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https://www.nationthailand.com/business/40015689

Despite a government incentives scheme and the entry of new players offering new electric car models, Thailand’s EV market needs more support to sustain growth and enable widespread adoption of the industry, according to a report. 

ABeam Consulting Thailand, a leading global consulting firm with specialties in digital transformation, highlighted in the report the trends and challenges for the industry in 2022. 

The report said that the adoption rate of EV cars in the country is now accelerating due to better government incentives and new market automakers offering more choices. In 2019, Thailand had only 660 electric cars on the road but in 2021 the number increased to 1,955 and is expected to reach 3,000 this year. 

However, there are more things the government and automotive companies need to do in order the make the country’s market strong and sustainable, the report said. 

The Thai government announced new incentives in February 2022 consisting of a package of import and excise duty cuts and direct subsidies. It aims to not only help increase the EV adoption rate but also commit vehicle manufacturers to begin EV production in the country in the near future. 

With new incentives in place, and with signed agreements with several automakers, the country should begin to bridge the gap with other countries, in particular China and European countries that are further ahead in their journey towards an EV future.

Supreeda Jirawongsri

Supreeda Jirawongsri, principal, Head of Digital Competency at ABeam Consulting (Thailand) Ltd, said although the overall outlook for EV growth in Thailand was very promising, there were currently some global headwinds, including supply bottlenecks and significantly higher than before raw materials costs, that would block the progress of the Thai EV market.

Industry players must take appropriate actions and adjust their strategies and operations so that they can take advantage of new trends and help accelerate the industry transition, Supreeda said.

ABeam has suggested that automakers and suppliers together build intelligent supply chains utilising Internet of Things, big data, AI and blockchain that increase visibility, optimise operations and help prevent potential bottlenecks. Established automakers who still heavily rely on the production of internal combustion engine (ICE) vehicles can adopt flexible manufacturing systems that leverage their existing assets to make the transition to EVs less risky and less costly.

Meanwhile, suppliers, in particular those that currently rely on ICE powertrain parts, need to act fast and prepare the right strategy to pivot to other products and services and develop new partnerships.

Car retailers should play the role of educator to help customers understand the benefits and address any specific concerns. They should also aim to deliver a seamless omnichannel experience and optimise their retail footprint and operations so that they can reduce costs, ABeam said.

Also, EV charging players should investigate what partnerships with automakers, commercial fleet owners or other EV charging players they can develop to increase the number of drivers using their charging stations. Beyond that, there are opportunities to create additional revenue streams by hosting advertisements or collecting commissions from products sold to EV drivers while they charge their vehicles.

Meanwhile, ABeam Consulting has warned that Thailand needs to aggressively prepare to face more fierce competition from Southeast Asia’s neighbours, especially Indonesia and Vietnam, if Thailand still aims to be the hub of EV production in the region. Indonesia is one the major producers of nickel, an essential substance to make EV cars. Vietnam has developed its own homemade EV and has the potential to host EV factories because of their cheap labour.

Earlier this year, the Thai government set the ambitious target to have EVs account for 100 per cent of vehicles sold and 50 per cent of vehicles produced in Thailand by 2035. For a country that averaged about 1 million vehicles in annual sales and 2 million vehicles in annual production before the pandemic, analysts said it was a big task to achieve.

Published : May 18, 2022

By : THE NATION

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https://www.nationthailand.com/business/40015688

The Fuel Fund Executive Committee voted on Wednesday to retain retail diesel oil price at THB32 per litre until May 22, a senior official said.

Kulit Sombatsiri, permanent secretary at the Energy Ministry, said the committee also retained the policy of managing the retail price in the range of THB32 to THB35 for as long as possible.

Kulit said the reduction of diesel excise tax by THB5 per litre for two months would help the committee in its management of the retail price to prevent it rising above THB35 per litre.

On Tuesday, the Cabinet approved a deeper cut in excise tax on diesel from THB3 to THB5 per litre for two more months after the current THB3 cut expires on May 20.

The Finance Ministry has projected that the subsidy would cost the government not more than THB20 billion in projected revenue. The government is using excise cut to try to stabilise the retail price of diesel, so that people would not be affected by the rising cost of transportation, which could inflate manufacturing costs.

