Hope you enjoyed the video.

From the first slide you can see that the former Czechoslovakia, if they would have stayed together, would export almost as many cars as the USA. Incredible.

As a European (Norwegian), I find this channel to be a goldmine of highly interesting content. As I find there to be a lack of content explaining Asia's situation in the modern times. I frankly had little knowledge of the massive Thai export of cars, only knowing about the Hard-drive manufacturing, so this is great content!

One wrinkle you do not mention in this is that Thailand is Right Hand Drive like Australia, Japan, India, Britain, New Zealand, Hong Kong, and South Africa. It's the reason the Japanese firms were the initial investors. And is also the reason Australia and NZ are the main export markets for Thai-built cars. But it also meant they lost their GM factories when GM decided a decade ago to abandon all RHD markets to simplify platform design.

Auto industry of South Korea was not far from that of Thailand in 70's and 80's. But it started making its own car 1980's, own engine 1990's, and hit 1 million car export a year mark in 2000's. Now 5-th car exporter country by dollar value. It took 40+ years from typical third world local auto industry like Thailand to world class car exporter. One notable difference between SK and Thailand is that SK has single big local car maker with its own brand, Hyndai group. Lesson to learn: Economy of scale is very important in auto industry. Merge small local car makers into single big company to consolidate strength to compete in world market.

Love how you analyse such diverse aspects of industry!

As someone who's family is half Thai I'd wager geography, urbanization, cultural ties, and price are all big contributors: Thailand is located near the South China Sea which has one of the most valuable shipping corridors on Earth with trade passing between Africa, Europe, India, East Asia, and the Western half of the Americas, plus Thailand is only a short distance from China and Vietnam, both large manufactures of Automobile parts. They're near Japan and South Korea, both major manufacturers. This means its easier to ship parts in and vehicles out and also means they're likely to farm out very labor intensive tasks to nearby Thailand. Thailand is also a highly urbanized country with a massive 14 million people (over 20% of the country) living in the Bangkok metro zone which is also right on the water allowing easy importing and exporting of goods, and a highly urbanized population also means much easier manufacturing and having most of the country in 1 giant city means its easy to have multiple different companies making and assembling parts, sections, or entire vehicles. You dont need to make the chassis in Chicago, the engine in Houston, and send them to Detroit for assembly, you can keep different jobs in one city if it has most of the population there. That city also being a massive port on a massive shipping lane makes things even easier. Urbanized populations are also more well educated then more rural ones making things easier. Thailand also has very close ties to the US and they have close business/trading ties to China, South Korea, and Japan. This makes it even easier to get contracts to assemble vehicles for them or manufacture parts. The fact Thailand has close ties to China and the US also means they have large markets to sell to as well as import parts from. The cultural ties also means that there are more personal relationships and business is easier, plus tons of Thai people speak English or Chinese as a second language which makes doing business even more attractive. Another important factor is that costs are low in Thailand. Thanks to the shipping lanes transport costs are low, their location near resources like Chinese or Australian coal, locally made rubber, oil from the South China Sea, and Chinese and Japanese steel means resources are cheap as well. The fact that cost of living is very low and wages are also fairly low means that its cheap to do business in Thailand. Countries like South Korea and Japan can hire fairly well educated Thai people to do jobs for much less then doing it locally, and they have the benefits i already mentioned rolled in. They dont need to go to Africa where wages are low but geography makes business more difficult and where politics makes things less stable. A less important, but still important factor is also stability. Thailand despite all their coups is still fairly stable for doing business. New regimes dont like to "rock the boat" or institute wide ranging changes to society. The new regimes arent revolutionary and they dont want to radically change the countries allegiances or become isolated. New regimes usually just want to be the new leaders of the same basic government, they keep doing business with the same nations, keep local business going as normal, they dont try to nationalize tons of companies or force out certain businesses, and they dont demand radical changes to existing contracts or relationships. They also try to keep corruption manageable as well and try to keep Thailand an attractive trading partner. Compare this to some Arab or African nations where new regimes institute massive changes to their relationships or try to nationalize tons of business, or compare it to communist and socialist revolutionaries where the new regime seizes control of businesses and radically change society. Unpredictable politics like that make doing business less attractive and in complicated, global, heavily integrated industries like automotive

