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Industrial policy and the development of the automotive industry in Thailand

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  • Kaoru Natsuda
  • John Thoburn

Abstract

It has been argued that restrictions on industrial policy implemented under World Trade Organization rules in the 2000s have greatly reduced the ‘policy space’ in which developing countries can promote industrialisation. This paper examines the case of Thailand's policies in developing one of the most successful automotive industries in the Southeast Asian region. We show that Thailand's use of local content requirements, later abolished under WTO rules, helped promote local suppliers and did not deter foreign investors. Substantial tariff protection of vehicles and components production did not deter exports, and has continued to the present, even under liberalisation policies. Supplementing tariff protection by various fiscal means to promote product champions in the automotive industry, Thailand has succeeded in retaining substantial policy freedom.

Suggested Citation

  • Kaoru Natsuda & John Thoburn, 2013. "Industrial policy and the development of the automotive industry in Thailand," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 18(3), pages 413-437.
    • Handle: RePEc:taf:rjapxx:v:18:y:2013:i:3:p:413-437
    DOI: 10.1080/13547860.2012.742690
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    References listed on IDEAS

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    1. Peter Nolan, 2012. "Is China Buying the World?," Challenge, Taylor & Francis Journals, vol. 55(2), pages 108-118.
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    Cited by:

    1. Keun Lee & Di Qu & Zhuqing Mao, 2021. "Global Value Chains, Industrial Policy, and Industrial Upgrading: Automotive Sectors in Malaysia, Thailand, and China in Comparison with Korea," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 33(2), pages 275-303, April.
    2. Di Tommaso, Marco R. & Tassinari, Mattia & Barbieri, Elisa & Marozzi, Marco, 2020. "Selective industrial policy and ‘sustainable’ structural change. Discussing the political economy of sectoral priorities in the US," Structural Change and Economic Dynamics, Elsevier, vol. 54(C), pages 309-323.
    3. Peter Warr & Archanun Kohpaiboon, 2018. "Explaining Thailand’s Automotive Manufacturing Success," Departmental Working Papers 2018-02, The Australian National University, Arndt-Corden Department of Economics.
    4. Kozo Otsuka & Kaoru Natsuda, 2016. "The Determinants Of Total Factor Productivity In The Malaysian Automotive Industry: Are Government Policies Upgrading Technological Capacity?," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 61(04), pages 1-18, September.
    5. Mohamad, Mostafa & Songthaveephol, Veerasith, 2020. "Clash of titans: The challenges of socio-technical transitions in the electrical vehicle technologies – the case study of Thai automotive industry," Technological Forecasting and Social Change, Elsevier, vol. 153(C).
    6. Bibhushan Raj Joshi, 2019. "Trend in Asian and European Automobile Industry and its Challenges," International Journal of Business and Administrative Studies, Professor Dr. Bahaudin G. Mujtaba, vol. 5(6), pages 321-328.
    7. Krystyna Gomółka & Piotr Kasprzak, 2021. "Directions and Prospects for the Development of the Electric Car Market in Selected ASEAN Countries," Energies, MDPI, vol. 14(22), pages 1-16, November.

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