Presentation file on "Investment Opportunities in Auto Sector in Thailand" by Mr. Chokedee Kaewsang, Deputy Secretary General, Thailand Board of Investment, April 2, 2015 at Sheraton Centre Toronto Hotel, Toronto, ON, Canada

1. Investment Opportunities in
Auto Sector in Thailand
Mr. Chokedee Kaewsang
Deputy Secretary General
Thailand Board of Investment

2. • Current Status and Trend of Thailand
Automotive Industry
• Thailand’s Human Resource Development in
Automotive Industry
• Investment Promotion Policy for Automotive
Industry
Outline

3. 3
Overview of Thailand Automotive Industry

4. World’s Automotive Production 2013
(Units of production)
World’s Production: 87.24 Million (+3.6%)
Thailand : 2.45 Million (+4.3%)
#9 in Worlds’Automotive Production
#1 in ASEAN for Automotive Production
Source: OICA as of Mars, 2014

5. Thailand Ranked #12
2014 Automobile Production
0
5000000
10000000
15000000
20000000
25000000 World’s Production: 89.7 Million
(+2.6%)
THAILAND: 1.89 Million (-23.5%)
#12 in Worlds’Automotive Production
#1 in ASEAN for Automotive Production
2014 No.12
1,880,007 units
Source: OICA as of Mars, 2015

6. Thailand as Production Hub for All Regions
Asia (32%)
Middle East (24%)
Oceania (21%)
EU (7%)
Africa (4%)
Thailand exports car to the world
Source: Automotive Summit ( TAPMA) as of June 20, 2013

7. Thailand:
9th largest
automobile
producer in
the world in
2013
Output:
18 assemblers
with a
combined
capacity of 2.8
mil. Units in
2015
Target:
To
manufacture
3,000,000
units in 2017
(2014
produced 1.88
mil.units
exports 1.12
mil.units to
150 countries)
High local
content :
80-90% for
pick-up and
30-70% for
passenger car
Automotive Capacity Getting Stronger

8. Future Expansion from Eco-car 2
• 9 brands ready to operate Eco-car 2 programs
• Create additional capacity of 1.38 million units

9. units
Thailand Automotive Industry Growth
559,428389,100
158,130
327,233
411,721
459,418
584,951
750,512
928,081
1,125,316
1,188,044
1,287,346
1,394,029
999,378
1,645,304
1,457,795
2,453,717 2,457,057
1,880,007
589,126
363,156
144,065
218,330
262,189
296,985
409,362
533,176626,026
703,405
682,161
631,251
682,161
548,871
800,357
795,250
1,436,335
1,330,672
881,832
14,000 42,200
66,700
130,000
152,836175,293180,554239,440
322,053
440,715
538,962
690,100776,241
535,563
895,831
735,627
1,026,671
1,128,152
1,128,102
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Production Sale Export
Year 2014
Production = 1,880,007 Units -23%
Domestic Sale = 881,832 Units -34%
Export = 1,228,102 Units 0%

10. Pure
Thai
23 %
SMEs
Foreign
J/V
Foreign
Majority
54 %
Local
Suppliers
Tier 1
LSEs
(Total 709 Companies)
Thai
Majority
23 %
[* LSEs : Large Scale Enterprises SMEs : Small & Medium Enterprises]
Source: Thai Autoparts Manufacturers Association, OIE and BOI as of 2014
(18 car companies, 8
motorcycle companies)
100,000 workers
(1,700 Companies)
Tier 2,3
Assembler
Structure of Thai Automotive Industry
10
450,000workers

