Trends and Policy of

Thailand Automotive Industry and

Electric Vehicles
Mr.Vichai Jirathiyut
President, Thailand Automotive Institute
December 3, 2015 (30 minutes)
1
Outline

I. World Automotive Industry Trend

II. ASEAN Automotive Industry Overview
III. Thailand Automotive Industry Overview and Current Position
IV. Policy & Trend

2
I. World Automotive Industry Trend
I. Global Economic Trend Challenges for Thailand

Global Economic Trend in 2050 impact to Thailand, be challenged by new competitors

Indonesia,
Germany,
Japan,
Brazil,
UK

Source: The Economist Intelligence Unit

 I. World motor vehicle production

Source: International Organization of Motor Vehicle Manufacturers (OICA)

 I. World motor vehicle sales

Source: International Organization of Motor Vehicle Manufacturers (OICA)

II. ASEAN AUTOMOTIVE INDUSTRY OVERVIEW
II. ASEAN Automotive Industry Overview
ASEAN Key Indicators
Population 2014 : 629 million
GDP 2014 : 2,465 billion USD
GDP Growth rate 2014 : 5.7 %
Total Production : 4.0 million units
Total Sales : 3.2 million units Philippines
Population : 103 million
Production : 88,845 units
Vietnam Sales : 234,747 units
Population : 92 million Product Champion : Auto
Production : 121,084 units parts (Transmission)
Sales : 133,588 units
ProductChampion
Thailand :Motorcycle
Population : 68 million
Production : 1,880,007 units
Sales : 881,832 units
Product Champion : 1-ton Pick
up, Eco Car

Malaysia
Population : 30 million
Production : 596,418 units
Sales : 666,465 units
Product Champion : Passenger Car

Indonesia
Population : 255 million
Production : 1,298,523 units
Sales : 1,208,019 units
Product Champion : MPV, LCGC
 II. ASEAN Automotive Industry Overview

(thousands) ASEAN Motor vehicle production and sales

5,000
4,439 Production
4,238
3,985
4,000

3,102 2,995 3,550

3,473
3,000 2,697 Domestic sales
2,216 3,190
2,022 2,124 2,596
2,516
2,000
2,127
1,782 1,887 1,913

1,000

0
2006 2007 2008 2009 2010 2011 2012 2013 2014

Source: ASEAN Automotive Federation (AAF)

Note: ASEAN countries exclude Cambodia, Laos and Myanmar
 II. ASEAN Automotive Industry Overview

ASEAN Motorcycle production and sales

(thousand)
20,000

14,982 14,546
15,000 13,843 14,099 Production, 14,164
14,610
11,452 13,634 13,869 Sales, 13,563
13,217
10,000 11,241

5,000

0
2009 2010 2011 2012 2013 2014

Source: ASEAN Automotive Federation , Analyze by Thailand Automotive Institute

Note: ASEAN countries exclude Cambodia Laos and Myanmar
 II. ASEAN Truck Production
Source:OICA,AnalyzebyTAI
Vietnam

2014 2,600
2013 2,020
2012 1,570 Philippines
2011 1,277
Thailand
2010 1,952 2014 4,720
2009 884 2013 3,700
2014 14,930
2008 1,334 2012 8,970
2013 41,342
2011 8,112
2012 34,852
2010 9,497
2011 14,466
2009 6,861
2010 16,258
2008 7,976
2009 10,930
2008 13,018

Malaysia
Indonesia
2014 5,100
2013 4,620
2012 2014 125,610
5,194
2011 2013 136,746
6,012
2012 147,010
2010 4,384
2011 120,522
2009 3,217
2010 100,230
2008 4,146
2009 55,766
2008 81,332
 II. ASEAN Bus Production
Source:OICA,AnalyzebyTAI

Vietnam:n.a.

