Thailand'S Automotive Industry - Boi

THAILAND’SAUTOMOTIVEINDUSTRYTHE NEXT-GENERATIONThailand Board of Investmentwww.boi.go.th

INDUSTRY OVERVIEWThe world is embracing to cleaner andsmarter society while people’s mean oftransportation like automobile also takesa step further to the next generation withmore fuel-efficient and environmentallyfriendly. In 2016, 94 million automobileswere produced worldwide, the highestnumber in the history. Yet, those vehiclesare embracing the new breakthroughtechnology. Ranging from hybrid tobattery electric vehicle, the world aimsto have EV at 40% market share of allautomobile in 20401.Thailand automotive industry has beensignificantly developed for over 50years. The industry contributed 12%of the GDP1 with more than 1.94 millionvehicles produced and worth USD 27billion in 2016. These successes rankedthe country as the largest automotiveproducer in Southeast Asia and 12th in theworld. As an “Automotive Hub of Asia”,World’s Automobile Production 2016230 28.122520Thailand continuously accelerates itsnext-generation automotive industry tofollow the S-Curve promotion with highervalue-added production and also strivesfor alignment of automotive industrialpolicy to align with environmentalprotection policy.World’s Production: 94.10 Million ( 4.62%)*15Thailand: 1.94 Million ( 1.80%)*12.20Thailand Automotive Industry Ranking2CarsCzech Rep.TurkeyUKThailand1.49 1.35France2.37 2.16 2.08 1.94 1.82BrazilSpain3.60 2.89MexicoSouth Korea4.49 s (Million)THAILANDAUTOMOTIVE INDUSTRYCommercial Vehicles**Source:Bloomberg and International Energy Agency (IEA)2Organization of Motor Vehicle Manufacturers (OICA)Note:* Year-to-year growth rate (2015-2016)** Commercial vehicles’ definition by OICA includelight commercial vehicles, heavy trucks,coaches and buses.11stAutomotive Producerin Southeast Asia in 20162ndOne-Ton Pickup Producerin the world in 20166thCommercial Vehicle Producerin the world In 201612thAutomotive Producerin the world in 2016Source:Ministry of Commerce2OICA as of March 20171

AUTOMOTIVEASSEMBLERSMotor VehicleSince Toyota and Nissan establishedtheir first production plant in 1962,Thailand automotive industry hasbeen continuously developed andbecome well established over decades.Nearly every Japanese car makersand many leading US, Europe, andChina automotive companies havetheir production plants in ThailandAssemblers(18 car and9 motorcycle companies)Foreignmajority58%[Million Units]1.93.520162020and many of which set their regionalheadquarters in the country. Theseauto assemblers also attracted morethan 710 auto part makers and 1,700supporting companies to the country2.These auto part suppliers are all themost important contributors who helpshape the industry’s structure with itscompleted supply chain till these days.AutoAssemblersJV3%Thaimajority39%Tier 2 & 3 Suppliers(1,700 companies)Source:1,2Thai Automotive Industry Association andThailand Automotive InstituteTier 1 Suppliers(710 auto part companies)The production numbers keep growingremarkably since 2009 which 9.93%increase annually. In 2016, Thailand haddoubled its car production comparedto 2009.Thailand Car Production 2009-2016139.93%*21.651.512.452.452.5Units (Million)Vehicles ProducedThailand expects to increase itsproduction to 3,500,000 motor vehicleunits in 2020 or 80% increase from20161.Thailand produced 1,944,417 motorvehicle units in 2016. More than half ofthe total production is one-ton pickupwhich shared 57% along with 41% forpassenger car and 2% for commercial 1Passenger Car20122013One-Ton PickupThailand exported 1,188,515 automobilesin 2016 which made more than USD 18billion to the country while export valueincreased at the faster pace than exportvolume since 2009, 14.08 Vehicle** PPV: Pick-Up Passenger VehicleMinistry of IndustryAdminister and manage the country’spolicies and promote and support industryand investment as well as entrepreneur.Thailand AutomotiveInstituteSupport and coordinate with private andgovernment sectors as well as providenecessary services for the automotiveindustry.The Thai AutomotiveIndustry AssociationPromote the automotive industry includingincreases competitiveness of automotivemanufacturer and assembler.Electric VehicleAssociation of ThailandSupport knowledge exchange andtechnology on EV as well as consult onrelated regulation, standardization andresearch.Note:* TAI - Thailand Automotive Institute,TAIA - The Thai Automotive Industry Association,EVAT - Electric Vehicle Association of Thailand,TAPMA - Thai Autoparts Manufacturers Association

