‘Detroit of the East’? Industrial Upgrading, Japanese Car Producers and the Development of the Automotive Industry in Thailand

Abstract

The automobile industry in Thailand has developed from an inward-oriented import-substitution industry into a competitive export driven industry. Multinationals, in particular the Japanese, have been instrumental in driving growth. Using empirical information the study argues that industrial upgrading has taken place largely in Japanese enterprises but that technology transfer from these firms has hardly taken place. Hence, Thai suppliers have remained as second tier suppliers.

Keywords:

• Automotive industry
• Japan
• multinationals
• technology
• Thailand
• suppliers

Notes

¹ Japanese automobile producers have chosen not to locate their production facilities in or near Detroit but have opted for factories in the southern states of the USA. Later, Korean automobile companies followed this successful example.

² Personnel communication. Interview with official of the Thai Ministry of Industry, July 2005.

³ The case study in section five is based on interviews and questionnaire responses from three Japanese car manufacturers and 15 suppliers in Thailand and enlightens further on this point. The car manufacturers are Toyota Motors Thailand, Mitsubishi Motor Thailand, and Isuzu Motors. Among the 15 suppliers are Ampas Industry, Jibuhin, NHK, Nippondenso Thailand, Summit Auto Seats Industry, Thai Koito, Thai Radiator and Thai Stanley. The other enterprises preferred to cooperate anonymously in this research project.

⁴ For further explanation of the Japanese developmental model see Johnson (1995); Woo-Cumings (1999); and Wong (2004).

⁵ Personnel communication. Interview with engineer at Isuzu, Thailand, June 2005.