Prime Minister Srettha Thavisin has expressed confidence that other auto manufacturers will not withdraw their production bases from Thailand, following the decision of Suzuki Motor Corporation to do so.
Suzuki said on Friday that it would close its 12-year-old plant in Rayong at the end of 2025, affecting 800 workers, as it wanted to focus on producing electric vehicles elsewhere.
Mr Srettha said on Saturday that the government still attached importance to the production of Japanese combustion engine vehicles. Meetings were held with major manufacturers, including Toyota, Honda, Isuzu, Mazda and Mitsubishi, to discuss the measures they need from the government, he said.
On Dec 17 last year, he also attended the Asean-Japan 50th anniversary meeting with executives of automotive industries operating in Thailand. The discussions reinforced their confidence to increase their investment in Thailand, he said.
“We respect the decision of Suzuki as its market share was relatively small and its car production may not fit with the demand in Thailand,” the premier said.
“Despite that, Suzuki continues to manufacture motorcycles and maintain service centres for parts and maintenance in Thailand.”
In a related development, the head of the Chachoengsao Labour Protection and Welfare Office expressed concern about the worsening labour situation in the province, with a significant number of vulnerable workers at risk of future layoffs.
In the automotive industry, which employs 39,321 workers in 137 workplaces, the growing electric vehicle (EV) market had led to decline and stagnation in the combustion engine vehicle industry, said Suwanna Khantivisit.
Isares Rattanadilok na Phuket, deputy chair of the Federation of Thai Industries, said low economic growth had forced the industry to mitigate risks.
Government policies, such as the minimum wage increase and the promotion of EV imports, have harmed the sector’s competitiveness.
The government, meanwhile, has failed to consistently provide support for domestic industries, leading to financial strain from rising interest rates, high fuel and electricity costs and recent minimum wage adjustments, he said.
In the first half of this year, said Mr Isares, 360 factories were shut down, with investment loss estimated at 9.4 billion baht.
This resulted in the termination of more than 10,000 workers, higher than the average of the past two years.
The number of factory closures may reach 700 if the 400-baht minimum wage goes into effect nationwide as some employers fear, as it could render some plants uncompetitive, Mr Isares said.