Technology
Thailand’s Automotive Industry Faces Shift Amid Data Center Growth
Kasikorn Research Center reports a decline in domestic car production as EV imports rise, while experts urge government support for AI and software to leverage the country's expanding data center sector.
According to a report by Khaosod Online citing Rujipan Assarat of Kasikorn Research Center, Thailand’s automotive industry is undergoing a significant transformation. Domestic vehicle production is currently trending downward, while imports—particularly Battery Electric Vehicles (BEVs)—are surging. BEVs accounted for 72% of Thailand's total car import value during the first seven months of 2026.
To address this, the government is considering new excise tax measures designed to incentivize manufacturers to shift from importing vehicles to domestic production using local components. The goal is to boost the local economy and increase value-added manufacturing. If these measures are implemented effectively, analysts project that domestic production could return to growth by 2027, following an expected 1.8% contraction in 2026.
For residents and those monitoring Thailand’s economic landscape, this shift highlights a broader push toward high-tech infrastructure. Experts emphasize that the ongoing boom in data centers is vital for the future, as these facilities provide the necessary infrastructure for AI integration and secure data management. While the government’s strategy aims to stabilize the automotive sector, the long-term success of these policies remains dependent on the specific criteria set for local content requirements and the effectiveness of future regulatory oversight. It remains to be seen how these tax incentives will be finalized and how quickly manufacturers will adapt their supply chains to meet the new domestic production targets.