Malaysia's former long time PM Dr. Mahathir's Proton automobile industry went the opposite direction. They wanted to become a regional production powerhouse, but ended up not being to export anything, neither were they able to develop indigenous R&D; even with partnership with Mitsubishi over the 90s and 2000s. mostly because they were super protective of the local market. Failed to compete with Thailand to attract more FDI. and continued to fight among themselves over who owns the profit of the national champion. In the end, Proton had to sell 49.9% of ownership to the Chinese Geely ending much of the debate of keeping all the ownership locally.

This was a really interesting video, thanks!

This is quickly becoming one of my favorite channels. Lots of interesting stuff that no one else talks about without hyperbole.

I feel bad that the Philippines missed out because of poor infrastructure and lack of care from the government. If I remember correctly lots of brand pulled out factories and/or models to be built in Thailand.

Excellent content, really enjoyed watching this video!

I love my Thai car. it was cheap, it has been reliable so far. I'm around 135,000km and some of my exhaust has rusted through and fallen off, but the car still drives and passes emissions.

You have a knack for choosing interesting subject matter.

The conclusion for the thai car industry is extremely relatable for singapore also. Singapore did not leverage enough on their investment and very little indigenous tech scene

I love your industrial policy videos, more of these please

Thanks for the video!

Yet another well researched and delivered article. Uk.

best up and coming channel around.

Good thing you mentioned Thai Rung, the maker of the TR Transformer SUV. The only thing you forgot is the Chaiseri military vehicles.

Can you ever make a video about Indonesia, it's literally an invisible country on the world stage given its size both in economy and population.

Thank you for your analyse. Could you make a subject on Vietnam ?

Love the asianometry

No mention of Thailand’s motorcycle production? My 2008 Kawasaki Ninja 250 EX250J came from Thailand. The 2007 Kawasaki Ninja 250 EX250F model came from there too, which is weird since they had to spool up a factor to produce a 20 year old model for one year only. You did mentioned the Honda City which was sold with a stow-able scooter that fits in the hatch but that’s a huge collector’s items now. ;) I believe Honda makes their CBR250/300 motorcycle in Thailand today.

How interesting the situation of Auto Exports in Thailand is almost the same as the one in Brazl, the modern situation also, both countries are big auto exporters but don't have any big native brand, also both governments had protectionist policies until a new goverment took power and opened its economy. There's also much more similarities between this sector of both countries economy very interesting.

Appreciate the video. It is hard work. Shall possible, do as well do Indonesia Automotive. Thanks.

I think a broader video as to why Thailand could never exit the middle income trap despite good economic growth and great social indices would be great. This was the only major Asian country apart from Japan that did not come under serious Western political influence. Executing large infrastructure projects (for example railways) seems like its a big problem across SE Asia, and it could be a major reason for economic under performance.

Excellent analysis...I know, I was there throughout the period mentioned and was often a miniscule participant to some of what transpired. Your work is a bit light on the heavy weight of socioeconomic influences that often counted for more than all the boardroom maneuvering for profit and governmental thinktank planning to force the birth of an indigenous Thai car industry. Nevertheless, it is an excellent historical synopsis.

Exporting foreign branded cars doesn't condemn Thailand to the middle income trap, especially when most parts are made by domestic companies. Your graph at 11:39 shows how successful Thai car exports are. If the entire Thai industry had developed as well as its car industry, it would be a high income country now. So why has the rest done so badly when automotive did so well?

It's one thing to develop indigenous science and technology capabilities, but quite another challenge to encourage technology transfer. Western and Japanese companies are increasingly unwilling to transfer technology to local companies just to get market access. Many companies have had their fingers burnt in China.

I still wish Thailand would have established 1-2 global car brands from this policy. Would have been a really big national pride. I hope that the next big shift to EVs can help Thailand move up the value chain and eventually establish a global Thai car brand. ICE cars are just so complex and hard to enter the market as a new brand.