INVESTMENT INCENTIVESBOI IncentivesBOI recognizes the importance and value of the automotive industry, and offersa wide range of tax and non-tax incentives for projects that meet nationaldevelopment objectives.Tax IncentivesINCENTIVESGROUPELIGIBLE ACTIVITIESCorporateincome taxexemptionExemptionof importduty*A1Research and development in automotiveindustry and automotive training centers8 years(no cap) A2 Manufacture of Vehicle Parts Using HighTechnology Manufacture of Automobile Parts for SafetyParts and Energy-saving Parts Manufacture of Parts for Hybrid, ElectricVehicle (EV) and Plug-in Hybrid ElectricVehicles (PHEV) Automobile Manufacture of Rubber Tires for Vehicles Manufacture of Fuel Cells8 yearsA3 Manufacture of Fuel System Parts Manufacture of Transmission System Parts Manufacture of Turbocharger Manufacture of Motorcycles (except lessthan 248 cc engine displacement)5 yearsGROUPELIGIBLE ACTIVITIESCorporateincome taxexemptionExemptionof importduty*A4 Assembling of Engine Manufacturing of Fuel Pipe/ Tube Manufacture of Engine System Parts (ExceptTurbocharger Manufacture of Steering System Parts Manufacture of Cooling System Parts Manufacture of Exhaust System Parts Manufacture of Air Conditioning System Parts Manufacture of Ultimate Tensile Strength Steel Manufacture of Ball Bearing for Vehicles3 years B1 Manufacture of General Automobile Manufacture of Other Vehicle Parts Manufacture of Motorcycles (except lessthan 248 cc engine displacement)**- Manufacture of Automobile Engines-- Project must have pressing of parts, not less than 4 outof 5 parts, as follows: Cylinder Head, Cylinder Block,Crankshaft, Camshaft and Connecting RodINCENTIVES Non-Tax IncentivesThese activities also receive the following non-tax incentives:Permit to bring inexpatriatesPermit to own landNo restriction onforeign currencyNote:* Exemption of import duty on machinery and raw oressential materials used in manufacturingexport productsNote:* Exemption of import duty on machinery and raw oressential materials used in manufacturing export products** Project must have structural welding and spray painting process.Plans must be approved by BOI

