The automotive sector is relieved after the cabinet last week gave the go-ahead for the building of an auto testing centre at Chachoengsao's Sanam Chai Khet district.
Thavorn Chalassathien, vice-chairman of the Federation of Thai Industries (FTI), said the approval ended speculation about a possible delay to 4.5-billion-baht the auto testing centre.
"The cabinet's approval is like a light at the end of the tunnel for the country's automotive industry, as Thailand cannot afford to delay the project's development," said Mr Thavorn, who is in charge of the automotive cluster development and has pushed for the testing centre for 13 years.
Thavorn: Can't afford delay on project
The auto centre was first approved by the cabinet on June 16 last year to be situated on a 1,200-rai plot owned by the Natural Resources and Environment Ministry in Chachoengsao's Sanam Chai Khet district.
Industry concerns emerged a couple of weeks ago after Prime Minister Prayut Chan-o-cha rejected in early March a proposal by the Industry Ministry to make sweeping changes to the planned testing centre.
The ministry proposed turning the public-private partnership (PPP) project into a state-funded project, saying it had failed to attract any potential investors, even though 111 million baht had already been spent.
A key reason for the lack of private funding was that land title deeds could not be issued for the project's current location because the plot overlapped with a forest.
Gen Prayut rejected the proposal because the changes would be likely to lead to significant delays to the project.
Of the 111 million baht that has already been spent, 19 million baht was used to grow trees to replace ones cut down to make way for the centre. Another 6 million baht went towards designing the car testing centre. The 3.9-billion-baht PPP investment project is part of a 4.5-billion-baht investment plan.
Mr Thavorn said the new testing centre would be promoted not only as a national and regional hub but also as a venue for automotive innovation and technology to create added value to the country and local workers.
Chachoengsao is now the prime location for the auto industry as it is close to related industries in Ayutthaya, Samut Prakan, Prachin Buri, Chon Buri and Rayong, including the pier for vehicle exports at Laem Chabang Port.
Mr Thavorn said the testing centre would function as Thailand's "auto-technopolis" to support eight motorcycle makers, 17 car makers and 2,400 auto parts companies in the country.
At present, the country's automotive industry employs some 550,000 workers.
He said the auto-technopolis had to be on par with the Automotive Research & Testing Centre (ARTC) in Taiwan, founded in 1990 by the Taiwanese Ministry of Economic Affairs together with the Ministry of Transportation and Communication, the Environmental Protection Administration and representatives of the enterprises.
The ARTC is committed to the research and development of related technology, improving product quality and providing internationally recognised testing and certification services, as well as assisting the government in stipulating and managing regulations and standards.
"Thailand shouldn't just focus on maximising vehicle output or massive export volumes," said Mr Thavorn. "High technology and R&D should also be taken into account."
The FTI's automotive cluster has set a new milestone for 2020: once the new testing centre is completed and operational, the automotive industry will see its GDP contribution increase from 10% to 12%.
Productivity is expected to be 4.5 cars per worker per year from three cars now. The export value of cars, motorcycles and auto parts will increase from the current 1.2 trillion baht to more than 2 trillion in the next five years.
Mr Thavorn said the government should also promote the local manufacturing of buses and trucks as the third product champion, after pickup trucks and eco-cars, while auto parts makers should be efficient enough to support them.
At present, there are seven bus and truck makers who operate local assembly plants and import semi knock-down kits to be made here.
"Buses and trucks are a high priority to be promoted by the government to boost annual capacity from 30,000 units now to 100,000, which can attract more investment for local production in the future," he said.