Updated Information on Trade and Investment Opportunities in Thailand:

Automotive Industry Part 1

Ms.Bussarakum SriratanaDirector

Thailand Board of Investment, Frankfurt Office

Thai Economy Overview

Thailand’s Global Economic Ranking

Source: The Economist’s Pocket World in Figures, 2008

18th largest Tourist Receipts

19th largest Economy by Purchasing Power

20th largest Manufacturing Output

25th biggest Trader of Goods

27th largest Industrial Output

30th biggest Exporter as % of World Exports

35th largest Service Output

36th largest Economy

Thailand Economy at a GlancePopulation (2007) 65 million

ASEAN Population 570 million

Literacy Rate 95%

Minimum Wage (1 Jun. 08, Bangkok) EUR 4.06

GDP (2007) EUR 162 billion

GDP per Capita (2007) EUR 2,455

GDP Growth (2007) 4.8%

GDP Growth (2008)* 4.5-5.5%

Export Growth (2007) 18.10%

Corporate Income Tax 10-30%

Withholding Tax 10-15%

Value Added Tax 7%

* EstimatedUSD 1 = THB 33EUR 1 = THB 50

Top 15 Exports Item 2004 2005 2006 2007 2008 (Jan-Jul)

Computer and accessories 7,377 9,489 11,316 11,919 6,922

Motor cars, parts and accessoriesMotor cars, parts and accessories 4,4164,416 6,2066,206 7,2477,247 8,3038,303 5,2025,202

Refine fuels 1,421 1,900 2,776 2,814 3,305

Precious stones and jewelry 2,126 2,587 2,797 3,703 2,937

Rice 2,167 1,860 1,964 2,384 2,642

Rubber 2,749 2,974 4,110 3,887 2,629

Electronic integrated circuits 3,929 4,769 5,352 5,559 2,532

Polymers of ethylene, propylene, etc 2,496 3,358 3,428 3,590 2,276

Iron and steel and their products 1,992 2,310 2,681 3,153 1,954

Rubber products 1,560 1,882 2,345 2,518 1,712

Chemicals 1,657 2,115 2,610 2,701 1,668

Machinery and accessories 1,342 1,690 2,017 2,978 1,606

Airconditioner and accessories 1,599 1,747 1,749 2,205 1,484

Frozen and preserved seafoods 1,814 2,006 2,261 2,180 1,368

Electronic equipment and accessories 1,478 1,766 1,910 2,527 1,234

Source: Ministry of Commerce

Unit: M.Euro (Euro 1 = Baht 50)

Top 20 Export MarketsNo.   2005 2006 2007 2007 2008

(Jan.-Jul.) (Jan.-Jul.)

1 U.S.A. 13,606 14,814 13,240 7,533 7,544

2 JAPAN 12,058 12,479 12,404 7,091 7,513

3 CHINA 7,348 8,920 10,205 5,430 6,469

4 MALAYSIA 4,658 5,039 5,371 3,026 3,946

5 SINGAPORE 6,161 6,372 6,557 3,228 3,894

6 HONG KONG 4,941 5,457 5,908 2,999 3,882

7 AUSTRALIA 2,542 3,305 3,947 2,161 2,867

8 INDONESIA 3,179 2,524 3,274 1,839 2,453

9 VIETNAM 1,896 2,338 2,614 1,330 2,047

10 NETHERLANDS 2,220 2,463 2,619 1,465 1,565

11 UNITED KINGDOM 2,242 2,588 2,449 1,396 1,391

12 PHILIPPINES 1,646 1,956 1,998 1,119 1,350

13 S. KOREA 1,812 2,032 2,044 1,138 1,264

14 INDIA 1,222 1,374 1,834 1,044 1,210

1515 GERMANYGERMANY 1,6061,606 1,7721,772 1,9801,980 1,0961,096 1,1591,159

16 TAIWAN 2,177 2,562 2,295 1,454 1,103

17 U. ARAB EMIRATES 942 1,121 1,517 793 989

18 CAMBODIA 736 940 934 515 829

19 ITALY 997 1,136 1,273 783 794

20 FRANCE 1,038 1,085 1,137 647 706

Source: Ministry of Commerce

Unit: M.Euro (Euro 1 = Baht 50)

1 China 1111 ThailandThailand2 India 12 France

3 United States 13 Malaysia

4 Russian Federation 14 Indonesia

5 Brazil 15 Singapore

6 Vietnam 16 Italy

7 United Kingdom 17 Ukraine

8 Australia 18 Japan

9 Mexico 19 Canada

10 Poland and Germany 20 Republic of Korea

Source: UNCTAD World investment Prospects Survey, 2007-2009

Most Attractive Economies for the Location of FDI 2007-2009

WORLD BANKEase of doing business 2009

1 Singapore 12 Japan

2 New Zealand 1313 THAILANDTHAILAND3 United States 20 Malaysia

4 Hong Kong 23 Korea

5 Denmark 61 Taiwan

6 UK 83 China

7 Ireland 92 Vietnam

8 Canada 129 Indonesia

9 Australia 140 Philippines

10 Norway 165 Laos PDR

Source: World Bank, as of Sept 2008

Medium-Term (next 3 years)Rank Country1 China2 India3 Vietnam

44 ThailandThailand5 U.S.6 Russia7 Korea8 Indonesia9 Brazil10 TaiwanIncludes production, sales, R&D, outsourced operations

Long-Term (next 10 years)Rank Country1 China2 India3 Russia4 Vietnam5 U.S.

