The analysis of Thailand automotive cluster development

Industrial cluster or industrial agglomeration represents the geographic concentration of interconnected organizations. Literatures claim that industrial clusters are crucial to the increase in productivity and competitiveness of the companies and community where they exist. For decades, the Thai government has been focusing on promoting the development of industrial clusters, with beliefs that it could be an effective way to generate external economies and reduce transportation costs on all scales of enterprises, thus, enhance competitiveness of the country. Though some clusters have been successfully developed in Thailand, it is undeniable that many of the development attempts did not result in satisfactory outcomes. This paper preliminary discusses about different types of industrial cluster developments and how the government provide support in their development processes. Then, it discusses, more specifically, about the development of automotive cluster of Thailand and how it differs from the development of other industrial clusters in some developed economies. In addition, the interview cases with automotive manufacturers and the main automotive parts suppliers are presented. In conclusion, the authors provide comments about how the cluster development could be unsuccessful and how the cluster development in Thailand could be enhanced.