Thailand

2014 589
2013 756
Phillipines :n.a.
2012 582
2011 463
2010 487
2009 458
2008 376

Malaysia Indonesia
2014 740
2013 856 2014 4,683
2012 589 2013 4,702
2011 1,128 2012 5,299
2010 1,081 2011 4,195
2009 798 2010 4,106
2008 1,208 2009 2,328
2008 2,956
ASEAN strengthen with the comprehensive partnership

ASEAN +3
[Japan, China, Korea]

ASEAN + 6 [RCEP]
[Japan, China, Korea, India, Australia,
New Zealand]

*RCEP: Regional Comprehensive Economic Partnership

III. THAILAND AUTOMOTIVE INDUSTRY OVERVIEW
AND CURRENT POSITION
III. Thailand Positioning in World Motor Vehicle Production Ranking
Datasource:OICA;AnalyzedbyTAI
Worldmotorvehicleproductionranking2014

14 11
10
4 3
2 13
9
1
5
7
6 12

15
8

Production2014 (x1,000,000units)
1.China 23.72 6.India 3.84 11.Russia 1.89
2.USA 11.66 7.Mexico 3.36 12.Thailand 1.88
3.Japan 9.77 8.Brazil 3.14 13.France 1.81
4.Germany 5.90 9.Spain 2.40 14.UK 1.59
5.SouthKorea 4.52 10. Canada 2.39 15.Indonesia 1.29 15
III. Thailand Positioning in World Motorcyle Production Ranking

Worldmotorcycleproductionranking2013

23
million
Production2013
(x1,000,000units)
16 1.China 22.89
million 2.India 16.41
3.Indonesia 7.78
4.Vietnam 3.26
5.Thailand 2.21

7
million
III. Thailand Automotive Industry Overview
International car production base
III. Thailand Automotive Industry Overview
 III. Thailand Automotive Industry Overview

Source: Analyzed by Automotive Intelligence Unit (AIU), TAI, 2015

VI. Policy and Trend
VI. Policy and Trend of ASEAN Countries
Trend of Policy on ASEAN Countries Automotive Industry
Thailand
VISION Thailand is a global green automotive production base with strong domestic supply chains
which create high value added for the country
Promoted Eco car II
- Emission Standard EURO V CO2 <100 gram./km. - Fuel consumption 4.3 litr/100 km.
- Passive and Active Safety Standard based on UN ECE reg.

Malaysia Indonesia
Green Initiative Promoted Low Cost Green Car
- Announced NAP 2014 And Low Carbon Emission
- Target: EEV (Energy Efficient Vehicles) means efficient with Program (LCGC & LCEP)
CO2/km. and fuel consumption (incl. ICE, Hybrid, EV, CNG, LCGC: 20 km./L. GV 1.0-1.2 cc., DV1.0-1.5 cc.
LPG, Biodiesel, Ethanol, Hydrogen, Fuel cell) Luxury tax 0% from current rate 10%
- The 3 main directions: Investment, Technology and LCEP: FE 20-28 km/L:
Engineering and Market Expansion 25% reduction (currently 20-75%)
- The 3 main strategies: Human Capital Development, Supply FE 28 km/L and more:
Chain Development and Safety, Security and Environment 50% reduction (currently 20-75%)
Electric vehicles: 0%
Analyzed by Automotive Intelligence Unit (AIU), TAI, 2014
Source: NAP 2014 and AAF Report 2014
 VI. Policy and Trend

Eco-Car Phase I vs. Eco-Car Phase II

Eco-car phase I Eco-car phase II
Clean: Euro 5 or higher
Clean: Euro 4 or higher (UN ECE R83 (06) rev.4 or higher)
(UN ECE R83 rev.2 (2005) or higher)
Efficiency:
Efficiency: Fuel consumption < 4.3 L/100 km
Fuel consumption < 5 L/100 km CO2 emission < 100 g/km
CO2 emission < 120 g/km (UN ECE 101 rev.2 or higher)
(UN ECE 101 rev.1)
Safety:
Safety: Passive Safety: full frontal and side
Passive : full frontal and side impact impact protection based on UNECE
protection based on UNECE regulations regulations Active Safety: ABS, ESC
(UN ECE R94 rev.0, R95 rev.0) (UN ECE R94 rev.1, R95 rev.1 or higher
and R13H rev.2 or higher)
VI. Policy and Trend

Criteria and Incentives of Eco car II

Criteria
Package: Car assembly + Engine
manufacturing + Part manufacturing
Actual production not less than 100,000
units per year from year 4
Have to start by 2019
Qualification
4.3 liter per 100 km.
Euro V standard
CO2 not exceed 100 grams per km.
Safety standard UN ECE R 94&95
Safety part: ABS ESC
At lease 4 of the 5 Cs of engine parts
Investment minimum: 6.5 billion Baht
Deadline submission 31 March 2014
Incentives
Exemption of import duty on
machinery
Up to 90% import duty reduction on
raw material
Exemption on corporate income tax
of 6 years, not exceed the project
investment amount
One or Two additional year if there is
investment or expenditure in
developing Thai auto part suppliers
 VI. Policy and Trend
Structure of Thailand Automotive Excise Tax
.

