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Shifts To EV Cease Suzuki’s And Subaru’s Manufacturing In Thailand

Shifts To EV Cease Suzuki’s And Subaru’s Manufacturing In Thailand

Thailand’s gradual transition to electric vehicles (EV) has changed not only consumers’ habits, but also automakers’ business plans in the country.


Between end-May 2024 and early June, Tan Chong Subaru Automotive Thailand (TCSAT) and Suzuki Motor Corporation announced to cease their manufacturing cars in Thailand — end of 2024 and 2025 respectively.

Subaru Vehicles

Image credit – Subaru Asia

According to Autoindustriya.com, Tan Chong International Limited (TCIL) filed an announcement with the Hong Kong Stock Exchange that they are phasing out their existing Complete Knock Down (CKD) business model, and will transition to solely distributing Completely Build Up (CBU) Subaru units from Japan. Tan Chong Subaru Automotive Thailand (TCSAT) will cease assembly by the end of the year.

This makes TCSAT the second Subaru assembly plant that will cease production in the region as Tan Chong no longer makes Subaru vehicles in the Malaysia assembly plant. TCIL is the exclusive distributor of Subaru vehicles for many countries in the ASEAN region, including the Philippines. TCIL is the parent company of Motor Image Pilipinas. 

TCSAT was a joint venture between TCIL and Subaru Corporation that’s located at the Lat Krabang Industrial Estate just outside of the capital of Bangkok. Inaugurated in 2019, TCSAT was the first major dedicated Subaru assembly plant in Southeast Asia. At its maximum capacity, TCSAT can produce 100,000 Subaru vehicles annually.

While TCIL disclosed the reason as a “proactive business transformation” to HK Stock Exchange, the Subaru distributor, according to reports, has been experiencing continuously declining sales in Thailand which may have led to the plant closure. Moreover, reports also say Tan Chong Motor Holdings Bhd is apparently in a tight financial situation after posting four consecutive years of net losses.

Suzuki Vehicles

Image credit – www.khaosodenglish.com

Meanwhile, The Nation Thailand reported Suzuki Motor Corporation will cease production at its factory in Thailand by the end of 2025 following a review of its global production structure, the Japanese automobile manufacturer said. The global push for carbon neutrality and the increasing adoption of electric vehicles (EV) led to Suzuki reassessing its global production efficiency, the company said.

Consequently, Suzuki has decided to cease operations at the Suzuki Motor (Thailand) Co Ltd (SMT) factory by the end of 2025, the company said. Suzuki came up with a production plan in Thailand in 2007 when the government introduced measures to promote eco-cars.

Suzuki applied to participate in the programme and subsequently established SMT in 2011. After receiving approval to join the eco-car programme, the company began production in 2012 and was able to produce and export up to 60,000 vehicles per year.

Despite shutting down the production line, Suzuki said it would continue its sales and after-sales services in Thailand. The company plans to adjust its business strategy by importing vehicles from production lines in ASEAN countries, Japan, and India.

Suzuki added that in order to support the government’s policy on carbon neutrality, the company would introduce EVs and hybrid cars in Thailand in the future. Currently, Suzuki imports vehicles from neighbouring Indonesia, including popular models such as the Ertiga and XL7, which are among the top-selling Suzuki models in Thailand.

These imports benefit from special tax exemptions under the ASEAN Free Trade Area, which allows duty-free import if the vehicles contain at least 40% ASEAN content.

Transition To EVs

Sluggish auto sales were attributed as the reason behind both brands’ pulling out manufacturing facilities. Additionally, reports of consumers’ preferring EVs to Internal Combustion Engine (ICE) cars are putting more pressure on the latter’s position in the country.

Comparisons have been made between EVs and ICEs in terms of cost-effectiveness and convenience. It turns out that EVs proved more worthwhile given the country’s ramping up charging station across the country, after sales and service, along with offsetting petrol costs.

China Global South Project noted Thais’ enthusiasm for Chinese EVs is among the highest in Southeast Asia. Affordability and whether the brands’ service centers are widespread across the nation are among the top considerations for Thai customers.

38-year-old Patcharapan Maneechote is one such customer. She is the proud owner of two of the most popular Chinese EV brands in Thailand: BYD and Chinese state-owned SAIC Motor’s MG. In February, CGSP visited Patcharapan’s home in Chachoengsao Province near Bangkok, where she showcased the shiny vehicles and her privately installed electric chargers.

Patcharapan Maneechote, a Chinese EV user, shows her BYD and MG electric cars at her home in Chachoengsao Province, Thailand.
Image credit – China Global South

“I drive a lot every day, and I used to spend so much money on gas every month,” Patcharapan said. “That is why I started to think about purchasing an electric car and decided to switch.”

Patcharapan, who uses her EV to get to her business in Bangkok, said she had considered a few American and South Korean brands but was deterred by the limited number of those brands’ service centers in Thailand. She preferred to purchase brands with more service centers and with long warranty periods.

Subaru vehicles in Southeast Asia to arrive as Completely Build Up (CBU) from Japan, while Suzuki’s decision to cease automobile production in Thailand marks the second significant move of its kind. The Subaru factory in Thailand is a joint venture between the Tan Chong International Group, which holds a 74.9% stake, and Subaru International, which holds 25.1%.

 

 

 

 

 

 

 

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