Minister nudges industry towards sustainability for exports

Minister nudges industry towards sustainability for exports

Vehicles await shipment at Laem Chabang port in Chon Buri. Thai vehicle exports totalled US$25.1 billion last year, up 13%. (Photo: Patipat Janthong)
Vehicles await shipment at Laem Chabang port in Chon Buri. Thai vehicle exports totalled US$25.1 billion last year, up 13%. (Photo: Patipat Janthong)

The Thai automotive industry is being urged to speed up the transition to new global regulations, which emphasise sustainability and clean energy, while leveraging free trade agreements (FTAs) to hone their competitive edge.

Speaking following discussions on Wednesday with executives from the Thai Automotive Industry Association (TAIA) and the Automotive Industry Club of the Federation of Thai Industries (FTI), Commerce Minister Phumtham Wechayachai said as new global trade regulations come into effect that emphasise sustainability, clean energy and rules of origin, the government wants all parties to keep pace with developments, adapt to changing mechanisms, and create a new balance.

The ministry pledges to continue coordinating with the Agriculture and Cooperatives Ministry, Customs Department and relevant authorities in Australia to address the automotive industry's concerns, especially regarding illegal grasses and dust contamination found in cars exported to Australia.

Mr Phumtham said the problems were partially the result of geographical conditions in Laem Chabang.

"The government is committed to promoting and addressing export challenges for the automotive sector, which generates the third-highest amount of revenue among Thai industries, making it a global hub for the production and export of automobiles," he said.

"The government wants to quickly resolve obstacles for the industry. The prime minister pushed for fast amendment of laws and more trade partnerships, while advising exporters to best use FTA benefits to create trade opportunities and explore new markets."

Suwat Supakandechakul, president of the TAIA, said the group wants Commerce Ministry promotion of the automotive industry through FTA negotiations.

As the industry transitions towards future vehicles, particularly electric vehicles (EVs), negotiations may need to cover the context of the shift to EVs in terms of production and exports, he said.

"Thailand is the 10th-largest automotive producer globally, but lacks its own brand, making export competition difficult. FTA negotiations should be adjusted to align with Thai industry, such as details regarding the origin of products," said Mr Suwat.

"The automotive industry should be allowed to participate in determining the conditions for FTAs to ensure suitability as the industry generates massive export income for the country."

In recent years, Thailand's automotive industry has significantly benefited from preferential tax rates, especially in major export markets such as Asean and Australia, he said.

Thailand's automobile production amounted to 1.9 million units in 2023, with exports reaching 1.15 million units, while 750,000 units were sold domestically.

Some 70% of exported vehicles were pickups.

The production target for 2024 was downgraded, though the FTI kept the export volume on par with last year.

According to data from the International Trade Promotion Department, the export value for vehicles in 2023 tallied US$25.1 billion (866 billion baht), a 13% increase. Australia remains a significant export market, noted the department.

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