The government said it expects to garner at least US$15 billion (546 billion baht) in foreign direct investment in the next three years as Prime Minister Srettha Thavisin's trips around the world to woo electric vehicle (EV) makers and technology companies start to yield results.
As much as 210 billion baht ($5.7 billion) is expected into Thailand's automotive industry as Chinese EV makers rush to set up supply chain in Southeast Asia’s second-largest economy, according to Narit Therdsteerasukdi, secretary-general of the Board of Investment (BOI). Tech companies are likely to invest another 250 billion baht in data centres and cloud services, and Thailand also expects investments in the semiconductor supply chain for the first time, he said.
Mr Srettha, also the finance minister, has travelled to 14 countries since taking office in September and met with top executives from more than 60 companies, pitching for foreign investments across high-value sectors to lift Thailand’s growth rate from an average of less than 2% in the last decade.
Mr Srettha has also drawn criticism at home for his jet-setting approach, which he called "proactive economic diplomacy," to tell the world Thailand was open again for business after a decade of military-backed rule. While some of his key promises, including a 500-billion-baht cash handout scheme for 50 million Thais, have yet to materialise, his administration is betting on the passage of an election-delayed budget to shore up growth.
"The government’s proactive roadshows have put Thailand in the global spotlight and increased investor confidence, as well as created opportunities for Thai businesses to raise competitiveness and become parts of global supply chains," Mr Narit told reporters. "The investment prospects will only increase from now."
The BOI received applications worth 850 billion baht in 2023, the highest in nine years, with foreign direct investment applications growing 72% from a year earlier, according to Mr Narit. Applications this year should total no less than 800 billion baht, he added.
Chinese EVs
Demand for EVs is booming in Thailand with the government unveiling tax breaks and other incentives to attract investments and protect the country's long-time standing as a regional auto hub. Since 2022, the government has approved about 84 billion baht in incentives, including reductions in import and excise taxes and subsidies to buyers in exchange for automakers' commitment to invest in local factories.
That effort has started to pay off, with pledges coming largely from Chinese EV makers. Earlier this year, Great Wall Motor Co became the first automaker to produce an electric car locally. This month, Hozon New Energy Automobile Co started making the Neta V-II model locally for deliveries in April.
More Chinese EV makers are expected to follow suit, with BYD Co and GAC Aion New Energy Automobile Co slated to start local manufacturing later this year. Brands such as Xiaopeng and Zhejiang Geely Holding Group Co's Zeekr have also debuted in Thai market.
New EV sales in Thailand are expected to top 150,000 units this year, more than double from 2023, according to the Electric Vehicle Association of Thailand. The slew of launches during the annual Bangkok International Motor Show this week was a testimony to consumers' growing appetite for battery-powered vehicles, Krisda Utamote, president of the association said.