China Emerges as a Competitor to Japanese Automakers in Thailand

Japan has long been the cornerstone of Thailand's automotive industry, establishing a stronghold in the market since the post-World War II era. By the late 1970s, Japanese manufacturers, including Mazda and Nissan, captured approximately 90 percent of car sales in Thailand. Despite attempts by American and South Korean automakers in the 1990s to penetrate the market, they struggled to make significant inroads against the established Japanese brands. However, the landscape is shifting as China emerges as a formidable competitor. In December 2023, Thailand's Prime Minister Srettha Thavisin issued a stark warning to Japanese automakers during his visit to Japan. He urged them to accelerate investments in electric vehicles (EVs) to avoid losing market share to Chinese companies, which are rapidly expanding their presence in the region. Thavisin emphasized the urgency of adapting to the evolving automotive landscape, highlighting that Japanese firms must innovate and diversify their offerings to maintain their competitive edge. The prime minister's message reflects a growing concern that without swift action, Japan's automotive legacy in Thailand could be jeopardized by the aggressive strategies of Chinese manufacturers. As the Thai market braces for this potential shift, the future of Japan's automotive dominance hangs in the balance, with the need for strategic investments in EV technology becoming increasingly critical. The outcome of this competition will not only shape the automotive industry in Thailand but could also have broader implications for the region's economic landscape.