Despite repeated protests by truckers, the government had earlier decided to cancel the capping of the retail price at THB30 per litre because its Oil Fuel Fund is bleeding and is almost dry.

Published : May 18, 2022

By : THE NATION

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https://www.nationthailand.com/business/40015659

The Commerce Ministry gave fifty international companies in April the go ahead to conduct business in Thailand under the Foreign Business Act, Deputy Commerce Minister Sinit Lertkrai said on Tuesday.

“These foreign companies have invested more than THB9.9 billion in Thailand and generated up to 592 jobs for local people,” he said. “Most of these firms are from Singapore, Japan and Hong Kong, respectively.

“Allowing more foreign companies to invest in Thailand will help promote knowledge and technology transfer, especially in online trade platform operations, machining centre management, mechanical and electrical engineering, and wireless control of the Optime system using smartphone applications and computers,” Sinit said.

He added that 15 foreign companies have been given approval to invest in the Eastern Economic Corridor (EEC), or 30 per cent of all approved foreign companies in April.

These companies have invested THB2.66 billion in the EEC, or 27 per cent of total foreign investment. Most of the firms are from Japan, the United States and Singapore, while EEC investments have been made in digital services, cloud computing, sensor technology, canned food and beverage packaging, and furniture manufacturing.

The Commerce Ministry expects more foreign companies to apply for investment due to an improving Covid-19 situation and the government easing restrictions on foreign arrivals, which will help restore investor confidence.

Published : May 18, 2022

By : THE NATION

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https://www.nationthailand.com/business/40015656

The baht opened at 34.48 to the US dollar on Wednesday, jumping from Tuesday’s close of 34.52.

The currency is expected to move in a range between 34.40 and 34.80 on Wednesday, predicted Krungthai Bank market strategist Poon Panichpibool.

Poon said the market is in a risk-on state and might cause the baht to fluctuate and weaken amid worries that the US Federal Reserve may move to increase the interest rate.

Besides, the effect of Russian energy sanctions might cause the dollar to advance again.

The strengthening of the baht might be limited to 34.40-34.50 to the dollar, the level importers are waiting for to purchase the greenback.

Poon advised businesses to use hedging tools such as options to manage risks in the highly volatile currency market.

He said the currency market is open to more risks due to hopes that China might ease its lockdown measures on June 1.

Moreover, Chairman Jerome Powell has signalled that the Fed might raise the interest rate again by around 0.5 per cent to tackle inflation, according to market expectations.

Published : May 18, 2022

By : THE NATION

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https://www.nationthailand.com/business/40015649

Thailand and Saudi Arabia agreed on Tuesday to set up a cooperation council to further strengthen bilateral ties.

The two countries also agreed to waive visa requirements for diplomacy and government affairs, while Saudi Arabia will consider helping the 800 Thai nationals whose visa has expired.

Foreign Minister Don Pramudwinai revealed these developments after meeting with his Saudi Arabian counterpart, Prince Faisal bin Farhan Al Saud, in Riyadh on Tuesday.

“Prince Faisal said he will visit Thailand in June to prepare for Crown Prince Mohammad bin Salman’s visit,” Don said.

Prince Faisal bin Farhan Al Saud

Meanwhile, he said, Thailand will appoint its ambassador to Saudi Arabia in the third quarter of this year.

“Saudi Arabia has already started direct flights to Thailand and we believe many Saudis will be travelling to the country,” he said. “Meanwhile, Saudi Arabia is also keen for Thais to visit.”

Don added the aim of this visit was to link up businesses from both countries, so they can make the most of the opportunities available.

“Many businesses were interested in participating in the investment conference hosted by Saudi Arabia’s Investment Ministry,” he said, citing Investment Minister Khalid A Al-Falih’s remark.

Don said he expects this trip to benefit the private sector of both countries, adding that Saudi Arabia needs a lot of Thai workers as it has many investment projects in the pipeline.

“We know that at least 500,000 positions in construction and other related services are available, of which about 200,000 will be allocated to Thais,” he said.

“However, it depends on whether we have enough workers to meet the demand.”

Apart from this, he said, the two countries aim to strengthen their ties in all aspects.

