CONCLUSION

In Thailand, efforts by the government to attract foreign investments, as well as her political and policy stability, and growth in domestic demand have made her an attractive automotive production base. It can be argued that the success of Thailand's automotive policy is due to the openness of the country to foreign investors, with minimum state intervention. This has helped to set the first step for Thailand to boost up her automotive industry.

On the other side of the argument, the openness of the industry has made it too dependent on foreign investment. This makes Thailand having to compete fiercely with other countries to attract foreign investors. Also, the lack of local skills and technology has put Thailand in a vulnerable position. Thailand has yet to reach the stage of designing car bodies and producing high-end auto parts and components, due to the lack of skills among the Thai workforce.

Can the Thai auto industry be considered a success? The development of her automotive industry has helped to industrialise the Thai economy through the establishment of the auto part manufacturing industry. Currently, there are over 1,700 automotive part suppliers in Thailand, of which about 700 are OEM suppliers, including the foreign suppliers. The auto industry is employing an estimated workforce of about 200,000 workers. The automotive and auto parts industry generated the country's second highest level of export revenue after computer and electronic parts, representing approximately about 12% of GDP. As shown in Figure 5, vehicle & auto part exports are accounting for a larger and larger share of the economy's total exports, accelerating from a mere 0.5% in 1995 to 6.7% of the total exports in 2005. Obviously, the automotive industry is increasingly becoming a significant revenue earner for the Thai economy.

Figure 5: Vehicle & Auto Parts Exports* as % of Total Exports

On the other hand, from the technological point of view, Thailand still has a long way to go. Local auto players do not possess the necessary skills to design auto parts as well as to produce high-technology parts. Most auto parts suppliers are joint ventures with foreign companies.

In conclusion, whether the Thai auto industry is considered a success depends on which point of view we look at. From the economic point of view, the auto industry has, no doubt, helped to boost the Thai economy, through the creation of the auto part manufacturing industry, as well as bringing in export revenues and creating jobs. On the other hand, if we view the success of an automotive industry from the technological point of view, Thailand's local auto players have yet to be on par with international standards, thus the country still has a long way to go in becoming the "Detroit of Asia".