CONTACT USHEAD OFFICESOFFICE OF THE BOARD OF INVESTMENT555 Vibhavadi-Rangsit Road, Chatuchak, Bangkok 10900Tel: 66 (0) 2553-8111Fax: 66 (0) 2553-8315Website: www.boi.go.thEmail: head@boi.go.thONE START ONE STOP INVESTMENT CENTER (OSOS)18th Floor, Chamchuri Square Building,319 Phayathai Road, Pathumwan, Bangkok 10330Tel: 66 (0) 2209-1100Fax: 66 (0) 2209-1199Website: osos.boi.go.thEmail: osos@boi.go.thONE STOP SERVICE CENTER FOR VISAS ANDWORK PERMITS18th Floor, Chamchuri Square Building,319 Phayathai Road, Pathumwan, Bangkok 10330Tel: 66 (0) 2209-1100Fax: 66 (0) 2209-1194Email: visawork@boi.go.thREGIONAL OFFICESREGIONAL INVESTMENT AND ECONOMIC CENTER 1CHIANG MAI OFFICEAirport Business Park 108-110,90 Mahidol Road, Amphur Muang, Chiang Mai 50100Tel: 66 (0) 5329 4100Fax: 66 (0) 5329 4199Email: chmai@boi.go.thREGIONAL INVESTMENT AND ECONOMIC CENTER 5SONGKHLA7-15 Chaiyong Building Juti Uthit 1 Road, Hadd Yai,Songkhla 90110Tel: 66 (0) 7458 4500Fax: 66 (0) 7458 4599Email: songkhla@boi.go.thREGIONAL INVESTMENT AND ECONOMIC CENTER 2NAKHON RATCHASIMA2112/22 Mitraphab Road, Amphur Muang,Nakhon Ratchasima 30000Tel: 66 (0) 4438 4200Fax: 66 (0) 4438 4299Email: korat@boi.go.thREGIONAL INVESTMENT AND ECONOMIC CENTER 6SURAT THANI49/21-22 Sriwichai Road, Makhamtia, Amphur Muang,Surat Thani 84000Tel: 66 (0) 7740 4600Fax: 66 (0) 7740 4699Email: surat@boi.go.thREGIONAL INVESTMENT AND ECONOMIC CENTER 3KHONKAEN177/54 Moo 17, Mitraphab Road, Amphur Muang,Khonkaen 40000Tel: 66 (0) 4327 1300-2Fax: 66 (0) 4327 1303Email: khonkaen@boi.go.thREGIONAL INVESTMENT AND ECONOMIC CENTER 7PHITSANULOK OFFICE3rd Floor, Thai Sivarat Building, 59/15 Boromtrilokkanat 2 Road,Naimuang, Amphur Muang, Phitsanulok 65000Tel: 66 (0) 5524-8111Fax: 66 (0) 5524-8777Email: phitsanulok@boi.go.thREGIONAL INVESTMENT AND ECONOMIC CENTER 4CHONBURI46 Moo 5 Laem Chabang Industrial Estate, Sukhumvit Road,Toongsukhla, Sriracha, Chonburi 20230Tel: 66 (0) 3840 4900Fax: 66 (0) 3840 4997, 66 (0) 3840 4999Email: chonburi@boi.go.thOVERSEAS OFFICESSHANGHAIThailand Board of Investment, Shanghai OfficeRoyal Thai Consulate General, No. 18, Wanshan Road,Changning Distric, Shanghai 200336, P.R. ChinaTel: 86-21-5260-9876, 86-21-5260-9877Fax: 86-21-5260-9873Email: shanghai@boi.go.thMUMBAIThailand Board of Investment, Mumbai OfficeExpress Tower, 12th Fl., Barrister Rajni Patel Marg,Nariman Point, Mumbai, Maharashtra 400021Tel: 91-22-2204-1589-90Fax: 91-22-2282-1525Email: mumbai@boi.go.thBEIJINGThailand Board of Investment, Beijing OfficeRoyal Thai Embassy, No.21 Guanghua Road,Chaoyang District, Beijing, 100600, P.R. ChinaTel: 86-10-8531-8755 to 8757, 86-10-8531-8753Fax: 86-10-8531-8758Email: beijing@boi.go.thNEW YORKThailand Board of Investment, New York Office7 World Trade Center, 34th Floor, Suite F,250 Greenwich Street, New York, New York 10007, U.S.A.Tel: 1 (0) 212 422 9009Fax: 1 (0) 212 422 9119Email: nyc@boi.go.thWebsite: www.thinkasiainvestthailand.comGUANGZHOUThailand Board of Investment, Guangzhou OfficeInvestment Promotion Section, Royal Thai Consulate-General,No.36 Youhe Road, Haizhu District, Guangzhou, P.R. China 510310Tel: 86-20-8385-8988 Ext. 220-225, 86-20-8387-7770 (Direct line)Fax: 86-20-8387-2700Email: guangzhou@boi.go.thTAIPEIThailand Board of Investment, Taipei OfficeTaipei World Trade Center, 3rd Floor, Room 3E40No.5 Xin-Yi Road, Sec. 5 Taipei 110, Taiwan R.O.C.Tel: 886-2-2345-6663Fax: 886-2-2345-9223Email: taipei@boi.go.thTOKYOThailand Board of Investment, Tokyo OfficeRoyal Thai Embassy, 8th Floor, Fukuda Building West,2-11-3, Akasaka, Minato-ku, Tokyo 107-0052 JapanTel: 81 (0) 3-3582-1806Fax: 81 (0) 3-3589-5176Email: tyo@boi.go.thOSAKAThailand Board of Investment, Osaka OfficeRoyal Thai Consulate-General, Bangkok Bank Building, 7th Floor,1-9-16 Kyutaro-Machi, Chuo-Ku, Osaka 541-0056 JapanTel: 81 (0) 6-6271-1395Fax: 81 (0) 6-6271-1394Email: osaka@boi.go.thSEOULThailand Board of Investment, Seoul Office#1804, 18th Floor, Koryo Daeyeongak Center,97 Toegye-ro, Jung-gu, Seoul, 100-706, KoreaTel: 82-2-319-9998Fax: 82-2-319-9997Email: seoul@boi.go.thThailand Board of Investmentwww.boi.go.thLOS ANGELESThailand Board of Investment, Los Angeles OfficeRoyal Thai Consulate-General, 611 North Larchmont Boulevard,3rd Floor, Los Angeles CA 90004, U.S.A.Tel: 1 (0)-323-960-1199Fax: 1 (0)-323-960-1190Email: boila@boi.go.thFRANKFURTThailand Board of Investment, Frankfurt OfficeInvestment Section, Royal Thai Consulate-GeneralBethmannstr. 58,5.0G60311 Frankfurt am Main,Federal Republic of GermanyTel: 49 (069) 92 91 230Fax: 49 (069) 92 91 2320Email: fra@boi.go.thPARISThailand Board of Investment, Paris OfficeAmbassade Royale de Thaïlande8, rue Greuze, 75116 Paris, FranceTel: (33-1) 56 90 26 00Fax: (33-1) 56 90 26 02Email: par@boi.go.thSTOCKHOLMThailand Board of Investment, Stockholm OfficeStureplan 4C 4th Floor, 114 35 Stockholm, SwedenTel: 46 (0) 8463 1158, 46 (0) 8463 1174-75Fax: 46 (0) 8463 1160Email: stockholm@boi.go.thSYDNEYThailand Board of Investment, Sydney OfficeSuite 101, Level 1, 234 George Street, Sydney,New South Wales 2000, AustraliaTel: 61-2-9252-4884Tel: 61-2-9252-4882Email: sydney@boi.go.thThink Asia, Invest Thailand

2of Thailand's automotive industry. Thai Auto Parts Industry Association Note: * Compound Annual Growth Rate (2009-2016) Exchange rate (BOT, March 1, 2017): USD 1 THB 34.99 Auto Parts Thailand's auto parts industry has always been a strong supporting factor contributing to the fast growing More than 60% of 100 largest auto