Don led hundreds of representatives from Thailand’s energy, tourism and export sectors on a five-day trip to Saudi Arabia. The May 15-19 trip aims to restore cooperation and investment after nearly a three-decades-long freeze in Thai-Saudi relations.

Riyadh cut trade and diplomatic ties with Bangkok after the so-called Blue Diamond affair, in which the theft of jewels by a Thai worker from a Saudi palace in 1989 was followed by a series of killings of Saudi representatives in Thailand.

Published : May 17, 2022

By : THE NATION

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https://www.nationthailand.com/business/40015648

Though first-quarter GDP growth beat expectations, Thailand’s economy faces uncertainty and needs more government support amid spiralling public debt, the National Economic and Social Development Council (NESDC) warned on Tuesday.

The warning came as the NESDC unveiled first-quarter growth of 2.2 per cent year on year, while offering its overall outlook for 2022. 

GDP growth beat the forecasted 2.1 per cent after easing Covid restrictions sparked a tourism revival and a surge in exports. 

Domestic consumption also accelerated as economic activities began to return to normal. 

However, the ongoing Russia-Ukraine war saw the consumer confidence index drop from 38.9 last quarter to 37.3 as inflation took a toll on Thailand.

NESDC secretary-general Danucha Pichayanan pinpointed several challenges to Thai economic recovery and growth this year. 

Apart from outside factors like the Ukraine war, China slowdown, Covid-19 uncertainty and supply chain disruption, Thailand’s rising private and household debt are key factors of concern, he said. 

The NESDC report said high levels of private debt will hinder recovery while the ability to repay debt would be pressured by rising interest rates along with incomplete recovery in the labour market. Household debt, meanwhile, will place limits on how much people can consume. 

“We need to accelerate the support scheme for the private sector and debt restructuring measures issued by the Bank of Thailand while considering more measures to extend the debt repayment period for households so they have liquidity,” Danucha said.

He said the current situation lacked precedents, so was not easy to improve. To weather the crisis, the NESDC has asked for firm cooperation from all parties. He also urged more government aid for citizens, adding that support schemes should be targeted at the neediest people as national budgets and resources are now limited.

Meanwhile, the public could greatly support the country by spending more on essential goods and services. He also pleaded for Thais to consider domestic travel rather than going abroad. 

On the outlook for this year, the NESDC forecasts the economy will expand in the range of 2.5-3.5 per cent – lower than the previous forecast of 3.5-4.5 per cent. 

Expansion would be driven by domestic demand, domestic tourism recovery, and exports growth. However, high inflation, slowdown in China, and uncertainty over the Russia-Ukraine war would create growth fragile growth.

Exports would remain Thailand’s main economic engine this year, with 7.3 per cent growth forecast. Meanwhile, private consumption and private investment are expected to increase by 3.9 per cent and 3.5 per cent respectively. Public investment is projected to rise by 3.4 per cent. 

Headline inflation is estimated in the range of 4.2-5.2 per cent and the current account is projected to record a deficit of 1.5 per cent of GDP.

Published : May 17, 2022

By : THE NATION

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https://www.nationthailand.com/business/40015646

The Cabinet on Tuesday approved a deeper cut in excise tax on diesel from THB3 to THB5 per litre for two more months, the government spokesman said.

The Cabinet deliberated on the diesel excise cut proposal at its weekly Cabinet meeting, as the current THB3 cut is due to expire on May 20.

Government Spokesman Thanakorn Wangboonkongchana said the Finance Ministry had proposed two options to the Cabinet.

The first option urged the Cabinet to extend the THB3 per litre cut for three more months.

The second option urged the Cabinet to increase the cut to THB5 per litre, but for just two more months.

The Finance Ministry has projected that the subsidy would cost the government not more than THB20 billion in projected revenue. If the government loses more than THB20 billion in excise revenue, it could affect its revenue target, the ministry explained to the Cabinet.

The government is using excise cut to try to stabilise the retail price of diesel, so that people would not be affected by the rising cost of transportation, which could inflate manufacturing costs.

An academic, Praipol Kumsup, welcomed the extension of the excise cut, saying it would mitigate the impact of rising energy prices on the people.