() ()
CO2
( HP)
E10 E20 E85 E10/E20 E85/NGV Hybrid

} }
,


2,000 CC 30 25 22* 100 g/km 10*
10
30* 25* 20
2,001-2,500 CC 35 30 27 101-150 g/km
151-200 g/km 35 30 25
2,501-3,000 CC 40 35 32
>200 g/km 40 35 30
>3,000 CC 50 50 50 >3,000 CC 50 50 50
( 220 HP)
200 g/km 25*/12/5/3,18
PPV / DC / Space Cab / Pick up 3,250 CC 20/12/ - /3,18
>200 g/km 30/15/7/5,18
>3,250 CC 50 >3,250 CC 50
Eco Car (Benzine/Diesel) / E85 1,300/1,400 CC 17 100 g/km 14*/12*
101-120 g/km 17/17
Electric Vehicle / Fuel Cell / Hybrid 3,000 CC 10 10
10 **
>3,000 CC 50 >3,000 CC 50
NGV-OEM 3,000 CC 20 **
>3,000 CC 50 >3,000 CC 50

10 CO2 500 g/km / PPV CO2 200 g/km /

* : (Active Safety)
Eco Car CO2 100 g/km
**
CO2 * 1,780 CC 2,000 CC

Source: The Excise Department, Ministry of Finance (Thailand)

VI. Policy and Trend

Energy Efficiency Standardization

VI. Policy and Trend

Thailand EV Campaign

NRC proposed the National EV promotion project to Thai government.

 VI. Policy and Trend

EVPromotionRecommendation
ProposedbyMinistryofScienceandTechnology

Source:Durongkaveroj,P.(MinisterofScience&Technology)StrategytopromoteThailandasanASEANEVhub.PresentedatArmyClub(12June2015).
 VI. Policy and Trend

ActionPlanforEVPromotion
ProposedbyMinistryofScienceandTechnology

Source:Durongkaveroj,P.(MinisterofScience&Technology)StrategytopromoteThailandasanASEANEVhub.PresentedatArmyClub(12June2015).
 VI. Policy and Trend

Studying and Demonstration Projects on EV in Thailand

Electricity Small EV for city use Electricity generating capacity /

Consumption Grid readiness preparation

Zero-emission EV-Bus

Source:Durongkaveroj,P.(MinisterofScience&Technology)StrategytopromoteThailandasanASEANEVhub.PresentedatArmyClub(12June2015).
VI. Infra Structure Testing, R&D Center
Thailand Automotive Testing Center
 Investment Promotion
Policy for Super Cluster
Super Cluster as of BOI Announcement 10/2558

Super Clusters are clusters for activities using advanced technology, and
future industries.

Previleges :

(1) 8-year corporate income tax exemption with exemption cap in accordance
with the condition prescribed for the activity in BOI Announcement No.
2/2557 dated December 3, 2014
(2) A 50 percent reduction from the normal rate of corporate income tax on the
net profit deriving from the promoted activity for a period of 5 years counting
from the expiry date of the corporate income tax exemption
(3) Other incentives and privileges will be in accordance the criteria prescribed
in BOI Announcement No. 2/2557 dated December 3, 2014
Super Cluster as of BOI Announcement 10/2558

Condition:-
3.1 Must have cooperation with academic institutions, research institutes or
Center of Excellence in the Special Economic Development Zones in the
form of clusters in a prescribed types of cooperation as follow:
3.1.1 Cooperation under the Talent Mobility, Work-Integrated Learning
Project or Cooperative or Dual Systems
3.1.2 Human Resource or Technological Development Cooperation as
approved by the Board of Investment
3.2 Must generate revenue within December 31, 2017 unless under necessary
circumstances, the Office of the Board of Investment may consider
extension as deemed appropriate.
3.3 Must submit application for investment promotion within December 30,
2016

