Aust may make auto parts in Thailand

Board assistant secretary-general Vibulphan Juntarashote said Australian companies had suggested the move during a board road show to Sydney, Melbourne and Geelong. Jewellery and agricultural companies expressed the same intention, she added.

They are studying the feasibility of a move and savings that can be made in production and labour costs, which are as much as 30 times lower than in Australia.

Under the FTA, the products can be exported back to Australia. Any investment could break even within two years.

"Most of them know Thailand, and they understand the political situation and that the slowing economy is temporary only. Thailand still has a competitive edge in production costs over other countries such as Vietnam, which has transport limitations," she said.

Next month, Australian auto-parts manufacturers will visit Thailand to meet counterparts. The board will return to Geelong to persuade as many as 400 auto-parts manufacturers of the benefits of Thailand.

Last year, Australian companies sought broad tax incentives and other privileges for 22 projects with a combined value of Bt3.29 billion. In the first five months of this year 10 Australian projects worth Bt902 million in investment submitted applications for benefits.