Suzuki to Close Thailand Plant by End of 2025 Amid Weak Demand and Strong Baht

Japanese automaker Suzuki announced on June 7 that it will cease production of four-wheeled vehicles in Thailand by the end of 2025 and close its factory in Rayong Province. The main reason is the declining profitability of export products due to weak demand for compact cars and the strengthening of the baht. Local sales and after-sales service will continue to operate. Vehicles produced in Thailand include the Swift, Ciaz, and Celerio, and were exported not only domestically to Thailand but also to the Philippines, Vietnam, Central and South America, and other regions. Going forward, vehicles produced in Japan, India, and Pakistan will be supplied to Thailand and other export countries.

Suzuki Thailand started production in March 2012 and reached its peak production in 2016. However, in 2023, production fell to 7,579 units, approximately 87% lower than its peak. Sales also decreased by about 73% compared to the peak in 2013, reaching 10,807 units, and exports plummeted by about 97% compared to the peak in 2015, reaching only 1,272 units. Following the closure of the Thai plant, Suzuki plans to assist some employees in finding new jobs and support their transition to the motorcycle and outboard motor factory in Pathum Thani Province.

Recently, the baht has reached its highest level since July 1997, reaching 4.18 yen per baht in early August. The South Korean won has also reached its highest level in eight years. The strengthening of Asian currencies has been attributed to economic growth in Asian countries and widening interest rate differentials. There are analyses suggesting that Japan's economic power is declining compared to Asian countries. With the decision to close the Thai plant, Suzuki is expected to face inevitable decreases in production and sales volume. It remains to be seen whether Suzuki can overcome these challenges and restore its competitiveness.