4. Project must be located in Ayutthaya, Pathum Thani, Chon Buri, Rayong,

Cha Cheong Sao, Prachin Buri and Nakhon Ratchasima for the eligible list
of activities as follows:
Super Cluster as of BOI Announcement 10/2558

Type of Business Condition

4.7 Manufacture of automobile engines Project must have part forming, not less than 4 out of 5 parts,
as follow:
Cylinder Head, Cylinder Block, Crankshaft, Camshaft and
Connecting Rod.
4.8 Manufacture of vehicle parts
4.8.1 Manufacture of vehicle parts using high technology including:
4.8.1.1 Substrate for Catalytic Converter
4.8.1.2 Electronic Fuel Injection System
4.8.1.3 Automotive Transmission
4.8.1.4 Electronic Control Unit (ECU)
4.8.2 Manufacture of automobile parts for safety parts and
energy-saving parts
4.8.2.1 Anti-Lock Brake System (ABS) or Electronic Brake
Force Distribution (EBD)
4.8.2.2 Electronic Stability Control (ESC)
4.8.2.3 Regenerative Braking System
4.8.2.4 Idling Stop System
4.8.2.5 Autonomous Emergency Braking System
Super Cluster as of BOI Announcement 10/2558

Type of Business Condition

4.8.3 Manufacture of parts for Hybrid, Electric Vehicle (EV) and Plug-in
Hybrid Electric Vehicles (PHEV)
4.8.3.1 Battery
4.8.3.2 Traction Motor
4.8.3.3 Air-condition system
4.8.4 Manufacture of rubber tires for vehicles Projects must have part forming process and assembling
4.8.5 Manufacture of Fuel System Parts including process as approved by the Board.
4.8.5.1 Fuel Pump
4.8.5.2 Injection Pump
4.8.5.3 Injector

4.8.6 Manufacture of Transmission System Parts including Projects must have part forming process and assembling
4.8.6.1 Sun Gear process as approved by the Board.
4.8.6.2 Ring Gear
4.8.6.3 Shift Gear
4.8.6.4 Transfer Case
Super Cluster as of BOI Announcement 10/2558

Type of Business Condition

4.8.6.5 Torque Converter
4.8.6.6 Carrier
4.8.6.7 Propeller Shaft Projects must have part forming process and assembling
4.8.6.8 Drive Shaft process as approved by the Board.
4.8.6.9 Universal Joint
4.8.6.10 Differential

4.8.7 Manufacture of Engine System Parts including

4.8.7.1 Turbocharger
4.8.8 Manufacture of Safety Parts including Projects must have part forming process and assembling
4.8.8.2 Manufacture of Air Bags including process as approved by the Board.
4.8.8.2.1 Inflator
Super Cluster as of BOI Announcement 10/2558

Type of Business Condition

4.12 Manufacture of motorcycles (except less than 248 cc engine
displacement)
1. Project must have forming process of engine parts, as
follow:
Cylinder Head, Cylinder Block, Crankcase, Crankshaft,
Camshaft and Connecting Rod.
1.1 For manufacturing motorcycles with more than 248 cc
engine displacement but less than 500 cc, project must have
forming of not less than 4 out of 6 parts.
1.2 For manufacturing of motorcycles with more than 500 cc
engine displacement, project must have forming of 2 out of 6
parts.
2. Project must have structural welding process and spray
painting process.
3. Investment plan for manufacturing and utilization of parts
must be submitted and approved by the Board of Investment.
Direction of Electric Vehicle in Thailand
Short Term :
Promote in public transport vehicle ex. E-Bus, etc.
Preparing Infrastructure
Consumer awareness about environmental and energy saving
Study about BEV in Pro. & Con.
Promoting and enhancing production capability for local manufacturer and part supplier for
components
Medium and Long Term :
Promoting and enhancing production capability for local manufacturer and part supplier for
components
Continuing Infrastructure preparing and expand
Thank You
Thailand Automotive Institute
www.thaiauto.or.th