ILO study reveals skills development and responsible business conduct needs in Thailand’s automotive sector

Bangkok (ILO News) - Thailand's automotive manufacturing sector must adapt to evolving skills requirements and strengthen the integration of responsible business practices into its operations as the industry rapidly transitions towards electric and low-carbon vehicles according to a new study by the International Labour Organization (ILO).

The report, Navigating transformational changes and transitions: The skills development and employment landscape in Thailand’s automotive manufacturing sector reveals a pronounced need to bridge the gap between current skills and emerging demands as Thailand’s automotive industry pivots towards becoming a central hub for electric vehicle manufacturing in the ASEAN region.

One of the key insights from the study is the evolving employment landscape within the automotive sector as customer preferences for environmentally friendly vehicles and the integration of new technologies reshape job roles and skill requirements. There is a growing demand for digital skills and expertise in green technologies, particularly in areas such as battery production and vehicle automation software. To manage this transition effectively, ongoing skills development is essential to support a more digital and automated manufacturing environment.

The report emphasizes that existing training and education programmes are insufficient to meet the sector's emerging demands. To bridge this gap, it is necessary to not only enhance technical skills but also to foster a culture of continuous learning and adaptability, crucial for maintaining competitiveness in a global market.

“By developing industry-ready workers with higher technical and specialised skills, industry expansion and growth targets can be better achieved. This will improve prospects for accessing employment with better incomes and livelihood opportunities. Furthermore, ensuring access to reskilling and upskilling opportunities is critical to supporting just transitions for those workers who are, or will be, affected by increased automation and digitization and a shift to a greener and sustainable economy,” said Xiaoyan Qian, Director of the ILO Decent Work Technical Support Team for East and South-East Asia and the Pacific and Country Office for Thailand, Cambodia and Lao People’s Democratic Republic.

Moreover, the study underscores the importance of integrating responsible business conduct into everyday operations and training programmes to ensure that all employees, regardless of their origin, understand and implement these practices. It highlights the need to include the 10 per cent of the automotive industry workforce comprising migrant workers in these skills initiatives to prevent disparities in rights protection and access to decent work.

The report also delves into the demographic shifts within the industry, noting that older workers require additional support to integrate into the technologically advancing environment. Tailored training programmes that cater to different learning paces and styles are essential for ensuring that all employees can contribute effectively. 

“As the industry pivots towards more sophisticated and sustainable practices, responsible business conduct becomes imperative,” said Gizem Karsli, Project Manager of the Skills Development and Responsible Business Conduct for Transition initiative funded by the Government of Japan. “This comprehensive approach not only mitigates risks associated with potential violations but also positions companies to attract investment and partnership opportunities by demonstrating a commitment to sustainability and ethical conduct,” she added. 

Thailand’s automotive manufacturing sector is the country’s second-largest export sector, accounting for 14 per cent of total exports during the first nine months of 2023 and valued at 1.02 trillion Thai baht (approx. US$27.7 billion). Thailand is also the largest automotive producer and exporter in the ASEAN region and the eleventh-largest globally, producing more than 2 million units annually.