Thailand will carry on as the regional manufacturing hub over the next five years, driven by positive factors such as the second phase of the eco-car scheme, according to research firm Frost & Sullivan.
"There will be five key themes that will define Thailand's automotive sector over the next five years," said Vivek Vaidya, a vice-president in the automotive and transport practice at Frost & Sullivan.
"The eco-car phase two programme will stimulate the automotive sector in Thailand and establish the Kingdom's credentials as the preferred manufacturing hub in Asean."
He said the new eco-car scheme was likely to raise Thailand's car production by an additional 1.58 million vehicles a year from 2.85 million now, with foreign direct investment reaching 139 billion baht.
"Car makers who won Board of Investment privileges will kick off their investment within five years, and Frost & Sullivan forecasts about 70% of eco-car production will be for export and the rest for the local market," Mr Vaidya said.
The next generation of free-trade agreements should further lower barriers and help better integrate the region with global supply chains.
Mr Vaidya said the Asean Economic Community, which is expected to take effect by the end of 2015, would allow greater access to Asean markets and freer movement of labour in the region.
Indonesia, Asean's biggest market, will compete with Thailand for automotive investment, he said.
Asean vehicle production in 2014 fell by 6% to 4.17 million units. Thailand accounted for 47% of regional production, down from 55% in 2013, while Indonesia's share rose from 27% to 34%.
Frost & Sullivan forecasts overall vehicle sales in Thailand of 950,000 units this year, up 9.8%.
Mr Vaidya said the country could expect average GDP growth of 5% over the next five years.
"Growth will be led by domestic demand, especially in infrastructure investment and private consumption," he said.