Cars line the streets of Howell, MI, where auto parts company Thai Summit Group recently expanded its 30-year-old factory. Image: Joshua Young.

Thai Investment Gives a Lift to America’s Auto Industry

ASEAN

Thailand has earned the nickname “the Detroit of the East” on the strength of its robust automobile industry, the largest in Southeast Asia. Recently, as trade relations between ASEAN and United States have grown ever closer, Thai auto manufacturers have formed correspondingly strong ties with their American counterparts based in the original Detroit of Southeast Michigan.

One such manufacturer is Thai Summit Group, a metal stamping company headquartered outside Bangkok. The firm’s American branch announced plans on March 31st, 2016 to open a brand new plant in Nelson County, Kentucky. The plant’s construction represents an investment of $110 million and comes after the signing of a contracting deal with Ford Motor Company, which operates a truck assembly plant in nearby Louisville. The 220,000-square foot facility will house the processing of raw sheet metal into shaped parts ready for installation. Starting from its completion in late 2016, its operations will add a projected 216 jobs to Kentucky’s auto manufacturing labor force over the next decade.

The announcement comes in the context of a broader push by Thai Summit Group to invest in its operations in the United States. Last August the company began a $52.5 million project to expand its original 30-year-old facility in Howell, Michigan, a move it stated was necessary in order to keep pace with the growing demands of contracts it has with auto giants like Ford and Chrysler.

Thai investment in the United States auto manufacturing industry has followed a general upward trend. The value of Thai exports of vehicles and vehicle parts to the United States grew 255% over the past ten years, reaching a total of $846 million in 2015. Experts predict that the Trans Pacific Partnership (TPP), when ratified, would further accelerate trade between the United States and ASEAN countries in the auto manufacturing sector.

Investment in auto manufacturing between the United States and Thailand has been a two-way street. Ford has invested $500 million in a factory in Thailand’s Rayong Province, which it has run since 1995 through a joint venture with Japanese automaker Mazda under the name Auto Alliance. In 2012, Ford opened its own 418,000 square foot factory, also in Rayong, which according to the company is a source of employment for over 2,000 Thai workers.

Benjamin Nathan is a research intern at the East-West Center in Washington. He is a recent graduate of Williams College.