Thailand Government Has Yet to Respond to Requests to Help Automobile Industry Hurt by COVID-19

Thailand’s automobile industry has been badly hurt as a result of COVID-19. The automotive industry in Thailand employs around “850,000 people and contributes about 10% to the country’s GDP”. It has been estimated by the Federation of Thai Industries (FTI)’s automobile club that total car production in the country could be cut in half during 2020. Thailand has been the world’s eleventh largest car manufacturer, producing more than 2 million cars during 2019.

During the first quarter of this year, Thailand produced around “453,682 vehicles between January and March, representing a drop of 19.2%. Car sales decreased to 200,064 or 24.09% in the same period of time”. To elaborate upon the automobile industry in Thailand being adversely affected due to COVID-19, Surapong Paisitpatanapong, a spokesperson for the Thai automobile club, said “most car manufacturers will only return to partial production in May because of their stock capacity, poor sales at dealerships and the disruption in the supply line. If the COVID-19 outbreak lasts until September and vehicle production continues to decline, there might be possible unemployment of workers in the Thai automobile sector.”

At present, there are some recommendations that FTI has provided to the Thai Government in order to safeguard the automotive industry in Thailand during the COVID-19 pandemic. First, the FTI “is asking the government for supportive measures to aid automobile manufacturers” such as a subsidy for people who wish to turn in their old car for a new one to promote domestic sales. Newer cars will also reduce CO₂ emissions. FTI also suggests “a 50% excise tax reduction until the end of this year,” and “a delay in enforcement of Euro 5 emission standards until after the COVID-19 pandemic”. However, the FTI has not yet received a response or any form of assistance from the government regarding their requests. The government has yet to earmark any relief funds for the automotive sector. Therefore, some sectors within the automotive industry in Thailand might collapse if government assistances are not immediately provided. Paisitpatanapong mentions, “the club is worried about the automotive and supply chains, as the automotive and electronics parts sectors could collapse.”

Activity Rating: ^*** Right Direction

The proposed recommendations made by the FTI’s automotive club are certainly a positive move. However, more is yet to be done to ensure that automotive industry in Thailand recovers from the economic downturn during COVID-19. Here, the Thailand Government needs to step in for safeguarding the automotive sector. The government has to collaborate with FTI’s automotive club in order to provide appropriate relief assistance, subsidies as well as incentives to the automotive sector. The government should also collaborate with FTI’s automotive club for facilitating concrete relief packages for the workers in the automotive sector. Relief packages will ensure that workers have a source of income if they become unemployed during the COVID-19 pandemic. Finally, the Government should provide financial assistance and relevant technologies to the automotive industry for producing vehicles, which are energy friendly and produces less carbon footprint.

We also don’t agree with the recommendation of delaying implementation of Euro 5 emission standards since such a delay will harm efforts to reduce emissions and support the Paris Agreement.

Take Action

To ensure that automotive industry in Thailand recovers from the economic downturn during the COVID-19 pandemic, you can send the following action alert message to the Office of the Natural Resources and Environmental Policy and Planning (ONEP):

We encourage the Government of Thailand to support the automotive sector during the COVID-19 pandemic. The automotive sector in Thailand has been adversely affected due to the current economic downturn, which is leading to lower car productions and lower car sales. Some sectors of the automotive industry might also collapse. In order to ensure that automotive industry in Thailand recovers your role as a prominent member of the Office of the Natural Resources and Environmental Policy and Planning (ONEP) will be crucial. Here, I request you to kindly consider three recommendations. One recommendation is to provide appropriate relief assistance, subsidies as well as incentives to the automotive sector. This can be provided in the form of relief packages for the workers in the automotive sector. Second, it will be necessary to cover some portions of the vehicle production costs. This will help reduce the vehicle production costs for automotive industries. Finally, financial assistance and relevant technologies should be provided to the automotive industry for producing vehicles, which are energy friendly and produce a lower carbon footprint.

Send Take Action Message to:

Dr. Raweewan Bhuridej

Secretary General

Office of Natural Resources and Environmental Policy and Planning

60/1 Soi Pibulwatana 7, Rama VI Road,

Phayathai, Bangkok 10400 Thailand

Telephone: 0-2265-6506, Fax: 0-2265-6506

Email: rawewan@onep.go.th

Dr. Asadaporn Kraipanont

Deputy Secretary General

Office of Natural Resources and Environmental Policy and Planning

60/1 Soi Pibulwatana 7, Rama VI Road,

Phayathai, Bangkok 10400 Thailand

Telephone: 0-2265-6505, Fax: 0-2265-6506

Email: kasdaporn@gmail.com

Learn More

For more information about the impact upon Thailand’s automotive sector during the COVID-19 please visit: https://www.thaienquirer.com/12888/thailands-car-production-could-be-halved-in-2020/

For more information about the impact upon Thailand’s automotive sector during the COVID-19 please visit: https://www.bangkokpost.com/business/1927372/fti-sounds-alarm-on-auto-industry

For more information please contact Climate Scorecard Thailand Country Manager Neebir Banerjee: Neebir@climatescorecard.org