In 2005 Australia and Thailand arranged a free trade agreement so they could export their 4X4s to us tariff free but when we tried to export Australian made cars they slapped on a 30% tariff, very unfair but at least we have a cheap holiday destination I suppose

I wonder how Thailand's automotive production and export ecosystem compares with India's. I noticed that India wasn't on that list of Thai car exports anywhere. From what I know about Tata Motors, they've been edging out a lot of competition in India for the small car, small truck and especially EV market. (I did a little reading. I guess they have some substantial presence in Thailand. I don't know how it compares to the Japanese presence)

Nice video....also made a video on indian auto industry.

Info share. CKD means completely knock down for assembly units. CBU completely built up ready for showroom sale

I wish you had explained why the Thai-Honda bikes I 'd like to buy are in so short supply world wide.

Thailand sharing 50% of a 100% is still a success. Sometimes trying to get 100% success never works.

I've seen interviews with the current Thai Prime Minister Srettha Thavisin on the developement of domestic auto-industry. Apparently it is intentional policy not to subsidize/support domestic brands so as to allay fears that Thailand might become another China in IP theft. In this way Thailand hopes to attract more FDI with the promise that investors will not need to worry about harsh proprietary technology transfer as part of the deal. So for now, Thailand (at least with the current government strategy) is settling to become a hub for factories, atleast where the auto-industry is concerned. The focus for branding is on the country itself as a tourist destination.

Belgium had a significant car industry? I never would've guessed.

Due to the rise of electric vehicles, Thailand will face fierce competition from China, and China's automobile export competitiveness has surpassed Thailand.In 2021, China's car exports reached 2.015 million, more than double the 995000 in 2020. China's total vehicle exports exceeded 31 billion US dollars in 2021, which is likely to surpass that of Britain and Spain and is very close to South Korea. If it develops according to the existing situation, it is certain to surpass South Korea within three or two years. This means that 2-3 years later, the export competitiveness of Chinese cars can already rank behind the "three established automobile powers of Germany, Japan and the United States" (the fourth in the world).

As an Indonesian a lot of the problems with the Thailand automotive industry hits close home, especially considering that we are still behind Thailand in terms of export and sales output. Many local manufacturers have come and go because of stiff competition against Japanese manufacturers with decades of local market experience, the very few existing ones normally operate on much smaller, niche scale and you can hardly find their motor vehicle products on Indonesian roads.

In this year, PPT (Thai Company) join with Foxconn(Taiwanese) will make EV Car in Thailand, plus other Thai companies already produce EV Bus, EV Boat, commercial Army Drone, Tank, Huge Ultra Battery Factory. Chinese Auto Car maker s like BYD, Great Wall Motor, EV primuse will set up the factories and produce in Thailand. Japanese Auto Car makers are a bit slow with EV Car Market.

The government not only doesn't support research funding, their authority figure also trying to halt any progress when someone has promising research project. Those project would either freezed due to lack of funding or continue inder other county's name because those researchers moved out of Thailand. Nowadays , it's very common to see top end of thai researchers work overseas for foreign country. Recently, due to lack of vision from the government, many thai middle classes also seek an opportunity to move out of Thailand as well.

I really doubt countries can follow the East Asian model in the 2020's. We are seeing increasing automation, limiting the need and importance of cheap labour, especially for the most valuable industries like semiconductor manufacturing. Even if China ever becomes a so-called "high-income" country, by virtue of their large population there will always be a large enough pool of people willing and able to engage in mass manufacturing. Seeing as China has the best infrastructure, largest expertise, and economies of scale it will continue to be the world's factory unless something big changes (e.g. a West-China decoupling). Also, we are no longer living in the Golden Age of neoliberalism and offshoring that occurred between the 80's - 00's. With the increasing populism and protectionism in developed countries it's going to be harder to secure tech transfers for developing countries. Technology transfers like those of Philips into Taiwan would be a harder sell today. The days when CEOs could brazenly uproot entire industries from developed countries and move them to Mexico or Malaysia to save a couple dollars are waning. I believe most of SE Asia and Latin America will never exit the middle-income trap. In a world without China (or one in which China remained a closed North Korea-like state) other countries could've stepped up and filled that niche, but now that window has permanently closed in the foreseeable future. After experiencing the result of tech transfers, joint-ventures, and other shortsighted business practices most companies will not risk building their future competition in developing countries. It is not worth it. Add to that the fact that these markets are comparatively tiny (with the exception of India), why risk it?

