Lowy Institute this week released a new commentary arguing that Thailand’s automotive decline stems primarily from weak domestic demand and EV incentives that have failed to build a local supplier base, not merely from Chinese import competition.
The commentary states that easing household debt to stimulate domestic consumption would give Thailand greater leverage to enforce genuine localisation requirements, rather than relying on tax concessions or import tariffs.
Quote from the commentary:
Thailand’s case also offers a lesson for other countries competing for Chinese EV investment. The broader questions – whether generous short-term concessions can ever be converted into long-term industrial capability, or whether most of the value-added production will remain in China – should be central to policy discussions. Otherwise, the countries competing hardest for Chinese investment may find their existing industries shrink without new ones taking their place.
Read the full commentary: Thailand’s auto industry has a bigger problem than China