Local auto parts manufacturers are being urged to adapt to the technological disruption caused by electric vehicles (EVs) and transition to the production of medical devices, which are expected to have a promising business future, says the Federation of Thai Industries (FTI).
Auto parts makers familiar with internal combustion engines are struggling to adapt to electric mobility technology, as many of their products are no longer required by EV makers, said the federation.
"We will discuss this shift with the government and hope to create new product champions in the medical field," said Isares Rattanadilok Na Phuket, vice-chairman of the FTI. "This can become another effort to stimulate the economy."
A cluster under FTI Mobility-ONE, which is a new unit under the federation, believes auto parts producers can transition to manufacturing medical products, including some single-use devices such as test kits to diagnose illnesses, and durable items such as wheelchairs and hospital beds.
Known as CFM-ONE, this cluster was established last year to support the development of Thailand's automotive industry and help car and auto parts companies cope with challenges in their businesses.
Up to 1,700 auto parts makers are members of the FTI. Most of them are small or medium-sized original equipment manufacturers, categorised as tier 2 and tier 3 in the auto parts supply chain.
Auto parts producers in tier 1 are usually subsidiaries of global car companies.
Manufacturers in the second and third tiers, skilled in plastic stamping and tasks involving rubber and electronics-related manufacturing processes, have the potential to pivot their operations towards the production of medical devices.
According to Krungsri Research, Thai medical device manufacturers should enjoy solid rates of growth from 2023 to 2025, with the value of goods distributed domestically and internationally forecast to expand by an annual average of 5.5-7.0% and 6.5-7.5%, respectively.
Markets will be lifted by a number of factors, including the aged society and the accompanying rise in rates of illnesses, the threat of newly emerging diseases, rising interest in preventive healthcare in the post-pandemic era, and growth in demand for medical tourism.
Wellness and medical tourism is among the government's 12 targeted S-curve industries. This sector has high potential to grow because, according to Krungsri Research, Thailand is recognised globally for its high quality of care and low costs.
CFM-ONE said earlier that it would cooperate with global car manufacturers to assist local auto parts makers who want to continue businesses in the automotive industry in shifting to producing parts for EVs.