es have been several Japanese automakers, including Toyota, Honda, Isuzu, Mazda, and Mitsubishi. These companies have made Thailand their regional production base. The strong domestic market for automobiles is one reason for this, and as a result Honda has made Thailand its hub for the Asia/Oceania region. Another reason for this is the high quality of Thai-made parts. Honda has also been considering making Thailand its production base for one-ton pickup trucks.
The market in Thailand is one of free competition. Governmental policy is to make Thailand an export base for automobiles in the region, including to Japan. The Royal Thai government seeks to maintain an open, market-oriented economy that encourages direct foreign investment to promote economic development, employment, and technology transfer. Investment from the United States is governed by the U.S.-Thai Treaty of Amity and Economic relations of 1966. It allows U.S. citizens and businesses incorporated in the United States to engage in business on the same basis as Thais and exempts them from most of the restrictions on foreign investment imposed by the Alien Business Law of 1972 (Thailand investment climate, 1997).
Thailand is already becoming the regional manufacturing center for Southeast Asia as far as automobile production is concerned, and the market has expanded by more than 20 percent annually over the last decade. Increased competition resulted in 1991 when the government decided to allow automobile imports, leading to a decline in vehicle prices. The auto-parts manufacturing industry in Thailand shows the best capability in the region, and the industry has been able to supply 80 percent of the parts used in pickup trucks and 60 percent of those used in passenger cars. The Japanese dominate this market, and imports from Japan make up 75 percent of the total. Most local parts manufacturers are indeed Japanese joint venture operations. American impor...