitted in partial fulfillment of the requirements for the degree of Master
of Business Administration, School of Management |
| Publisher | Asian Institute of Technology |
| Series Statement | Research studies project report ; no.SM-00-28 |
| Abstract | In Thailand's national master plan for industrial development, the automotive parts
manufacturing industry is listed among the supp01t industries that play an important role in the
economic development of country. The reason behind is that the industry not only links
direct ly to the automotive assembly industry, but also various basic industries of which
automotive parts manufacturers are major customers. For more than twenty years, Thailand's
automotive parts industry has been supported and promoted by the government especially
through the local-content requirement schemes which requires that the local automobile
assemblers of passenger cars have to employ not less than 54% of local contents. This scheme
also applied to other kinds of vehicle: 61 % for pick-up, 70% for small truck using diesel
engine and 45% for large truck. However, since January 1, 2000, this requirement has been
abandoned in order to conform to the World Trade Organization-WTO's regulations. The
discontinuation of local-content requirements will have direct impact on the local automotive
parts producers, especially those which operates inefficiently and cannot compete in the more
competitive market.
The objective of the study is, therefore, to examine the situation of automotive parts industry
in Thail and, to determine weaknesses and problems of automotive parts manufacturers and to
find out the impact of the abolition of local-content requirement on the industry.
From the study, it was found that with the government protection the automotive parts
industry in Thailand was established and has been growing for more than twenty years
However, the competitiveness of the industry is still at the lower level compared with those of
developed countries even though it is higher than those of neighboring countries. The major
problems and weaknesses of Thai manufacturers are the lack of technological capability.
ineftlcient production, raw material problems and management problem. The economic crisis
during the past few years also worsened the situation of the industry. The shrinking
automobi les market directly affected and decreased the demand for auto parts. Most
manufacturers faced liquidity problem and many had to go out of the business. For those who
survive, they wi ll also face the higher competition situation after the abolition of local-content
requirement. The impacts on OEM producers wi ll be greater than REM because automobi le
assemblers now can buy parts and components from the world supply. When considering the
impact on industry by product group, manufacturers producing parts using high technology
wi ll receive the greater impact than those who are labor intensive manufacturers and use lower
level of technology.
In order to survive and be able to compete in the world market, Thai producers have to
improve their qua lit y, reduce production cost and better their service and delivery. Strategies
for them also include seeking for partners to get financial and technological assistance.
extending their export market and developing their human resource especially in design &
development and engineering capabil ity. Finally, the government also has an important role in
adjusting the tariff structure and improving the industrial structure to create the environment
and enhance the competiti veness of Thai 's auto parts industry. |
| Year | 2000 |
| Corresponding Series Added Entry | Asian Institute of Technology. Research studies project report ; no.SM-00-28 |
| Type | Research Study Project Report (RSPR) |
| School | School of Management |
| Department | Other Field of Studies (No Department) |
| Academic Program/FoS | Master of Business Administration (MBA) (Publication code=SM) |
| Chairperson(s) | Tang, John C.S.; |
| Examination Committee(s) | Bechter, Clemens;Sunanta Siengthai; |
| Scholarship Donor(s) | Asian Institute of Technology; |
| Degree | Research Studies Project Report (M.B.A.) - Asian Institute of Technology, 2000 |