Published : May 17, 2022

By : THE NATION

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https://www.nationthailand.com/business/40015630

The National Economic and Social Development Council (NESDC) on Tuesday lowered its forecast for Thailand’s economic expansion in 2022 to 2.5 to 3.5 per cent from the previous estimate of 3.5 to 4.5 per cent it had made in November 2021.

NESDC secretary-general Danucha Pichayanan said that in the first quarter of 2022, Thailand saw a 2.2 per cent expansion of gross domestic product (GDP), with almost all sectors reporting increased turnover.

The key economic indicators in the first three months of the year are:

• Private consumption expanded 3.9 per cent
• Overall investment expanded 0.8 per cent, with private investment increasing 2.9 per cent, but government investment contracted 4.7 per cent
• Government consumption expanded 4.6 per cent
• Exports expanded 10.2 per cent, with export volume increasing 30.7 per cent year on year
• Agricultural sector expanded 4.1 per cent
• Industrial sector expanded 1.9 per cent
• Construction sector contracted 5.5 per cent

Danucha said that factors that prompted the NESDC to lower GDP estimates for 2022 were the slowdown in expansion of global trade and the rising price of crude oil.

“The conflict between Russia and Ukraine will continue to affect global and Thailand’s economic expansion, especially from the inevitable supply chain impact on energy, fertilisers and wheat that are key factors for the manufacturing sector,” he added.

In November last year, the NESDC had forecast GDP growth of up to 4.5 per cent, riding on increasing domestic demand and manufacturing capacity following the improving Covid-19 situation and increasing vaccination rate, gradual recovery of international tourism following the government’s relaxation of Covid measures, expansion of exports, and disbursement of government budget to various projects.

Published : May 17, 2022

By : THE NATION

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https://www.nationthailand.com/business/40015615

The baht opened at 34.70 to the US dollar on Tuesday following the four-day break, strengthening from Thursday’s close of 34.78.

The currency is expected to move in a range between 34.40 and 34.90 on Tuesday, said Krungthai Bank market strategist Poon Panichpibool.

Poon said the baht could fluctuate, weaken and test the key resistance level of 34.90 if the market remains in a risk-off state.

However, the baht might strengthen if Thailand’s first-quarter GDP is better than forecast, as investors expect the Bank of Thailand to signal monetary tightening in June.

Meanwhile, Poon said the US dollar will be supported by the demand for safe assets if the market remains in a risk-off state. The market might wait for the next US Federal Reserve statement. If the Fed does not signal a heavy interest rate increase, the market may gradually open to risks, he added.

Poon said that volatility was still high in the currency market due to the Ukraine-Russia conflict, China’s Covid-19 situation, and concern about the Fed’s monetary direction.

Poon advised businesses to use hedging tools such as options to manage risks in the highly volatile currency market.

Published : May 17, 2022

By : THE NATION

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https://www.nationthailand.com/business/40015584

The Saudi Arabian Public Investment Fund (PIF) has pledged to use Thailand as a hub for investment in Southeast Asia, the PIF chief said.

The fund’s chief, Yasir bin Othman al-Rumayyan, met Prime Minister Prayut Chan-o-cha at the Royal Thai Air Force Airport in Don Mueang on Sunday morning.

Government spokesman Thanakorn Wangboonkongchana quoted Prayut as telling the PIF chief that relaxed travel restrictions in Thailand will help boost cooperation between the two kingdoms. He also told the fund chief that Thailand was ready to further develop bilateral ties, which are already improving.

Thanakorn quoted the PIF chief as saying that he was meeting Prayut under the instructions of Crown Prince Mohammad bin Salman bin Abdulaziz Al Saud, who is also deputy PM and defence minister of Saudi Arabia.

Yasir said he had been instructed to discuss cooperation between the two countries, especially on trade and investment in energy businesses such as petroleum and gas surveys.

The two sides also discussed e-sports and soft power cooperation, the spokesman said.

The Saudi fund chief also told Prayut that Saudi Arabia hopes to hold bilateral talks with Thailand to build opportunities for trade and investment. He added that Saudi Arabia will also use Thailand as an investment hub for the region.

Thai-Saudi relations had been stalled since 1989 over a scandal dubbed the Blue Diamond Affair, which involved stolen jewels and a string of murders.

Published : May 15, 2022

By : THE NATION