04 MACHINERY INDUSTRY
A good reputation is not enough Thomas Hundt German machine tools are highly regarded in Thailand. However, Japanese models are the market leaders while new competitors are emerging. Thailand is an ideal sales market for German machine tools as it is the second largest economy in Southeast Asia and its 25% share of manufacturing in terms of economic output is the highest share among the ten ASEAN states. Therefore, the machine tool market is significant, valued at EUR 910 million in 2022, with imported machines accounting for 86% of demand.
Thailand: Market for machine tools (in millions of Euros)
2020
2021
2022
Market *
800
759
910
Production
318
570
631
Export
257
457
507
Import
738
645
786
* Production minus exports plus imports Source: VDW 2023
UPDATE 1/2024
Japanese models are ahead in all market segments, followed by machine tools from China. Germany supplied under 4 per cent of the machines sold in 2022. “Thailand is Japan’s extended workbench” - Oliver Prpic Managing Director HERMLE (South East Asia). Japanese companies have invested heavily in Thailand in recent decades and dominate most industrial sectors. For example, the automotive industry, which is particularly important for mechanical engineering, is predominantly in Japanese hands.
THAILAND, THE LARGEST CAR MANUFACTURER IN SOUTHEAST ASIA Industry associations expect around 1.9 million cars and 2.1 million motorbikes to roll off the production line in 2023. The domestic automotive industry is led by groups such as Toyota in the passenger car sector and Honda in the motorbike sector. Japanese original equipment manufacturers are also the main suppliers. However, the entire industrial sector has grown so strongly that European and US automotive suppliers have now also established a broad base.
NEW CUSTOMER INDUSTRIES Electromobility will also influence the future demand for machine tools in Thailand. However, changes are occurring here more slowly than in Europe. Chinese investors are rolling out the Thai market for electric vehicles and setting up assembly plants. This is because the Thai government is generously subsidizing investments in electric cars, batteries, power electronics, cooling and charging systems. The first projects in these sectors have already been approved. Other important customers for machine tools include the huge electrical industry, together with manufacturers of air-conditioning equipment, the plastics industry with downstream mould construction, and other sectors of the metal industry. Several mechanical engineering companies based in Thailand manufacture machine tools and CNC machines tools for export. They include CITIZEN MACHINERY and Star Micronics from Japan, as well as ANCA Manufacturing from Australia. The Thai
