A parallel to the fact, that Thailand is the largest automotive manufacturer in Southeast Asia, is the development of the auto parts and components industry. Since around 80% of the country’s overall auto assembling capacity belongs to Japanese makers, most of the OEMs are mainly members of Japanese keiretsu groups supplying their own costumer base. These companies can be categorized into three groups: a member in Japanese family companies, a joint venture with Japanese technology owners, and a company having technical assistance or licensing agreements with Japanese firms. However, in recent years, many new investments from non-Japanese 1st tier suppliers entered the country. The majority of pure Thai companies are in the 2nd tier, 3rd tier and in the REM business. The automobile parts manufacturing sector in Thailand is considered to be the most capable in South East Asia. According to Japan Automobile Manufacturers
Association (JAMA), the quality of automotive parts in Thailand is rated as the best among ASEAN countries. The local part manufacturers supply approximately 80% of all parts used for assemble of pick-up trucks, approximately 55% for passenger cars and nearly 100% for motorcycle. Locally produced or assembles parts include engines, suspension control and spring, axles, hubs, propellers shaft, brakes, clutches, steering system, body parts, electronic parts, air conditioning, tires, wheels, internal and external trim components and glass.
In recent years, the number of auto parts manufacturers for non-Japanese assemblers has increased considerably as a result of Ford and General Motor’s establishment in the Thai automotive industry. The American assemblers have brought a number of their own 1st tier supplier to Thailand. Although European assemblers have entered the market earlier, they tend to have fewer local part suppliers due to their small assembling volume.
Also many new overseas joint ventures companies have come into operation in recent years to supply the local assembly lines operated by the international manufactures. While much of the output from the independent Thai companies goes to the original equipment manufacturer (OEM) market, the greater volume goes to the replacement equipment (REM) market.
With quality a prime consideration, the industry is going though a continuing process of upgrading, with ISO 9000 certification now becoming standard amongst the main producers.
