Upskilling and reskilling needs in Thailand’s automotive sector

Upskilling and Reskilling Needs in Thailand's Automotive Sector

The automotive sector is the cornerstone of Thailand’s economy and plays a critical role in providing employment opportunities for a wide range of skill sets. However, as automation and digitalization reshape the industry, the educational and skill requirements are rapidly advancing to align with new occupations, consequently placing the current workforce at a disadvantage. 

Current Occupations and Skills:

The automotive industry encompasses over 2,200 companies of different occupation in three major tiers. Tier-1 includes manufacturers that produce high-quality parts that satisfy vehicle manufacturers’ specifications, serving both the original equipment manufacturer (OEM) and replacement equipment manufacturer (REM) markets. Tier-1 manufacturers typically employ high-skilled employees who possess advanced technical and engineering expertise as required to work with cutting-edge technology that further enhances their high-quality products. 

In contrast, Tier-2 and Tier-3 manufacturers, primarily Thai-owned SMEs, rely on a larger manual labor force due to lower technology investments. They tend to serve niche roles such as supplying raw materials, producing parts for Tier-1 operators, or exclusively manufacturing for the REM market. Currently, there are around 1,500 Tier-2 and Tier-3 operators that contribute products to the automotive sector. These products fall into two main categories known as ‘genuine’ and ‘imitated’ parts: one meets vehicle manufacturers’ standards, while the other is of lower quality but also less expensive. Since Tier-2 and Tier-3 companies have lower-quality reputations and less specialized products, their employees are often low- to medium-skilled with basic education or general training, which they complete at a separate institute or through on-the-job training [1]

Upskilling and Reskilling the Workforce:

Emerging technologies, such as electrical vehicles (EVs), autonomous cars (ACs), and robotic assembly machines are both creating new job opportunities and phasing out of others. Skills related to EV technology, software development, data science, and robotics are expected to grow in demand while jobs involving tasks that can be completed with simple computer commands will decrease. Furthermore, with the increasing awareness and concern for environmental issues, companies are shifting focus to sustainability, which will alter the materials and practices used in the traditional manufacturing process. 

To address the shifting job and skill pool, Thailand’s government and companies must invest in upskilling and reskilling the existing workforce. This can be done through collaboration between the government and automotive industry stakeholders by identifying specific skill gaps and emerging trends within the sector. After identifying key areas of concern, funded programs can be established along with incentives for companies to invest in employee training and development. These employee training programs should be tailored to the needs of each subindustry and accessible for employees at all skill levels to promote maximum efficacy. Encouraging a culture of continuous and lifelong learning is key to ensuring employees remain competitive in the industry. 

Advocating for Fair Labor Rights:

While the automotive industry transforms, fair labor rights must be observed closely to prevent an increase in job displacement and mistreatment. Efforts should be made to ensure that new policies and expectations do not harm workers’ physical or mental health, including, but not limited to, the right to negotiate fair compensation for the advanced skills and responsibilities required in new roles. Thailand’s automotive industry has a bright future, and with the right strategies in place, it can continue to be a driving force in the country’s economic development.

If you found this article useful, please remember to ‘Like’ and share on social media, and hit the ‘Follow’ button never to miss an article.

About the authors:  Daniel Lindgren is the Founder of Rapid Asia Co., Ltd., a management consultancy firm based in Bangkok specializing in evaluations for programs, projects, social marketing campaigns, and other social development initiatives. Lillian Chiang, a co-author, working at Rapid Asia as a project assistant intern.