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Thailand's Automobile Industry: The 'Detroit of Asia' Confronting the Bev Transition

Author

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  • Prema-chandra Athukorala
  • Archanun Kohpaiboon

Abstract

This paper explores the growth trajectory and current state of Thailand's automotive hub-often dubbed the "Detroit of the East"-and the adjustment challenges it faces in transitioning from the combustion engine era to the electric vehicle era. The findings suggest that Thailand's success has been driven by a combination of structural changes in the global automotive industry, which opened opportunities for peripheral countries to join production networks, and the pragmatic, market-oriented policy approach of Thai authorities, which made the country an attractive location for international production. Despite this impressive performance during the combustion engine era, Thailand's automotive sector is now undergoing significant structural adjustments due to the rise of electric vehicles. Whether Thailand can continue to function as a global automobile hub under the emerging dominance of Chinese BEV manufacturers remains uncertain. Even under the optimistic scenario of vehicle assembly continues to expand in Thailand under Chinese dominance, the parts and components segment-which accounts for the bulk of employment in the industry-is likely to face a substantial contraction in the BEV era. This gloomy prospect underscores the need for a reorientation of industrial and labour market policies, including targeted support for supplier upgrading, workforce reskilling, and the development of complementary manufacturing and services capabilities to mitigate employment losses.

Suggested Citation

  • Prema-chandra Athukorala & Archanun Kohpaiboon, 2026. "Thailand's Automobile Industry: The 'Detroit of Asia' Confronting the Bev Transition," Departmental Working Papers 2026-03, The Australian National University, Arndt-Corden Department of Economics.
  • Handle: RePEc:pas:papers:2026-03
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    References listed on IDEAS

    as
    1. Peter Warr & Archanun Kohpaiboon, 2018. "Explaining Thailand’s Automotive Manufacturing Success," Departmental Working Papers 2018-02, The Australian National University, Arndt-Corden Department of Economics.
    2. John Thoburn & Kaoru Natsuda, 2018. "How to conduct effective industrial policy: a comparison of automotive development in the Philippines and Indonesia," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 23(4), pages 657-682, October.
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    Keywords

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    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy

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