Location-based Advantages: Entry of Foreign Firms in the EV Industry in Thailand
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Abstract
Thailand’s automotive industry is experiencing a paradigm shift as it deliberately moves toward electrification through its Electric Vehicle Policy (EVP). The structural change has disrupted the competitive dominance of incumbent foreign legacy automakers (FLA). As such, it is compelling them to adjust their developmental strategy while facing strong competition from emerging new entrants. Unlike FLAs that must balance their production and sales between internal combustion engine vehicles (ICEVs) and electric vehicles (EVs), their distinctive advantage is in EV technology. This study examines the motivations of emerging market multinational enterprises’ (EMNEs) entry into Thailand, analyzing the case of EV manufacturers from China, to identify the opportunities for FLAs to partake in its goal to produce 30% EVs of its total output by 2030. This research uses various secondary sources from the Bank of Thailand to industry reports, external media reports, and annual reports of BYD and Great Wall Motor between 2014 and 2023. Findings indicate that firm-unique position as global EV leaders and Thailand's location-based advantages contributed to the rapid internationalization of EMNEs from China. At the same time, incumbent FLAs’ industry position is weakened by declining sales and a reduced market share. However, some activities in the EV supply chain remain underdeveloped, presenting opportunities for FLAs to leverage their expertise in key areas such as: dedicated research collaborations on battery technology, charging station infrastructure development, workforce skills and development, battery disposal and recycling solutions, and ICEV-EV conversion technology.
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