Thailand's Auto Parts Industry Shows Signs of Recovery Amid Pickup Truck and Hybrid Vehicle Boom.

Thailand's auto parts industry is reviving after a severe slump in 2023, driven by strong sales campaigns for pickup trucks and hybrid vehicles. The industry's revival has brought back overtime work and subcontracting, though over 10 companies were forced to close last year. The sector's recovery is expected to continue, with forecasts suggesting Thailand's total car production will reach 1.45 million units this year.

Thailand's auto parts industry is staging a remarkable recovery from its lowest point in 2023, driven by robust sales of pickup trucks and hybrid vehicles. The revival has led to a return of overtime work and subcontracting in factories, although over 10 companies were forced to close last year due to poor management and economic pressure [1].

Suphot Sukphisarn, chair of the Federation of Thai Industries (FTI)'s Autoparts Group, indicated that the industry began showing signs of recovery in the second quarter of 2025. The sector faced significant challenges in 2023, including high household debt following the pandemic, stricter financing rules, reduced vehicle sales, particularly for pickup trucks, and the ongoing transition to electric vehicles (EVs) dominated by Chinese carmakers [1].

The transition to EVs forced many firms to adjust drastically, leading to a sharp decline in vehicle production and sales, dragging the parts industry down by around 30%. Over 10 parts manufacturers had to shut down [1]. Rising labor costs, from 300 baht to 400 baht daily wages, with a policy target of 600 baht, further pressured Japanese carmakers to consider relocating production to cheaper destinations [1].

Since May-June this year, the industry has seen clear positive signals. Production has rebounded thanks to two main drivers: the pickup truck sales revival and the boom in hybrid vehicle sales. Car manufacturers launched new models and aggressively slashed prices to compete with Chinese rivals. For instance, Toyota cut prices from around 600,000 baht to 400,000 baht for its pickup trucks [1].

Hybrid vehicle sales have also exceeded expectations, with both Toyota and Honda seeing strong consumer acceptance. Toyota is preparing to launch a 1,300cc hybrid engine to complement its existing 1,800cc and 1,500cc models [1]. These trends have encouraged auto parts makers to restore overtime shifts and rehire subcontractors.

While the industry is still recovering from its lowest point, forecasts suggest Thailand's total car production will reach 1.45 million units this year—slightly below last year’s 1.47 million but still a positive sign of an upward trend [1]. Additionally, new industries such as rail transport and medical equipment are expected to strengthen the auto parts sector, contributing 3–5% of total revenue [1].

References:
[1] https://www.nationthailand.com/business/automobile/40054773
[2] https://japannews.yomiuri.co.jp/business/companies/20250901-278353/