Thailand's Automotive Manufacturing Corridor

35 Pages Posted: 7 Jun 2018

See all articles by Peter G. Warr

Peter G. Warr

Australian National University (ANU) - Crawford School of Public Policy

Archanun Kohpaiboon

Thammasat University

Date Written: December 2017

Abstract

Thailand’s export-oriented automotive industry is a recognized economic success story. How did it happen and what lessons might other countries draw? This paper argues that the success of the industry was based on three factors. First was the substantial public investment in port facilities and related infrastructure, beginning in the 1990s, that constituted the Eastern Seaboard economic corridor. Second was the exchange rate depreciation that followed the 1997–1999 Asian Financial Crisis, making manufacturing production for export more profitable. The third factor was two key policy changes adopted by the Thai government shortly after the crisis, and partly in response to it: (a) abolition of restrictions on foreign ownership and (b) abolition of local content requirements. Neighboring countries, including Malaysia, Indonesia, and the Philippines, also experienced the crisis and were potential competitors in attracting foreign investment in automotive production for export. But they did not adopt these two key reforms.

Keywords: automotive exports, Eastern Seaboard scheme, final assembly, parts and components, Thailand

JEL Classification: F14, L62, O18, O24

Suggested Citation

Warr, Peter G. and Kohpaiboon, Archanun, Thailand's Automotive Manufacturing Corridor (December 2017). ADBI Working Paper 519, Available at SSRN: https://ssrn.com/abstract=3187786 or http://dx.doi.org/10.2139/ssrn.3187786

Peter G. Warr (Contact Author)

Australian National University (ANU) - Crawford School of Public Policy ( email )

ANU College of Asia and the Pacific
J.G. Crawford Building, #132, Lennox Crossing
Canberra, Australian Capital Territory 0200
Australia

Archanun Kohpaiboon

Thammasat University ( email )

Faculty of Political Science, Prachan Road
Bangkok, 10200
Thailand

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
37
Abstract Views
384
PlumX Metrics