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30 Mar 2017


Vehicles with Intelligent System to Boost Sensor Sales to THB26 Billion in 2017(Current Issue No. 2835 Full Ed.)

 KResearch is of the view that a transformation in automotive technology towards intelligent operating systems will increase safety and convenience for drivers, as well as significantly bolster demand for the sensors required in these automotive electronics. We expect that demand for such sensors will reach perhaps 112.3 million units in 2017, increasing 13.1 percent over the 99.2 million units reported for 2016, thus equivalent to over THB26.95 billion in value, rising 8.6 percent over the THB24.81 billion for 2016.

However, Thailand still needs to import these advanced automotive sensors from Japan, China, the US and Malaysia, because they have the sophisticated technologies needed to produce them, whereas automotive sensors manufactured in Thailand are more conventional, thus failing to meet the new sensor demand from Thai automotive plants.
Given this, we at KResearchare of the view that there are opportunities for foreign investors – especially Japanese – to invest in more advanced automotive sensor manufacturing here for import replacement and/or export to other major car manufacturing countries, e.g., Indonesia, Malaysia and Japan.

Three reasons that will likely induce foreign companies to invest in such automotive sensor manufacturing in Thailand are: 1) expected growth in demand because auto plants will likely focus on vehicles with intelligent operating systems in the future, especially vehicles in the compact and medium passenger car categories that are most popular in the Thai market; 2) corporate tax exemptions of at least eight years, and as such, would be more attractive than the tax incentives offered by countries that own the intelligent operating system technologies, particularly Japan that now imposes a corporate tax rate of 30 percent; and, 3) rising proficiencies in the Thai workforce towards more advanced automotive electronic manufacturing capabilities in the future.

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