Interesting , Thank You . I did not realize that Thailand built Cars.

CAN YOU MAKE ABOUT MALAYSIAN CARS INDUSTRIES.TQ

Thanks for the video and agree with this analysis about Thailand's inability to upgrade its manufacturing and industry, despite lots of FDI during the 80s through the 2000s. Simply, there hasn't been a sustained effort to promote local RnD, whether basic or applied research. Indeed, the education system is criticized for rote learning, and delivering poor results despite the long hours in class. This problem is known among policy makers for quite some time, but not much progress has been done due to political instability, and lack of vision among the political class. A political campaign which talks about RnD won't win votes, but guaranteeing the price of rice will. Nevertheless, we can always hope that the economic base of our country could be upgraded, if steered in the right direction.

Present Pakistan auto-industry is what Thiland auto industry was in 80's. Low localization, high tariffs, 100% foreign ownership.

How about a video teaching us how you approach research..? They say learning how to learn is a most valuable skill, you seem to have a knack for it. What’s your process?

In Thailand If you try to create something new or improve something to work better / more suitable than what avalible on the market. Then Thai people or Thai boss or policy maker will ask you ' why don't just buy'. Su we keep buying inovation and traped in the middle income.

It will be very hard for Thailand to move up further because they are too reliant with foreign owned Companys. To really grow, you must develop your brand and products. The cost of the labor market is slowly increasing and there are many other countries that can offer cheaper labor than Thailand nowadays. Vietnam, Philippines, Myanmar, Bangladesh, Africa, etc etc have lower wages than Thailand nowadays. Philippines would amongst the top in the list because they have many very skilled labor and they can speak English well. In the next century, i can predict that Thailand automotive sector will suffer tremendously. They must check out their future automotive policies....

Very little is 100% locally made it either relies on imported parts/materials or equipment.

Big risk is that Thailand will miss out on the EV change which will come for sure. All key producers in Thailand today are far behind. GM did leave and many electric pickup trucks are coming. They need a Tesla or LL what has been built up could be gone which would be a disaster! Going green is simply not a government goal and risk is Thailand will loose out. Hope they see the light

But who made all the Tuk Tuks?

Perhaps "many Latin American countries" would provide better precedents for import substitution than "Japan, Taiwan, Korea, and China" as these latter had economic policies geared to increased imports rather than supplying domestic consumption with domestic producers. And perhaps that is a better description of Thailand's ambitions. I always enjoy your work.

It looks like Mexico and Thailand are brothers in pain, both massive automovile export giants, big destinations for direct foreign investment but both failing to create their own first tier companies and escape the middle income trap

Thai automobile industries all belong to foreign investment. When US decided to promote others ASEAN countries, Japanese who owns all facilitate Thai automobile industries commited by stop invest in Thailand and move to target countries that American designated such Vietnam and Indonesia. So it is nothing Thai govt can do in this field.

Taiwan did great, and similarly did Korea, Hong Kong, China and to some extent Singapore in terms of developing their own technological businesses with IP successes. The picture you showed of a former PM (now a fugitive criminal hiding in Dubai) was a former policeman turned monopolistic government mobile phone concession tycoon reaping commissions selling foreign technology and services to Thai people. Knowing little of technology, making simple commissions was a sure win. But after the big profits, he turned to politics to make bigger profits so the country never got any direct investment to develop organic IP businesses. This type of events occurred many times in Thailand so the organic technology sector never made it big in the world arena. It seems Thailand could only do well to supply valuable human capital to foreign companies that setup manufacturing bases in Thailand.

I had no idea Thailand had a military coup last decade!

What's the motive of foreign companies to participate? Thailand now faces competition from other ASEA countries. The technology transfer from west to east has been ongoing too long and we are heading into more protectionism in the west and it's understandable.

