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cost such as elimination of automotive parts and possibly transfer of technological. So since EU is very similar to Japan in the way that both are developed countries and do not need to purchase automobiles from Thailand and more importantly both Japan and EU have its own automotive brands. The benefit from Thailand-EU free trade agreements that Thailand could benefit should be similar to what Thailand benefit from JTEPA and AJCEP. Such as lower production cost of European automobile brand due to reduction or elimination of tariff on automotive parts and possibly transfer of technology. Expansion of international market is necessary for Thai automotive industry to become highly skilled and technological production base in South-East Asia.

Chapter 9: Conclusion

In conclusion, the paper has analyzed Japanese FDI in Thai automotive industry. The paper starts with brief history of how Thai automotive industry started and become one of the most important automotive producer and exporter in ASEAN market and Japanese market.

Thai automotive industry has strong domestic market and international markets that support the industry. Export of vehicles has increased dramatically after the joining of ASEAN (Association of South-East Asia Nations). Free trade between ASEAN nations eliminates tariff rate on automobiles and some of automotive parts. Free trade between Japan does not increase export of vehicles dramatically like ASEAN markets but JTEPA and AJCEP lower production cost and improved competitiveness in Thai automotive industry. We have found out that FDI can increase productivity through technological transfer. Caves (1974) suggested that there are 2 effects on flow of FDI. FDI will increase productivity through transfer of technologies and increase in competitiveness. From what we have discussed in SWOT analysis, Thai automotive industry has more strength over the weakness and more opportunity are waiting in to improve Thai automotive industry in the futures. From what paper illustrate, we could conclude that Thailand is now become automotive production hubs in ASEAN.
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