Thailand is set to benefit tremendously from the elimination of import duties on automobiles and parts under the Asean Free Trade Area scheme, industry leaders say.
The 5-per cent tax on automobiles and parts traded among the six founding Asean countries -Thailand, Malaysia, Singapore, Brunei, the Philippines and Indonesia - was abolished on January 1, in a move towards turning Asean into a single market.
This would help Asean nations become more competitive against other Asian giants - particularly China and India.
Despite the global recession last year, auto sales in China reached 13 million units and in India 2.2 million units, while combined sales in Asean hit 1.8 million units.
Since major markets such as the US, Europe and Japan are saturated and stagnant, due to the financial crisis, any growth in the auto industry would have to take place in the Asian region, analysts say.
Adisak Rohitasune, vice chairman of the Federation of Thai Industries and vice president of Asian Honda Motor, says the liberalisation of the auto and parts trade will not only help Asean manufacturers, but also draw investment into the region.
"This will help increase sourcing of raw materials and parts within the region, and expand the automobile market across the region," he said.
With the tariff barrier in Asean markets lifted, it would not be surprising to see a particular product being manufactured in one country and exported to other countries within the region, he said.
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