Technological Upgrading and Challenges in the Thai Automotive Industry

Over the last sixty years, Thailand has become the "Automotive Hub of Asia", shifting from import substitution to export orientation, including an increasingly significant role in the automobile global value chain (GVC). Key contributory factors towards this shift include: (i) government incentives targeted at technologically sophisticated activities; (ii) collaborations among universities, research institutes and industry in sector-specific teaching and research programmes; and (iii) a shift in a sector-specific government promotion agency towards "intermediary" activities that facilitate collaborations among stakeholders. Local firms, through indigenous strategies and efforts, have fostered position upgrading in the GVC. The industry has upgraded from a production base to a more innovation and R&D-intensive one, while becoming more product-specific. Outstanding challenges lie in the adoption of new technologies. While robotization in production has been implemented extensively, the push for production of electric vehicles (EVs) has yet to succeed.