Auto-parts makers mull switch to medical equipment
Auto parts makers in Thailand are studying a possible switch to manufacturing medical equipment or aircraft parts, according to the Federation of Thai Industries. Meanwhile, the Board of Investment said it is making medical equipment and technology a priority sector for support.
The Covid-19 pandemic has created massive global demand for medical equipment while also sending economies into a downward spiral, causing consumers to spend less and vehicle sales to plummet. Thai manufacturers, therefore, are looking for ways to adapt.
“The [Auto Parts Industry Club] wants to support its members adjusting their businesses to survive and keep operating in the long term,” said Pinai Sirinakorn, Chairman of the club that is part of the Federation of Thai Industries (FTI).
Thailand has about 2,000 auto parts companies, of which 700-800 are FTI club members, according to the FTI. The companies are original equipment manufacturers (OEM), produce 80 percent of their parts for global carmakers.
But car production in April hit its lowest level in 30 years with just 24,711 units because of weak global demand, factory shutdowns, and widespread layoffs.
Meanwhile, in response to the soaring global demand for medical equipment, the Board of Investment said it is approving new measures to encourage investment, and especially foreign investment in the sector.
“The medical cluster has become a priority,” said BOI Secretary-General Duangjai Asawachintachit. “We are encouraging existing companies to enhance the production of face masks, medical gowns” and other personal protective equipment.
Duangjai said Thailand’s success in containing the coronavirus should appeal to investors concerned about maintaining their supply chains in the event of a disaster.
“Our ability to manage the crisis will help when people have begun to rethink supply-chain management,” she said. “Resiliency is the word of the day, not just the lowest cost.”