Global Automotive Industry
The notion of car culture has been spread globally in the last few decades. Like many other luxury goods as well as necessity items, cars have become a part of the same category contributing a lot to the global budget and also shaping the lives of billions of people. The automotive industry along with the related industries, on a global basis, gives employment to millions of people improving their standard of living.
In countries like, USA, Japan, and the UK, millions of people are directly or indirectly involved with this industry. However, the automotive industry is defined as a sector which includes all those organizations that specialize in designing, developing, producing, promotion and selling of auto-motor vehicles. In the current market scenario, it is considered to be one of the richest sectors contributing a lot to the world economy.
The automotive industry has been able to double its sales over the past decades with rapid acceleration. The future development of the industry is definite on a good road for achieving immense success. There have been significant changes in the recent years concerning the trend and the functionality of the cars.
Eminent industrialists who were the founder of the automotive industries would have remained shocked if they were surfaced to the changing system of manufacturing. In the year, 2007, the profit in the global market was to be 30%, which, in the year 2012 changed to 60% of the profit. This rise in the profit margin was due to the increase in the sales of the car to a drastic level.
Buying cars have become something more than just economic prosperity. With new registrations, the sales of the cars began to rise, creating a profitable international automotive market. Most of the economies are praised by the automotive sector operating in their market. On a total, economy profits hugely from the different contributions from this sector.
However, along with a contribution to the global economy, the organizations in this sector has also put a step forward with a cohesive attitude of the cleaner environment through decreased carbon emissions. The manufacturers are trying their best with their skills to develop efficient engines to reduce the consumption of the fuels. With the help of such cleaner technologies, improvement in the quality of the air can be seen.
As considered by the economists, the automotive industry stands sixth in contributing to the global economy. In the past few decades, the shape of the automotive industry has changed to a great extent with numerous entries through the production of cars, trucks, vans and buses. The contribution is not only in terms of money but also in terms of employment to the millions of people.
Automotive sector in Thailand
The economy of Thailand has been receiving acceleration with the available infrastructure. Out of them, the automotive industry has been contributing the most with its strong resources. The huge network comprising of big and small as well as local plus foreign organizations create an efficient value chain system. Asia has become one of the most popular automotive hubs operating in the global market.
Thailand as a hub in the ASEAN countries strives hard towards achieving a successful green production area. According to reports, a percentage of 12% of the Thailand’s income is received from the automotive industry. Moreover, it employs a large number of people making them economically contributable to the national income of Thailand.
With the available infrastructure and resources, the hub has been able to attract most of the vehicle manufacturers and auto parts producers to do lucrative business in the market. According to the reports of ASEAN, almost 1.9 million cars were produced out of which 0.8 million units were sold in the domestic market. 12 million cars were exported to the other parts of the world.
Out of the total sales in the national market and exported to the international market, there were passenger cars as well as commercial vehicles. There is also a great demand for the motorcycle market where 18 million units were produced out of which 16 million units were sold within the domestic market. Only 0.35 million units were exported to the international market.
The government of Thailand tried hard to attract potential investors so that they could build the desired market of the automotive industry. The government of Thailand is in the process to turn the supply chain of the automotive industry towards a more valuable creation. The intention is to make the land a base for production of environment safe vehicles in accordance with the international as well as the national market.
Thailand in the present time is the best sorted out the place for the investors of the automotive sectors to invest in. with the significant infrastructure and human capital, the sector is booming with lucrative profits. The support of the government is making the sector stronger to compete in the international market.
The present scenario of developing the nation as one of the best automotive hubs is an earnest try by the government. They have always been in a process of giving help in terms of incentives to the lesser manufacturers so that they could compete with the international level market and organizations. However, in the present time, the nation is in a try to manufacture efficient engines for green society.
Contribution of the automotive industry to the Thai Economy
The automotive sector in Thailand is one of the fast growing sectors which have contributed much to the development of the national economy. Vehicles have become a part of the lives of people for commercial as well as personal use. Hence, the organizations that belong to the sector has gained much and adding to the national profit of the nation of Thailand.
With the help of the automotive sector, Thailand has become one of the second largest industries for export. This helps the economy to collect a huge amount of foreign money in their account. This adds to the profitability that is enjoyed by the economy of the country from time to time.
The automotive sector has also contributed a lot to the economy by providing employment to the numerous people and improving the national standard as well as the standard of the people living in the country. More than 0.5 million of the population are involved with the sector directly or indirectly. They either participate in the direct production of the automotive or are indirectly working with the auto parts organizations.
The automotive industry has brought in a lot of development in Thailand apart from the economic one. In spite of badly hit by the depression, the automotive sector recovered from the loss that they had incurred and took the economy of the nation to a different level. With their strategies and policies, they emerged victorious even in the unfavorable situation.
This automotive industry is one of the best industries which have been able to bring in foreign investment. Other than the organizations that are based on foreign investment, there are certain local organizations which have also helped in building the economy of the nation. Auto parts industries sprouted up in the midst of all to support the foreign organizations to function at very low cost.
