2023 year-end reflection: New Opportunities for Thai Automotive Industry
The EV3.0 scheme has had a significant impact on the EV market in Thailand. From January to September 2023, Thailand had more than 140,000 newly registered 4-wheel EVs, amounting to more than a quarter of the total 520,000 registered vehicles during the same period.
The data reflects customer preference that aligns with Deloitte’s 2023 Global Automotive Consumer Study, which revealed that 60% of Thai respondents will choose an EV as their next car.
The trend is a positive boost for the 30@30 policy.
Even though the EV3.5 scheme will reduce some subsidies, new players are jumping into the market more fiercely than ever before.
The question is, how will Thailand’s automotive industry's supply chain and workforce adapt?
Deloitte estimates the market value of related businesses of Internal Combustion Engine (ICE) technology, such as ICE manufacturers, exhaust systems, transmission systems, and fuel systems, will be reduced by 10-15% in 2025 compared to 2020.
The country has not pushed policies to produce its own car brand, in order to help draw foreign investment and to make Thailand the world’s last ICE vehicle production base.
But this change will lead to an 18% reduction in the global automotive workforce by 2023 compared to 2007.
However, the business sector will likely see new growth opportunities in other areas, particularly from software. The growing trend of EVs will drive demand for software that will help customers travel more comfortably and conveniently.
According to Deloitte's report Software-Defined Vehicles: Engineering the Mobility Revolution, the software-defined vehicle (SDV) business is expected to penetrate the market from 2.4% in 2021 to 90% in 2029.
SDVs transform mechanical and electrical systems into software that can be updated. As a result, the vehicle will be able to detect road conditions and various obstacles more accurately. Vehicles can set maintenance schedules that vary according to driving style and route.
The car can utilise data and adjust details to suit each driver and can use Augmented Reality (AR) to increase driving vision in bad weather conditions.
SDVs also have a business perspective that can be expanded by the following dimensions:
1. Autonomous Driving: Also known as ‘Auto Pilot’, this is the highest level of Advanced Driving Assistance System (ADAS) that will help cars drive autonomously and safely, requiring efficient computer vision technology.
It can assess objects on the road instead of seeing the driver’s edge controls, including the transmission of information to cars, traffic systems, and people moving around, to effectively increase safety through the Vehicle to Everything (V2X) system.
2. Power Train and Vehicle Motion: Utilising AI to control battery usage and charging to the most efficient conditions can increase the driving distance and extend the battery’s life to greater than 12 years (the current industry standard is ten years).
3. User-Centric Experience: Car owners can customise their cars to better suit their needs, including unleashing the car’s performance, adjusting the ADAS settings, light/colour/audio settings, or adjusting the infotainment system and various screens. In addition, it covers using AI to estimate a recommended service date according to typical driving habits.
4. Architecture Core Blueprint: Vehicle software models will likely follow the likes of mobile phone companies, creating a platform allowing independent software developers to enter the market. This change requires systematic software architect management to prevent bugs and errors, including cybersecurity and the safety of personal data protection, which must have a trusted management system to back it up.
5. Data-Driven and Connected Services: Soon, cars can update various software via OTA, similar to a laptop or mobile phone, reducing the importance of service centres.
The growth and transformation of the automotive landscape in Thailand presents new opportunities but also risks. According to Sibros. tech, it was predicted in 2022 that there would be up to 10 million vehicles worldwide that would need to be recalled for software issues.
Mongkol Somphol / Automotive Sector Leader
Chodok Panyavaranant, Ph.D. / Manager - Clients & Markets
Deloitte Thailand
