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Industry Outlook 2023-2025: Auto Parts Industry
Periodic chip shortages have continued to drag on auto supply chains, in particular on the OEM market. The Thai auto parts industry thus grew at a slower pace through 2022. At the same time, the business environment has been made more difficult by a steep uptick in inflationary pressures that has eroded consumer spending power in domestic and international markets. The situation will remain somewhat unfavorable through 2023 and a combination of a global slowdown, which will adversely affect consumer demand, and a continuation of US-China tensions, which are impacting chip production, will mean that auto parts manufacturers will see only sluggish growth in the year. However, conditions should improve in 2024 and 2025, as major chip manufacturers expand their capacity, and the global economic outlook steadily improves. Also, on the positive side, the REM market will continue to grow with the expansion in the national vehicle fleet and the desire by some owners to defer purchases of new vehicles by making more extensive repairs to those currently on the road. Challenges in the coming period will include (i) the introduction of anti-dumping measures by the US government that target Thai tire exports, and (ii) the Thai government’s promotion of zero emission vehicles, which will bring with it extremely wide-reaching changes for the industry.
Industry Outlook 2021-2023: Electronics By Wanna Yongpisanphob
The Thai electronics industry is forecast to return to healthy rates of growth over the three years from 2021 to 2023 thanks to a number of different developments on the technology front. In particular, demand for electronics parts will be boosted by the development and rollout of 5G technology and the need for equipment that supports this, and by the increasing market penetration of smart cars, which will in turn encourage a greater uptake of hyperconnected internet of things (IoT) applications. These changes to the commercial landscape will then drive stronger demand for integrated circuits (ICs) and hard disk drives (HDDs), especially for the large-capacity HDDs that are used in data center and cloud computing applications, where demand for big data applications is growing rapidly. In terms of consumer demand, the COVID-19 pandemic has also helped to precipitate a sudden explosion in working from home and distance learning that has then translated into stronger sales of PCs, notebooks, tablets and smartphones. Meanwhile, the shortage of ICs that was weighing on the industry (especially for use in auto assembly) should begin to dissipate in 2Q21, because production capacity has now risen on greater investment expansions from technology-leaders.
Industry Outlook 2024-2026: Beverage Industry
The Thai beverage industry is heavily focused on the domestic market, as 79% of output is consumed within the country. Thanks to the ending of the Covid-19 pandemic and the normalization of economic activity, production, and domestic distribution began to rebound in 2022, but through the first 8 months of 2023, the escalating cost of living, weakening spending power, coupled with the impact of rising costs and increases in the sugar tax weighed on output and consumption. Over 2024 to 2026, however, output should edge up at an average annual rate of 1.5-2.5%, with the domestic market enjoying growth of 3.0-4.0% per year, supported by: (i) the completion of the economic recovery, especially in restaurant, hotel, pub, and bar businesses; (ii) the intensification of the El Niño and the general increase in temperatures; and (iii) ongoing urbanization and expansion in convenience store branch networks. Although the domestic outlook is generally positive, exports will struggle, and growth is expected to come to just 1.5-2.5% annually. Overseas sales will be helped by the reopening of border crossings with neighboring countries and the gradual strengthening of purchasing power in these markets. However, over the past few years, Thai players have increased their investments in production facilities in these countries, and as output from these rises, exports will suffer.