Most of the reputed automotive brands operate in Thailand as they easily get the spare parts at very low cost. This enables them to sell the car at a very reasonable price. Most of the organizations that function in the land also support research work along with designing and engineering to support their expansion plan.
The automotive organizations also pay a good amount of tax to the local as well as the national government and this is a huge income for the economy of Thailand. Since it employs a huge number of people, the availability of money in their hands also increases. In return, the individuals pay taxes to the government. The government body is being able to collect a good amount of revenue and invest on the smaller operating automotive industries so that they can compete with the international ones.
The automotive sector of Thailand helped the economy to boost itself even when there was a depression in the international market. This affected very less as the sector had a strong infrastructure to protect their profitability.
Investment in the Thai market
In the recent past, the economy of Thailand has shown impressive progress in spite of all the ups and downs faced by the market. The super combination of a healthy economy and growth makes the future investors invest in the Thailand market without any further thinking. The fertile automotive market of Thailand is the perfect ground for investing in the same sector.
The automotive industry in Thailand is progressive and is the second largest export after the computer parts. The investors find it impressive since they receive the support of the government all the time. the role of government is attracting foreign investors is very crucial and can achieve great results affecting the economy.
Other than the support of the government, there is cheap labor available in the nation for the industries. People from the nearby areas have an access to the land and come in search of jobs. Moreover, the country has been experiencing the production of automotive since last decades. Hence, with proper training a very cheap labor can be available by the organizations. This would enable the investors to obtain an advantage over the market so that they can produce the vehicles at very low cost.
Moreover, investing in the automotive sectors of the market is advantageous because most of the auto parts manufacturers of the world have their factories located in the market of Thailand. The this would enable them to get the parts at a very inexpensive rate and this would directly help them to lower their cost of production. The transport cost os also very low. This all contribute to a successful and less expensive method of production.
With lowering the cost of the vehicles, it would be more available to the people with low budget. The increase in the sales of the products would help them to collect more revenue increasing the profit. There are numerous reasons why investors usually invest in the automotive market of Thailand in spite of stiff competition from the other parts of the globe.
With all the favorable conditions that are prevailing in the market, investors find it profitable to invest in the Thai market. These factors would help the investors to research their plans properly and develop similar plans which would help them to develop efficient engines so that they achieve the target of going green on the roads.
The support of the Thailand government is the most effective one in the whole affair of investing for the automotive market. Production of the vehicles causing less harm to the environment is given tax concessions and all types of support from the government itself.
Hence, it becomes profitable for the investors who invest for earning high returns and excellent position in the international market. They can plan their proceedings in the land and give their investment their desired turn. The government supports all types of investment and assists them in achieving their target. This directly helps the economic development of the nation and the market.
How Automotive Industry contributes to Thailand and how Consultants can help you grow
Finding a proper business consultant is the best thing you could do to your business. A business consultant can help you in several ways such as:
- Offer a renewed, educated and independent perspective for your business – The most beneficial person here will be your business consultant: who would tell bitter truth, helping you find the correct vision faster. With their own negative experience in the past, they allow you to notice as and when things are not going as planned early enough that would prove valuable to you.
- Estimation of a realistic budget for launching and building your product – You would be totally surprised to know how different the real cost of the project could be from that which you have imagined. Business Consultants are aware of the definite cost of various inputs which your startup requires and you can give your budgeting job to your consultants without any reluctance.
- Cut the needless features from your product – Proper business consultants would offer an educated view over your business model and will advise you regarding what amount would be sufficient functionally.
- Discovering the right personnel for your team and setting up your management framework – With the help of a proper business consultant your business will benefit from their experience of picking right talent for your business. The business consultant would help you with all your staffing needs. They will place right man in right place so that you achieve the best out of your team.
- Associate you with handy people– Your business consultant would have far-reaching connections much far broader than you could think. Leverage on it! Request them for introducing you to such acquaintances and make the most of their present network for reaching the people you believe might be advantageous to your business.
The investors need right consultants who can do a detail investigation of the place and find whether the place is suitable for the investment. The investors have their own consultants who visit the land and identify the faults there and try to assess whether their investment would yield them excellent results. Thailand is one of the developing places in industries related to the automotive sector. The consultants can get to the place and make a report of the trends and the position of the market so that the organizations can get the best out of the market when they invest in it.
The automotive sector also brings an overall investment to the nation. They investment in developing the facilities would help them directly or indirectly in developing their plans. They held research with the help of the consultants who deal with the market condition. They also invest in the local systems so that it becomes easier for them to get the support of the government. They also organize a training session for the local employees so that they can get the best out of the people.
Overall, the automotive sector brings development in the nation thoroughly. The consultants, here play a great role as they handle the client base. They make an analysis of the advantages and disadvantages of the market and the available infrastructure and resources available. This helps the organization investing in the Thai market. Though the market is proven fruitful over time, yet there are chances of problems arising in the middle. Hence, there should be a thorough market analysis so that the investors can get the full advantage of the resources of the Thai market.
A lot of reports have been published regarding the influence of the automotive industry over the Thailand Economy and the market. It is the responsibility of every organization to study the market well before entering it.