Thai industries foresee slow growth, tourism still below 2019 levels

The Federation of Thai Industries (FTI) anticipates sluggish growth for the steel and internal combustion engine (ICE) industries this year, whilst the tourism sector remains unlikely to reach 2019 levels.

FTI chairman Kriengkrai Thiennukul emphasised the need for economic measures to support certain industries due to these projected declines.

The steel and iron industry faces a slowdown as state construction projects are delayed due to prolonged budget planning for fiscal this year, which started on October 1 of the previous year, reported Bangkok Post.

The protracted formation of a new coalition government has been identified as the cause of this delay. Steel manufacturers are urging the government to expedite budget spending to support infrastructure construction projects, fostering economic growth.

Another challenge facing the local steel industry is the influx of cheap steel imports from China and neighbouring countries. The industry’s capacity utilisation currently remains low.

The automotive sector is also set for transformation, with increased investment in electric vehicle (EV) production facilities as the government introduces a new EV incentive package, known as EV3.5.

This development is expected to impact manufacturers of ICE cars and their auto parts, with a projected decline in the number of ICE vehicles as EV manufacturing expands.

Approximately 1,700 local auto parts companies, primarily small and medium-sized original equipment manufacturers categorised as tier 2 and tier 3 in the auto parts supply chain, could face challenges if they fail to adapt to this shift.

Tier 1 auto parts producers, typically subsidiaries of global car companies, are likely to be less impacted.

The FTI is collaborating with car manufacturers in Japan, Europe, the US and China to aid car parts manufacturers in transitioning their ICE-related technology to EV-compatible technologies.

In related news, leading Chinese car manufacturer BYD reported selling 526,409 fully electric vehicles (EVs) in the fourth quarter, challenging Tesla’s global market leadership.

According to a stock exchange filing, BYD’s sales, boosted by end-of-year discounting, hit 340,178 EV and hybrid units in December, including 190,754 all-electric models.

Overall, BYD reported a 62% year-on-year increase last year, selling 3.01 million units. Read the full story HERE.