11. Strong Cluster &
Supply Chain
Structure
TIER2&3
SME (Local
suppliers)
(1,700
companies)
Stamping,
plastics, rubber,
machining,
casting, forging,
function,
electrical,
trimming
TIER1
Vehicle parts
(386 companies)
Vehicle
&motorcycle
parts
(201 companies)
Engines,
Drivetrains,
Steering,
Suspensions, Brake
Wheels, Tires,
Bodyworks,
Interiors,
Electronics and
Electric systems.
ASSEMBLER
Passenger &
Pick-up
(17 companies,
23 factories)
Motorcycle
(8 companies,
8 factories)
Vehicles
Assemblers
(100,000
workers)
Dealer, Service
center
(200,000
workers)
Parts manufacturers (450,000 workers)
Supporting industries (100,000 workers)
SUPPORTING INDUSTRY
(Machinery, Equipment & Devices, Mold& Die, Jig & Fixture)
SERVICE
INDUSTRY
-Distribution
(W/H)
-Finance
-Testing
-Consulting
-Logistics
-Banking/
Leasing
UPSTREAM INDUSTRY (Steel, Plastics, Rubber, Electronics,
Glass, Textiles, Leather, Chemicals, Oil, Coating, and Galvanized
Metal)
POLICY&
SUPPORTING
BODY
-Government
-Associations/
Institutes
-Universities/
Technical
Colleges

12. 12
Manufactures Brand Capacity Future Expansion
1 Auto Alliance (Thailand) Mazda, Ford 300,000 -
2 BMW Manufacturing (Thailand) BMW/MINI 6,000 -
3 Dongfeng Automobile Dongfeng 5,300 -
4 Ford Motor Company (Thailand) Ford 200,000 -
5 General Motors (Thailand) Chevrolet 160,000 -
6 Hino Motors Manufacturing (Thailand) Hino 25,150 -
7 Honda Automobile (Thailand) Honda 240,000 240,000
8 Isuzu Motors Company (Thailand) Isuzu 220,000 -
9 Mitsubishi Motors (Thailand) Mitsubishi 450,000 -
10 Nissan Motor (Thailand) Nissan 240,000 -
11 SAIC Motor-CP MG 50,000 -
12 Scania (Thailand) Scania 1,000 -
13 Suzuki Motor (Thailand) Suzuki 135,000 -
14 Thonburi Automotive Assembly Plant Mer. Benz 7,000 -
Tata 8,000 -
15 Toyota Motor Thailand Toyota 700,000 -
16 Toyota Autoworks Toyota 18,000 -
17 TC Manufacturing and Assembly Fuso 12,000 -
18 Thai-Swedish Assembly Volvo / UD 21,700 -
Total 2,799,150 3,039,150*
Note *Not include expansion project of Eco-car Phase 2
Capacity of Vehicle Production in Thailand

13. 44. Federal-Mogul
47. Michelin
50. GKN Driveline
52. Goodyear
56. Grupo Antolin
58. Bayer
59. TI Automotive
65. Draexlmaier
67. American Axle
73. Rieter Auto.
84. F-Tech
86. Hayes Lammerz
93. 3M
13
2. Denso
4. Aisin Seiki
13. Yazaki
15. Sumitomo
16. Toyota Boshoku
18. Calsonic Kansei
19. JTEKT
20. Hitachi
28. Toyoda Gosei
33. NTN
34. NSK
35. Mitsubishi
39. NHK Spring
40. Koito
41. TS Tech
43. Takata
46. Bridgestone
49. Tokai Rika
57. Showa
61. Mitsuba
66. Asahi Glass
72. Stanley
74. Akebono
Brake
82. Sanden
84. F-Tech
92. Alpine
94. Pioneer
98. Omron
Japanese Global Suppliers
28/29 Companies 29/71 Companies
Other Global Suppliers
1. Robert Bosch
3. Continental
6. Faurecia
7. Johnson Control
8. ZF
11. TRW
12. Delphi
14. Lear
17. BASF
21. Valeo
22. Visteon
23. Autoliv
25. Mahle
27. Dana
31. BorgWarner
36. Teneco
Top 100 Global Suppliers Active in Thai Automotive Industry
Strength of Thai Automotive Industry

