Japan Envoy Urges Thailand to Protect its Car Export Hub as Cheap EV Imports Surge

 

Ambassador Otaka Masato tells The Standard forum that two Japanese carmakers have quit Thailand and calls for joint work on green, space and health industries.

 

Japan’s ambassador to Thailand has urged the government to protect the country’s automotive export hub, warning that a rising tide of cheap imported cars, particularly electric vehicles (EVs), threatens the industry that anchors Japan–Thailand economic ties.

 

Otaka Masato delivered a keynote titled “Japan–Thailand: Co-Creating the Next Economy” at the opening of “Economic Forum 2026: Reinvent Thailand”, hosted by The Standard.

 

“Once you open the gate to the domestic market for cheap cars, it will have some adverse impact on the existing automotive sector, and this will impact the capability of the Thai industry to export,” he said.

 

A healthy home market, he argued, is needed to sustain overseas sales.

 

 

A sector under pressure

Otaka said the industry remains vital. His slides put its contribution at about 9% of GDP and its workforce, including parts makers, at about 800,000 people. Local content reaches as high as 94–95% for some pickups and eco cars, he noted, so most of the value stays in Thailand.

 

Exporting cars and trucks has also earned the country valuable foreign currency. But his presentation showed domestic sales trending down while imported fully built units gained share.

 

The slides said weaker demand and rising imports have left the manufacturing supply chain in a “very difficult situation”. Last year, two of the eight major Japanese carmakers, Suzuki and Subaru, stopped producing cars in Thailand.

 

“That’s a significant impact,” he said.

 

The sector has also been hit by the Middle East conflict, which has curbed exports, and by flooding in late September that forced Japanese makers to halt assembly lines for two weeks because parts from affected areas were unavailable.

 

A little over 150 Japanese companies were affected, mostly around Chon Buri, compared with more than 500 in the 2011 floods.

 

Otaka acknowledged that EVs benefit the environment. But he said Thailand does not yet have the cheap green electricity that has driven EV adoption in countries such as Norway.

 

He urged officials to examine the sector carefully and decide how it should be sustained. His first takeaway was to value Thailand’s role as an export hub.

 

 

How Japan sees

Thailand Japanese investment overseas remains strong, Otaka said, but Thailand has slipped to fifth place among foreign investors since 2022–2023.

 

That is not because Japanese capital has fallen, he said, but because other countries are investing more. Japanese investment in China has dropped sharply, while investment in the rest of Asia is stable.

 

Vietnam is Thailand’s most direct rival for investment, and India is rising quickly. Investment in Singapore is growing on the back of social media, AI and data centres.

 

He said Thailand has been affected by the Middle East situation less than some, though it relies heavily on the region for energy and some products, including naphtha and urea fertiliser, are in short supply.

 

Thailand’s terms of trade are weakening as import costs outpace export values. In Japan, with the 2% inflation target roughly met, he expected further interest rate rises, which will weigh on growth.

 

 

 

Conditions in Thailand, he said, are “not so bad”. He pointed to success outside the cars. A pet food producer in Thailand employs about 5,000 people, may reach 10,000, and exports 96% of its output, over half of it to the United States.

 

“Keeping this kind of export hub industry is a great benefit for Thailand,” he said.

 

 

Green transition as business

His second takeaway was that global and social challenges are business opportunities.

 

According to his presentation, it showed Thailand's bioethanol output of about 1 billion litres a year and biodiesel of about 2 billion, far behind the United States and Brazil in ethanol and Indonesia in biodiesel. But the country has abundant sugar cane, cassava and palm, and has long blended ethanol into fuel, joining a small group including Brazil, India and Japan.

 

A biofuel public-private roundtable was agreed at the ASEAN Economic Ministers–METI consultation in September, and Japan is supporting biofuel and bio-industry development. Bio-based alternatives might eventually replace naphtha, he said.

 

Waste and recycling are another opening. Japan has eight recycling laws and the lowest per-capita municipal waste in the OECD, he said. It recycles 85% of PET bottles, against 19.6% in the United States and 42.7% in Europe, and 97% of construction waste.

 

Japan taxes older cars more heavily to encourage replacement. It is already supporting, through a JICA project, a system under an end-of-life vehicles act being considered in Thailand.

 

 

Space and frontier technology

Otaka said the space industry has become a real business, with launches heading from several a year to several a day. His slides projected the global space economy growing from about US$550 billion today to US$1.8 trillion by 2035.

 

Thailand, he argued, should focus not just on buying rockets or satellites but on data. More than 40 Japanese companies attended Thailand’s recent space week seeking partners, and data sharing and processing could generate business before Thailand has its own satellite.

 

Japan is ready to help with capacity building. He also urged Thailand to join early work on optical semiconductors, which use less electricity and could improve satellites and quantum computing, as well as 6G and solid-state batteries.

 

“You need to join the camp; you need to find your partners,” he said, naming Japan as a good candidate.

 

 

Ageing societies

Thailand’s fertility rate of 0.86 is “staggering”, he said, against 1.2 to 1.3 in Japan. His slides showed Thailand’s ageing rate rising about threefold in 25 years and noncommunicable diseases accounting for over two-thirds of its disease burden.

 

Japan is working to narrow the gap between life expectancy and healthy life expectancy so that people can keep working and place less strain on social security.

 

Life expectancy is 84.3 years in Japan and 77.4 in Thailand, he said, while healthy life expectancy is 72.6 and 67.4, respectively. In health terms, a 67-year-old Thai is equivalent to a 72-year-old Japanese.

 

Japan is also labelling companies that invest in employee health, and their share prices tend to outperform, he said.

 

Because the two countries share the same demographic challenge, Otaka said Japan looks forward to working with Thailand on health screening and related industries, an area where Thai conglomerate CP is already active.

 

It is a new field, he said, that will “benefit the Thai economy for sure”.

 

Otaka closed on an optimistic note, summing up his three takeaways: keep Thailand’s strength as an export hub, treat global and social challenges as chances to create new business, and stay close to the groundbreaking technologies of the future.

 

With Japan’s experience and Thailand’s strengths, he suggested, the two countries are well placed to build the next economy together.