BOI Guarantees Thai Parts Manufacturers Equal Benefits with Foreigners, Driving EV Era Transition
BOI clarifies investment promotion measures are open to all nationalities, focusing on project quality and national benefits, while revealing 4 mechanisms to help Thai operators adapt to the electric vehicle wave.
Stock photo for illustration only, not from the actual event
- BOI confirms investment projects are evaluated based on quality, not nationality.
- Existing Thai operators can apply for promotional privileges to upgrade machinery and technology.
- Local Content requirement set at 40-45%.
- Support for Thai-foreign joint ventures and business network linkages.
Mr. Narit Therdsteerasukdi, Secretary General of the Thailand Board of Investment (BOI), addressed concerns raised by Thai auto parts entrepreneurs regarding limitations in applying for investment promotion and the differences between Thai and foreign manufacturers. This comes as the automotive industry faces challenges from a rapid transition, including declining orders for internal combustion engine parts, liquidity issues, and high technology costs.
The BOI reaffirmed that investment promotion covers both vehicle and auto parts manufacturers, evaluated based on product dimensions, manufacturing processes, technology, investment capital, project feasibility, and benefits to Thailand. Both Thai and foreign operators can apply under the same criteria, with relaxed measures and additional privilege packages acting as a handicap for Thai SMEs.
Mr. Narit added that Thailand's automotive and parts industry has been open for over 60 years, hosting leading companies from Japan, South Korea, China, Europe, America, as well as numerous Thai parts manufacturers that have continuously received promotion, such as Thai Summit Group, Aapico Hitech, Somboon Group, Fortune Parts Industry, Thai Rung Union Car, Sammitr Autoparts, P.C.S. Machine Group, Thai Steel Cable, and Panus Assembly. All projects must prove actual investment, domestic manufacturing processes, and genuine value creation.
“Thailand's automotive and parts industry” has been an open industry for over 60 years. In the past, leading companies from various countries have invested in Thailand... and numerous Thai parts manufacturers have continuously received dozens of promotional projects from the BOI.
Narit Therdsteerasukdi
The transition toward the Electric Vehicle (EV) industry represents a major challenge for traditional Original Equipment Manufacturers (OEMs) relying on internal combustion engines, as demand for certain parts like engines and exhaust systems will inevitably decline. The BOI's initiative allowing existing factories to apply for efficiency-upgrade privileges, adopt automation, and expand into new industries such as aviation, medical devices, or robotics is a crucial approach to helping the Thai supply chain survive disruption and continue growing on the global stage.
To support Thai auto parts manufacturers, the BOI operates through 4 key mechanisms:
- Promoting efficiency enhancement and technological transition by integrating automation, robotics, and digital systems into manufacturing processes.
- Promoting joint ventures between Thai and foreign companies, requiring Thai legal entities to hold at least 20 percent of shares.
- Promoting Local Content by increasing domestic procurement of raw materials and parts by 40-45 percent for electric vehicle manufacturers.
- Connecting buyers with Thai manufacturers through the SUBCON Thailand event and Sourcing Day activities to push Thai producers into Approved Vendor Lists.
Source: Techsauce
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