66 ThailandThailand7 Brazil8 Indonesia9 Korea10 MalaysiaIncludes production, sales, R&D, outsourced operations

Source: JBIC FY 2006 Survey: Outlook for Japanese FDI (18th Annual Survey)

Promising Countries for Overseas Business Operations

1 United States 11 Korea

2 Switzerland 12 Hong Kong

3 Denmark 14 Taiwan

4 Sweden 21 Malaysia

5 Germany 2828 ThailandThailand6 Finland 34 China

7 Singapore 48 India

8 Japan 54 Indonesia

9 United Kingdom 68 Vietnam

10 Netherlands 71 Philippines

Source: World Economic Forum, October 2007

Global Competitiveness Index 2007-2008

238

33

55

1531

118102

2410

22

86

1012

50

50

50

100

150

200

250

All Industries E&E Automobile

Thailand Vietnam Indonesia Malaysia Philippines

Source: JBIC 18th Annual Survey Report on Overseas Operations by Japanese Manufacturing Companies

Number of Surveyed Companies Looking to Strengthen or Expand in ASEAN-4

The Automotive Environment in Thailand

• Auto sector 12% of GDP

• Largest auto producer in Southeast Asia

• World’s 2nd largest producer and market of pickup trucks.

• 16 assemblers with production of 1.3 mil. units in 2007: 36% exports

• Strong Supporting Industry

~ 1,800 suppliers of Tier 1, 2 ,3

• High Local content : 80-90% for pick up and 30-70% for passenger car

AutomotivesTarget: Top 10 auto producer by 2010, producing 1,800,000 units

Economic Growth and Car ConsumptionRank

Country GDP

Growth (%)

GDP per

Capita

(US$)

Population

(M. Perso

ns)

Persons per Car

Domestic

Demand

(Units/yr)

1 USA 5.0

36,200 278 2.1 17,44

0,000

2 Japan 1.3 24,900 126 2.5 5,940,

000

3 Germany

3.0

23,400

83 1.9 3,620,

000

4United Kingdom

3.0

22,800

59 2.2 2.810,

000

5 France 3.1 24,400

59 2.2 2,550,

000

6 Italy 2.7 22,100

57 1.8 2,480,

000

7 Canada 4.3 24,800

31 2.2 1,630,

000

8 Korea 9.0

16,100

47 4.0 1,130,

000

9 Thailand 4.5

2,800

62

10.0

700,0

00

10 Belgium 4.1 25,3

00

10 2.2

550,000

World Automobile Demand 2005 & ASEAN’s Free Trade NetworkWorld Automobile Demand 2005 & ASEAN’s Free Trade NetworkWorld Automobile Demand 2005 & ASEAN’s Free Trade NetworkWorld Automobile Demand 2005 & ASEAN’s Free Trade Network

Europe21.0 M.VehiclesNorth America

20.0 M.Vehicles

Total 66.0 Million Vehicles In 2005

Source: Japan Automobile Manufacturers Associationhttp://www.jama-english.jp/asia/publications/voice/20060828.pdf

Projection 2010: - China 9.0 Millions - India 1.9 Millions - ASEAN 2.6 Millions

China 5.8

S.Korea1.2

India1.5

Japan 5.9

Austria & New Zealand

1.1

ASEAN2.1

ASEAN &Free Trade

Network17.6 M.Vehicles

Unit: Million Vehicles

Thailand : The Automotive Hub of Asia

ChinaPopulation 1,285 million

Production 2005: 5.7 millionDom. Sales 2005: 5.7 million

Biggest Share: Passenger Car

ThailandPopulation 64 million

Production 2005: 1.1 millionDom. Sales 2005: 0.7 millionBiggest Share: Commercial

Vehicle (1-ton Pick up)

KoreaPopulation 47.6 million

Production 2005: 2.5 millionDom. Sales 2005: 1. 1 million

Biggest Share: Passenger Car

JapanPopulation 127.1 million

Production 2005: 10.7 millionDom. Sales 2005: 5.9 million

Biggest Share: Small & Compact Passenger Car

India Population 914 million

Production 2005: 1.6 millionDom. Sales 2005: 1.4 million

Biggest Share: Passenger Car

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.002005 2008 2010

Million Units

Asia-Pacific Vehicle Production Capacity 2005-2010Asia-Pacific Vehicle Production Capacity 2005-2010

