Thailand’s Board of Investment said recently it had approved a US$400 million investment by German tyre maker Continental to expand its existing facility in the country, which is the world’s second largest tyre producer after China. Continental intends to expand its tyre plant in Rayong Province and boost annual production by an additional 3 million high-performance radial tyres, mostly for export, reaffirming Thailand’s status as the world’s second largest tyre production base.
Continental has been manufacturing in Thailand for the last five years, using locally produced rubber and other raw materials, producing tyres for motorcycles, light trucks and passenger cars, including electric vehicles, BOI said in a statement.
The additional investment, including the construction of a new factory building, the extension of the existing plant, located in the WHA Industrial Estate Eastern Seaboard 4, and the installation of new machinery imported from Germany, will boost output at the site to 7.8 million tyres/year, and increase employment by 600 to a total staff of 1,500.
Thailand is a regional automaking centre for major companies and has recently been on a drive to court investment from big EV brands.
“Continental’s move demonstrates Thailand’s potential as a world-class production base for tyres featuring the highest quality standards, both in terms of safety and environmental considerations,” said Narit Therdsteerasukdi, Secretary General of the BOI. “This major expansion by Continental also reinforces Thailand’s status as an automotive industry hub, and reconfirms global investor’s confidence in Thailand.”
Continental Tyres (Thailand) was established in 2009 as a fully owned unit of Continental Group. Continental is the world’s fourth biggest tyre manufacturer.
Like Continental, most leading tyre manufacturers already have significant investments in Thailand, making the country the world’s second largest tyre production and export base, after China.
World-class manufacturers with production bases in Thailand include Michelin from France, Bridgestone, Sumitomo Rubber and Yokohama Tire from Japan, Goodyear from the US, as well as Zhongshe Rubber, Prinx Chengshan Tire, Linglong Tire, and Century Tire from China, adds BOI.
Since 2020, tyre manufacturers have filed with the BOI 41 investment applications for new tyre production projects, with a total investment value of over 112 billion baht, BOI said.
Thailand has long been a successful player in the global automotive industry, ranking 10th in the world and number one in Southeast Asia as a manufacturer in 2023.
Most leading makers of conventional internal combustion engine (ICE) cars and parts, as well as manufacturers of electric vehicles (EV) have operations in the country. They are attracted by government policies offering subsidies, tax breaks and other incentives, and by the country’s strategic location and supply chain, according to BOI.