As the year draws to a close, the automotive industry in Thailand has witnessed significant developments and emerging prospects. According to Mongkol Somphol, the Leader of the Automotive Sector, and Chodok Panyavaranant, Ph.D., the Manager of Clients & Markets at Deloitte Thailand, the EV3.0 scheme has had a profound impact on the electric vehicle (EV) market in the country.
During the initial nine months of 2023, Thailand observed a registration of over 140,000 newly registered 4-wheel EVs, constituting more than a quarter of the total 520,000 registered vehicles during the same period. This data signifies the consumer preferences, as illuminated in Deloitte’s 2023 Global Automotive Consumer Study, where 60% of Thai respondents indicated their intention to opt for an EV as their next vehicle.
Despite the forthcoming reduction of subsidies under the EV3.5 scheme, the 30@30 policy has been influenced positively by this trend. Interestingly, new market players are now entering the industry with heightened aggression.
However, amidst these swift transformations, concerns arise regarding the adaptation of Thailand’s automotive industry’s supply chain and workforce. Deloitte’s projections suggest that the market value of businesses related to Internal Combustion Engine (ICE) technology is projected to decrease by 10-15% in 2025 in comparison to 2020.
To attract foreign investment and solidify its position as the last ICE vehicle production base in the world, Thailand has not actively pursued policies to establish its own car brand. Nevertheless, this transition is predicted to result in an 18% reduction in the global automotive workforce by 2023 in comparison to 2007.
While challenges are discernible, the automotive business sector is anticipated to witness fresh opportunities for growth, particularly in the software domain. As the demand for EVs continues to surge, there will be a need for software that enhances the travel experience for customers.
Deloitte’s report, Software-Defined Vehicles: Engineering the Mobility Revolution, envisions a notable increase in the software-defined vehicle (SDV) business, escalating from 2.4% in 2021 to 90% in 2029. SDVs have the capability to transform mechanical and electrical systems into software that can be updated, leading to more precise road condition detection and obstacle avoidance.
Furthermore, SDVs present a business perspective that encompasses diverse dimensions, including autonomous driving, powertrain and vehicle motion, user-centric experience, architecture core blueprint, and data-driven and connected services. Each of these aspects unveils new prospects for innovation and advancement in the automotive sector.
The evolution and expansion of the automotive industry in Thailand present fresh opportunities and challenges. It is imperative for industry stakeholders to navigate these changes strategically and proactively. As the landscape continues to evolve, the potential for progress and innovation is immense, but it must be pursued with careful consideration and planning to ensure a successful transition into the future.
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