A research study submitted in partial fulfillment of the requirements for the degree of Master of Business Administration, School of Management

Research Studies Project Report (M.B.A.) - Asian Institute of Technology, 2001

Thailand's automotive industry went through a series of serious changes during the last decade. Years of heavy growth at the beginning of the 1990s were followed by two years of almost diminishing local demand. The car market in Thailand peaked in 1996, with sales of approximately 174,000 units. Mirroring the economy, sales then fell by more than 73% to just 46,400 units by the end of 1998 before recovering to around 80,000 units at the end of 2000. However, a slowdown could have been witnessed at the end of the year 2000 already. With another economic slowdown anticipated by most economic research institutes, vehicle sales will remain sluggish in the year 2001. The competitive structure of Thailand's automotive industry remained almost unchanged in recent years. Japanese vehicle manufacturers captured 80% of the Thai market in the year 2000. This dominance remained largely unchallenged for years, despite heavy investments of Ford, GM and European manufacturers. Toyota remained the market leader in Thailand's passenger car segment, followed by Honda, the same constellation for years. Nissan improved its position mainly due to the introduction of the new Sunny. European manufacturers like Mercedes-Benz, BMW and Volvo are dominating the market for luxury vehicles. The objective of this paper is to give a comprehensive overview over Thailand's automotive industry. Due to the large relevance economical and political issue on the industry, this paper is providing an intensive overview over the political and economical system of the Kingdom of Thailand as well.