Japan envoy urges Thailand to review EV import policy

Japan’s ambassador to Thailand has called for a review of how duty-free electric vehicle imports affect the country’s established automotive industry, arguing that declining domestic sales could weaken its manufacturing base and long-term export competitiveness.

Otaka Masato, Japanese Ambassador to Thailand, urged Thailand to draw lessons from Suzuki and Subaru’s decisions to end local vehicle production and consider how to preserve an industry that has supported the economy for decades.

The ambassador addressed the issue at The Standard Economic Forum 2026: Reinvent Thailand on November 4, 2026, during a session titled “Japan-Thailand: Co-Creating the Next Economy”.

Domestic sales underpin export competitiveness

Otaka argued that a strong domestic market is essential to maintaining Thailand’s position as an automotive export hub. Manufacturers need sufficient sales at home to sustain economies of scale and remain competitive overseas.

The opening of the market to EV imports at a zero tax rate over the past three to five years had significantly changed domestic competition, he said, putting pressure on sales by established manufacturers.

Although promoting EVs brings environmental benefits, Otaka questioned the wider industrial consequences of allowing large volumes of inexpensive imported vehicles into the market.

“When we open the domestic market to large numbers of cheap cars from abroad, this has a negative impact on the existing automotive industry and affects Thailand’s ability to export to other countries,” he said.

In his assessment, falling domestic sales could undermine the production volumes needed to support exports over the longer term. He cited the decisions by Suzuki and Subaru to end vehicle production in Thailand as signs of the pressures facing the industry.

An export industry supported by local suppliers

Otaka highlighted Thailand’s development into a regional automotive export centre, supplying vehicles to more than 100 countries and bringing substantial revenue and foreign currency into the economy.

“Thailand’s emergence as an automotive export hub is a major success story, exporting fuel-efficient cars and large trucks to more than 100 countries worldwide and generating income for the country,” he said.

The Bangkok Biznews account of his remarks cited more than 80,000 jobs and a local-content ratio exceeding 90%, highlighting the industry’s connections with domestic suppliers and the wider economy.

Otaka urged Thailand to recognise the value of export-oriented industries that rely heavily on locally produced materials and components when considering its future economic direction.

Conflict and flooding add to production pressures

Otaka also identified disruptions beyond domestic competition. Conflict in the Middle East had directly affected passenger-car exports, while flooding had interrupted supplies of automotive parts.

According to the report, flooding in the Chao Phraya basin damaged the parts supply chain, forcing most Japanese vehicle manufacturers to suspend production temporarily for up to two weeks.

Against these pressures, Otaka called for Thailand and Japan to work closely together to adapt their industrial relationship and build the next phase of their economies.

“Preserving industries that serve as export hubs is extremely important for Thailand,” he said.

“I think it would be useful to look carefully at the automotive industry again, consider whether we should preserve it and how.” 

Source: Bangkokbiznew