Production in 4 ASEAN

457,000

577,547

441,678

1,287,346

1,188,0441,125,316

927,681

742,062

584,954

459,418412,207

327,233

158,130

360,303

559,428

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Source: Japan Automobile Manufacturers Associationhttp://www.jama-english.jp/asia/asean/1996-2007_Production.pdf

Thailand

Indonesia

Malaysia

Philippines

Un

its

Sales in 5 ASEAN

363,156

144,065

533,176

625,978

433,341

487,176

117,903

119,963

589,126

262,189293,231

409,362

703,432 682,161

631,251

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Thailand

Indonesia

Malaysia

Philippines

Singapore

Source: Japan Automobile Manufacturers Associationhttp://www.jama-english.jp/asia/asean/1996-2007_Sales.pdf

Un

its

Thai Automotive Industry Growth

838,847

327,233411,721

459,418

1,287,6491,188,044

928,081

750,512

158,130

389,100

559,428

525,680434,001

584,951

1,125,316

365,055218,330

631,251

682,161626,026

533,176

296,985262,189

363,156

589,126485,678

409,362

144,065

571,580

703,405

456,614

690,100

538,962

322,053

239,440175,293152,836130,00066,70014,0008,800

21,300 180,55442,200

440,715

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1995 1996 1997 1998 1999 2542 2000 2001 2002 2003 2004 2005 2006 2007 2008(Jan-Jul)

Production Sale Export

Source: Thailand Automotive InstituteSource: Thailand Automotive Institutehttp://www.thaiauto.or.th/Records/eng/records_menu_eng.asphttp://www.thaiauto.or.th/Records/eng/records_menu_eng.asp

Year 2007 Production = 1,287,649 Units +8.4%Domestics Sale = 631,251 Units -7.5%

Export = 690,100 Units +28.2%Units

Production

Domestic Sale

Export

Passenger Cars 1-Ton TrucksTruck

TotalToyota Motor 200,000 350,000 - 550,000Mitsubishi 50,000 150,000 6,000 206,000Isuzu Motors - 200,000 20,000 220,000General Motor 40,000 120,000 - 160,000Auto Alliance - 155,000 - 155,000Nissan 36,000 98,400 5,000 139,400Honda 120,000 - - 120,000Hino Motors - - 28,800 28,800Thonburi 16,300 - - 16,300Yontrakij 12,000 - - 12,000BMW 10,000 - - 10,000Thai Swedish Assembly (Volvo) 10,000 - - 10,000Total 494,300 1,073,400 59,800 1,627,500Source: Thai Automotive Institute

Production Capacity in 2007

Company Domestic Export Total Prod.

Toyota 263,968 237,774 501,742

Mitsubishi 21,222 146,252 167,474

Isuzu 102,747 61,048 163,795

Honda 61,226 80,096 141,322

Ford & Mazda 19,693 115,333 135,026

General Motors 71,245 27,180 98,425

Nissan 41,459 22,064 63,523

Mercedes Benz 2,037 2,037

BMW 1,505 299 1,804

Volvo 610 54 664

Other 11,837 11,837

Total Production 597,549 690,100 1,287,649

Source: Thai Automotive Institute

Production in 2007

2006 2007 % Change

Export - Automobile - Motorcycle - Auto Part

51451,120

24878

730. 1015,390

25557,000.

573,277.252 69,085.88 7 ,607.42296,583.95

11.868.56

-24.6816.52

Import - Automobile - Motorcycle - Auto Part

22256

040.19353, .70

21327, .0

20107,400.

231,476.4322,740.882,266.57

206,468.99

3.3316.256.162.05

Export > Import 29195,08.

341,800.8 18.49

Thai Automotive Industry Import & Export 2006-2007Thai Automotive Industry Import & Export 2006-2007

Million Baht

Source: Thai Automotive Institute

116,938

133,345

55,671

100,752

0 00

57,45641,059

9,3712,651

66,85777,710

6,0161,000

15,342

54 00 4,478

1,400

139,361

183,849

134,111

10,711

62,934

100,752

58,322

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

Asia Oceania Middle East Africa Europe Central&SouthAmerica

Others

1 Ton P/U Passenger Car SUV Truck Total

Export Markets in 2007

Type of CBU Export 1 ton P/U = 514,592 units P Car = 154,234 units SUV = 26,544 units Truck = 0 units Total = 690,100 units

2010 Target – World’s Top 10 Total production of 2 million units Domestic sales of 1 million units

– 1-ton trucks – 700,000 units– Passenger cars – 250,000 units– Commercial Veh. – 50,000 units

Exports of 1 million units– 1-ton trucks – 800,000 units– Passenger cars – 200,000 units

THAITHAILANDLAND OF INVESTMENTOF INVESTMENT

The perfect opportunity

Thailand—Each Piece Fits Perfectly.

www. boi.go.th