Thailand has its sights set firmly on a greener, more digitalised future. In a country that produces more cars and commercial vehicles than any other in southeast Asia, according to the International Organization of Motor Vehicle Manufacturers, this vision extends to its automotive sector. In October 2022, the government unveiled its five-year investment strategy in which it identifies new sectors to target and fresh means of attracting investors.
Narit Therdsteerasukdi, secretary general of the Thailand Board of Investment (BOI) explains to fDi why the key tenets of this strategy are non-tax incentives, electric vehicles (EV) and research and development (R&D).
Q: The BOI’s five-year investment strategy is moving towards being a facilitator rather than a promoter. What does that mean and what has changed from the last strategy?
A: Previously we granted tax incentives, but we’ve realised that they aren’t enough to attract future investment — especially in targeted areas such as innovation and technology-based investment. We also realised that one of the most important factors to attract target investors is the ease of doing business.
We need to make investment in Thailand easier and that’s why we will focus on our new role as a facilitator, by providing a one-stop service to the companies that would like to set up their regional headquarters (HQs) in Thailand.
Q: There’s been a notable increase in local EV investments. What is Thailand’s value proposition to international investors?
A: We have received many big projects from big investors in the EV industry, such as the $1bn joint venture announced last year between Foxconn and PTT to build an EV factory.
Thailand already leads Association of Southeast Asian Nations (Asean) countries in the automotive industry and our government has a strong intention to become the region’s EV hub. The Thai government has announced an aggressive target of ‘30 at 30’, meaning that by 2030 EVs will comprise at least 30% of total car production in Thailand.
Apart from demand stimulation measures to promote EV ownership, we also have a supply chain of more than 2000 tier one to tier three auto suppliers, 60% of which can be part of the EV supply chain in the future.
Q: In a world where globalisation is splintering, do the US–China tensions concern you?
A: Chinese investment in Thailand has increased tremendously in the past 10 years. In terms of policy, we welcome investors from all over the world and treat everyone the same. Under the new strategy, we would like to attract not only manufacturers, but also R&D investments. Toyota and Honda, for example, already have regional R&D HQs here. I believe that Thailand has the capability to be an R&D centre for all companies — not only Japanese, but also Chinese and European.
Q: The coming year presents all sorts of challenges, from inflation to recession. Does the change in global investor sentiment affect Thailand’s ambitions?
A: We are quite optimistic this year, even though the global economy is predicted to enter a recession. But when we look at our target industries, like EVs, we are quite confident that there will be more players coming to invest over the next two or three years in components, charging infrastructure and the carmakers themselves.
The electronic industry is another promising sector and Amazon’s cloud computing subsidiary AWS recently announced it would invest more than $5bn in Thailand over the next 15 years. I believe more players will come to Thailand to invest in data centres and cloud services, too.
Narit Therdsteerasukdi is the secretary general of the Thailand Board of Investment. This interview has been edited for clarity and brevity.