THAILAND REPORT
Suzuki says it will withdraw from four-wheel vehicle production in Thailand. Production at the local subsidiary will cease by the end of 2025, and vehicles made at the main plant in India will be exported to Thailand for sale. Thailand has long been a stronghold of Japanese automakers, but Chinese automakers have gone on the offensive with low-cost EVs, and with Subaru’s decision to pull out, the plight of Japanese automakers is becoming more apparent.
Suzuki Motor Thailand (SMT), a local subsidiary, will cease production by the end of 2025, and SMT will focus on sales and customer service in Thailand. Thai Suzuki Motor, which produces motorcycles and outboard engines, will continue operations.
Suzuki began local production of four-wheel vehicles in Thailand in 2012. It invested about 20 billion yen to build the plant. The company produced three models, mainly the Swift compact car, and exported them to Japan and to the Association of Southeast Asian Nations (ASEAN). However, Suzuki was a latecomer to Thailand compared to other Japanese automakers and struggled with local sales. Suzuki has not been able to launch EVs globally, and it appears that the company has determined that it will be difficult to regain market share in Thailand, where the shift to EVs is proceeding rapidly. The company will concentrate its management resources in India, which accounts for nearly 60% of its global sales, to increase its market share.
Source: The Nikkei
PSR Analysis: I have said many times in the past that electrification in Southeast Asia could be a headwind for Japanese manufacturers with large market shares, and this has proven to be the case. Subaru has also admitted that it will close its CKD plant in Thailand. China is expanding into Southeast Asia at a very fast pace, and its speed of action, including development, is extremely fast. The cost competitiveness of Chinese products is so great that Japanese manufacturers are facing a very difficult time in terms of pricing.
However, just as the EV trend in Europe and the U.S. is being reconsidered, if a similar trend emerges in Southeast Asia in the future, there is still a possibility that Japanese manufacturers, who have lagged in EV development and sales, may be able to make a comeback. The market is very fluid, and it is becoming increasingly difficult to forecast when and how things will change. PSR
Akihiro Komuro is Research Analyst, Far East and Southeast Asia, for Power Systems Research