14. Thai Automotive Industry - OEM Location
Source: Thailand Automotive Institute

15. Rayong
Body Parts: 24%,
Engine Parts; Drive, Transmission &Steering
Parts: 15% each,
Suspension & Brake Parts: 12%,
Electrical Parts: 10%,
Accessories: 7%,
Mold&Die: 2%,
Other: 15%
Samutprakarn
Body Parts: 22%,
Electrical Parts: 15%,
Engine Parts; Drive, Transmission &Steering Parts: 8% each,
Suspension & Brake Parts: 5%,
Mold&Die: 4%, Accessories: 3%, Other: 36%
Chonburi
Body Parts: 25%,
Engine Parts: 22%,
Drive, Transmission &Steering Parts: 15%,
Electrical Parts: 9%,
Accessories: 5%,
Suspension & Brake Parts: 4%,
Mold&Die: 4%, Other: 16%
Bangkok
Body Parts: 9%,
Engine Parts; Electrical Parts; Drive,
Transmission&Steering Parts; Accessories: 6% each,
Suspension & Brake Parts: 4%,
Mold&Die: 3%,
Other: 60%
Pathumthani
Body Parts: 18%,
Engine Parts; Electrical Parts: 13% each,
Suspension & Brake Parts: 10%,
Drive, Transmission&Steering Parts; Accessories: 8% each,
Other: 31%
Thai Automotive Industry
- Auto parts Location
Source: Thailand Automotive Institute

16. “Great Leap of Next Decade” for ASEAN
Automotive Industry
Relatively low penetration of vehicles
Market expansion due to Rise of Income
Growth and Rise of Middle Class
Push to produce small cars by Low Cost
Eco Car Policy (Eco Car and Low Cost
Green Car Policy)
More market competition due to
liberalization under FTAs
Market: 5 million cars by 2020-larger than
Japanese market in 2012.
Production: Surpass 6 million cars through
export growth by 2020.
Growth Factors
of ASEAN
Market
Source: Automotive Summit ( TAPMA) as of June 20, 2013

17. By 2018, ASEAN will be the 6th Largest Automotive Market Globally
1
2
3
4
5
6
7
8
9
10
17,708,634
11,562,701
3,524,789
3,475,760
3,173,634
2,904,338
2,593,769
2,409,826
2,204,229
1,941,253
SALE 2011Global Rank
29,010,852
16,466,283
5,788,462
5,364,935
4,591,476
3,850,511
3,499,860
3,429,031
2,704,451
2,563,360
SALE 2015F SALE 2018F
33,391,276
16,970,585
9,039,806
6,287,188
4,717,218
4,692,961
4,025,975
3,968,411
2,897,909
2,793,822
Source: Frost & Sullivan & ASEAN Automotive Federation

18. Strong Network in ASEAN and ASEAN+6
Parts Sourcing for ASEAN+ Dialogue Partner
Source: ASEAN Automotive Federation(Automotive Summit 2013) as of June 24, 2013

19. 19
Thailand’s Human Resource Development in
Automotive Industry

20. Thailand’s Current Human
Resource Status
By Skills
Manufacturing 50%
Mechanics 26%
Engineering 7%
Electrical 5%
Electronics 7%
Acct/Admin. 5%
Others 1%
By Job Level
Staff 74%
Technical 7%
Supervisor 7%
Expert 5%
Engineer 4%
Executive 3%
By Education Level
Secondary-High School 50%
Vocational Certificate 15%
Diploma 25%
Degree 10%
Source: Auto Summit 2013 (TAI/ Role of HR Development in Automotive Industry) as of
June 28, 2013

21. Thai monthly wages are competitive
Unit=US$
Thailand
(Bangkok)
China
(Beijing)
Vietnam
(Hanoi)
Malaysia
(KL)
Singapore
Workers 366 522 155 429 1,230
Engineers (Mid-level) 699 863 355 1 ,038 2,325
Managers
(Department Chief
Level)
1,574 1,501 773 1,966 4,268
Monthly Legal
Minimum Wage
181*
(20 days)
229 128 274 -
Social Security (%
paid by employer)
5% 45.4% 22% 13% 16%
Source: JETRO 24th Comparative Survey of Investment-Related Costs
Comparison in Major Cities and Regions in Asia and Oceania, as of May 2014