(11:27) How can you export MORE cars than they MADE?

GM has sold its factories to SIAC or GWM chinese companies in Thailand !!! Same in India. It looks like US car industry has no future in Asia. ( Ford built a big factory but I think chin will simply beat them at price ).

They export motorbikes as well

Thai baht's value is artificially manipulated (achieving the opposite effect that the Chinese levy on the yuan).

Bangkok is now called Krung Thep Maha Nakhon lol

Intel just bought tower semi please cover this

Can you make a video about why Taiwan's auto industry is so weak?

Meanwhile in Australia. . . Oh, wait. We shut down all of our automobile manufacturing. . . Because of neoliberal ideology and we love flogging off dirt and houses.

Now many car makers have also pulled out of Thailand and moved to Indonesia and Malaysia. Indonesia for the Japanese makes and Malaysia for the European makes.

You should talk about how Intel lost to tsmc

@5:20. Measure what matters is really not good. What percentage of it is just John Doerr saying nice things about the companies he's invested in? It's wild.

Thailand used to have a decent local brand called "Thairung" which was mostly a "coachbuilder" where they would get Thai-made Japanese pickup trucks and turn them into SUVs. This could've been a nice springboard into making their own car even if the engine was still sourced from other brands. However, when the Japanese brands started making their own SUVs based on the pickup trucks, Thairung just gave up. They still exist and still do coachbuilding stuff but nowhere near the scale as 20 years ago. Thairung's latest rebodied pickup trucks now are very ugly and nobody likes them.

You should make an entire video on the Japanese's iron fist control towards their foreign partners, it is not mentioned enough on how much it stunts R&D in foreign countries

It is a great problem to have. The Middle Income Trap is not forever.

Huh it's almost like one better be careful what they wish for.

What happened to the Thai philosophy of 51% must be Thai owned for it's companies ?

Thailand would benefit from a more free market with greater respect for the rights of the individual, but this development is seemingly only used as a last resort. Governments are not capable of divining the correct industries and technologies to invest in, that should be left to the private investors who have skin in the game.

I wonder if the industrial efforts for any country is a local genuine or part of a universal current? Syria as an example is a war region, no minimum genuine industry! Curse or stupidity?!!

Dont focusing on automobile industries if want to be rich and wealthy country. See what Ireland,Swissland, Belgium, Canada, Neitheland doing.

Can you make a video on why China's auto industry is so...weak? in terms of exports

Next.. How Malaysia Failed in Automobile Industry

What happens to their car exports when ICE cars get banned everywhere?

9 billion dollars in the automotive sector is pocket change someone lost in the cushions

True but the Thais made the right choice to partner with JOEMs in the auto industry. You have to learn from the master first and the Japanese make the best cars in terms of reliability and quality

I know that this is about the "Asian" sphere of influence, but I wonder why Mexico never became a legitimate choice for offshore manufacturing?

It's very frustrating living in the US where it's a federal crime to own a foreign built truck unless it's an antique. I would be all over a Thai 1 or 2 ton truck if it wouldn't land me in prison.

really a simple car that runs on gas is good too much tech can be a bad thing

Thailand couldn't keep up with the other countries with the same initial point because STEM isn't its priority

Thailand CBU cars MUCH BETTER build quality & specs than indo CKD.

Individual sewerage cleaning items

Thai will be only the manufacturing hub for automobiles but there will not ever be Thai’s owned car or motorcycle brands.

Still suck that there barely any truly Thai car

I feel bad that Malaysia missed the opportunity because the government wanna protect certain people.

1

Screw driver technologist.

Ban cars

I have a question! Do Thailand allow Lady Boys to build Honda Civics???

Thailand billionaire is afraid invest billions dollar in automobile industry and Thailand can not invest in education..

Money is an issues that everyone has for a better and luxurious life. Life was hard for me Untill I started trading bitcoin and now earning $8,435 per wee

The final suggestion is quite impossible to implement. The current birth rate is low, so human resources are limited. Many graduate studies are lack students which causes the problem in the research.