Thailand Woos Oz Suppliers as OEMs Quit Production

Australian auto-parts makers are moving to Thailand with the Australian-Thai Chamber of Commerce (Austcham) helping the small- and medium-sized enterprises enter the local supply chain.

Austcham President Leigh Scott-Kemmis says with Ford, General Motors and Toyota ending manufacturing in Australia by 2017, parts makers there are looking to Thailand.

“There are significant aftermarkets in Australia for supply, parts manufacture (and) components manufacture for the auto sector and a lot of those will now look to come to Thailand, and in the last year some 12 or more companies have,” Scott-Kemmis tells The Nation newspaper.

He says the political uncertainty in Thailand since the beginning of the year – and the subsequent military coup in May – has not hurt the country's manufacturing, supply chain or export sector.

The Thai Board of Investment had done an outstanding job in providing assistance and facilitating foreign businesses in Thailand, Scott-Kemmis says, but there are areas for improvement, including work-permit and customs issues and infrastructure.

However, he says most of these problems have existed for 20 years and commonly are faced by local and foreign investors alike. There is no real roadblock to investment in Thailand and most of the minor obstacles that people believed exist are the result of lack of awareness and access to information.

Scott-Kemmis says Austcham members have not complained about the political situation in Thailand. “Everyone is just getting on with things as normal,” he says.

The chamber president praises the coup leaders’ National Council for Peace and Order for its effort to return the rule of law in the country.

“The things that the NCPO has done that are tangible, and are encouraging to me, is the push to enforce the law, because there is no question that over a number of years the rule of law in Thailand has been dropping and dropping, especially on the street level,” he says.

Rule of law is the most important thing for investment and trade confidence, he says, because if people do not trust the system and believe laws will be enforced, they will lose confidence in the country’s investment and trade environment.

“The big test is whether it will continue in the future,” Scott-Kemmis says. “But if it does, it will be one of the most encouraging factors for foreign investors to do business here in Thailand.”