22. HR Development in the Automotive Industry (AHRDP)
Ministry of
Industry
The Federation
of Thai
Industries
THAI
LAND
JETRO
(METI)
Japan
Chamber of
Commerce
JAPAN
• TOYOTA
Production
System
TOYOTA
• Skill
Certification
NISSAN
• Mind
Management
• Skill
Manufacturing
DENSO
• Mold & Die
HONDA
SUPPORTED BY
JAPANESE COMPANIES
Source: Thai Automotive Institute as of July 1, 2013

23. 23
Update on Investment Promotion Policy

24. 24
New Approach to Granting Investment Incentives
Activity-based Incentives Merit-based Incentives
+
Classified incentives based on
the importance of activities
Grant additional incentives to encourage
more investment/expenditures that
benefit the country or overall industry
A1
A2
A3
A4
B1
B2
1. Competitiveness Enhancement
2. Decentralization
3. Industrial Area Development

25. A1
A2
A3
A4
B1
B2
A1: Knowledge-based activities, focusing on
R&D and design to enhance the country’s
competitiveness (8-year CIT exemption without
cap, exemption of import duty on machinery/raw
materials and non-tax incentives)
A2: Activities in infrastructure for the country’s
development, activities using advanced
technology to create value added, with none or
very few existing
investments in Thailand
(8-year CIT exemption, exemption
of import duty on machinery/raw
materials and non-tax incentives)
A3: High technology activities which are
important to the country’s development,
with a few investments already existing in
Thailand (5-year CIT exemption,
exemption of import duty on
machinery/raw materials and
non-tax incentives)
B1/B2: Supporting industries that do not use high technology but are still important to value chain
(B1 : Exemption of import duty on machinery/raw materials and non-tax incentives
B2 : Exemption of import duty on raw materials and non-tax incentives)
A4: Activities with lower
technology than A1-A3 but
add value to domestic
resources and strengthen
supply chain
(3-year CIT exemption,
exemption of import duty on
machinery/raw materials and
non-tax incentives)
Activity-based Incentives

26. Non-tax Incentives
• Permit for foreign nationals to enter the kingdom for
the purpose of studying investment opportunities
• Permit to bring into the Kingdom skilled workers and
experts to work in investment promoted activities
• Permit to own land
• Permit to take out or remit money in foreign currency
Non-tax Incentives

27. 4.6 Manufacture of General Automobile : B1
4.7 Manufacture of automobile engines
• Project must have pressing of parts, not less than 4 out of 5 parts,
as follows: Cylinder Head, Cylinder Block, Crankshaft, Camshaft
and Connecting Rod : A3
• Assembling of engine : A4
4.8 Manufacture of Vehicle Parts : B1 & A2 for Priority List (Cont.)
Eligible Activity for Automotive

28. 4.8 Manufacture of Vehicle Parts for Priority Activities
• Manufacture of vehicle parts using high technology
• Manufacture of automobile parts for safety parts and energy-saving
parts
• Manufacture of parts for Hybrid, Electric Vehicle (EV) and Plug-in
Hybrid (PHEV)
• Manufacture of rubber tires for vehicles
• Manufacture of other vehicle parts
Incentives:
• 8 years corporate income tax exemption, accounting for 100% of investment (exc.
cost of land and working capital)
• Exemption of Import Duty on Machine
• Exemption of Import Duty on Raw Material used in manufacturing export
products
Eligible Activity for Automotive (Cont.)

29. Non-tax Incentives
• High Market Potential
• Strong Support Industries
• Skilled Labor
• Competitive Cost
Automotive : Attractive Investment Sector

30. Thank you