A significant decline in the shares of Thai auto parts companies was observed today, following rumours that Japanese automaker Isuzu Motors intended to move its Thai factory to Indonesia. The Indonesian Industry Minister, Agus Gumiwang Kartasasmita, stated yesterday that Isuzu could potentially commence production in Indonesia as early as next year. However, Isuzu denied any such relocation plans today.
In the morning trade on the Stock Exchange of Thailand (SET), shares of AAPICO HiTech, an automotive parts manufacturer responsible for creating chassis frames for the Isuzu pick-up model, dropped by 12%, despite a market index gain of 0.11%. Additionally, Thai Stanley Electric, an auto lighting equipment manufacturer, experienced a 4% decrease in share price. The overall auto sector index in the country fell by 3.34%.
Thailand serves as a major auto production and export centre for Southeast Asia, housing prominent global producers such as Toyota and Honda. The Thai government has been working to preserve this status by offering incentives to attract investment in electric vehicle (EV) production.
Chinese EV manufacturer Great Wall Motor plans to establish a US$30 million battery pack assembly plant in Thailand, while BYD aims to set up a factory by 2024. Producing approximately 1.5 million to 2 million vehicles annually and exporting half of them, Thailand has earned the nickname “Detroit of the East.” The country’s strong supply chain of auto parts, developed over the past few decades, has further solidified its automotive reputation.
However, the transition to EVs, which require significantly fewer parts than traditional automobiles, has forced the industry to adapt. The Thai government has set a goal for at least 30% of the country’s auto production to be EVs by 2030.
Indonesia has also been building its auto industry, especially in the EVs and batteries as the country has a lot of supplies of raw materials. Isuzu said that it was waiting for the perfect time to introduce electric pickups and trucks in the Thai market in December 2022, reports Bangkok Post.
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