Car parts makers face electric vehicle woe
Subcon members urged to diversify
Thai auto parts producers should diversify into other products to survive in the new era of electric vehicles (EVs) as conventional auto parts will be useless for modern EV specs, says the Thai Subcontracting Promotion Association (Subcon).
Chanatip Surachaisittikul, president of Subcon, which groups Thai auto parts makers, said some products in other segments can be produced from the same raw materials used in the auto parts business. One segment with strong potential is medical equipment because the government has a clear policy to push Thailand to be a medical hub in Asean.
“We have told our members to gradually diversify into producing other items that can serve demand in the medical sector, such as wheelchairs or hospital beds, which can be made from the same grade of raw material used in the auto parts industry,” he said.
Subcon has around 500 member companies with total investment of more than 100 billion baht.
The association is concerned the new government policy to support the development of EVs could significantly alter the auto parts industry as EVs use different types of auto parts to conventional vehicles, said Mr Chanatip. It will be much cheaper for local auto parts companies to switch to products made from the same materials because they would need new machines to produce EV parts.
Several Thai energy firms have already adjusted their businesses to tap into rising demand for energy-efficient products and services.
PTT Plc, the national oil and gas conglomerate, is conducting a feasibility study for lithium-ion battery production in Thailand. PTT subsidiary Global Power Synergy Plc has signed a licence and service agreement with M24, a lithium-ion battery startup in the US.
The Thai government has promoted 10 industries for the new economic era: next-generation cars; smart electronics; affluent, medical and wellness tourism; agriculture and biotechnology; food; robotics for industry; logistics and aviation; biofuels and biochemicals; digital; and medical services.
Mr Chanatip said Subcon plans to set up talks with government hospitals to seek ways to work together on research and development for medical equipment.
“Subcon will also negotiate with government hospitals to create orders for wheelchairs and hospital beds made from our members,” said Mr Chanatip.
Recently t he Federation of Thai Industries urged the government to set up a medical appliance centre to test the standards and quality of the medical and health industry. The centre could help small businesses to develop their products and expand the market.
Thailand exports 90 billion baht worth of medical appliances a year on average, importing 50 billion worth of medical equipment.