Thailand is gearing up to voice its concerns about Labor’s fresh car pollution standards at the ASEAN conference happening in Melbourne this week. Australian manufacturers are staring at whopping penalties amounting to $639 million for vehicles produced in Thailand, making this a pressing issue on the international trade front.
A detailed analysis conducted by the Federal Chamber of Automotive Industries (FCAI) suggests that Australia could face significant trade repercussions due to its new vehicle efficiency standards.
Breaking down the numbers, the FCAI analysis predicts that Ford could face fines of nearly $216 million for its vehicles in 2025, based on 2023 sales and the proposed fines of $100 per gram per kilometre that exceed the government’s target. These penalties would primarily affect cars built in Thailand for the top seven manufacturers.
Thailand, the second-largest vehicle exporter to Australia after Japan, produced a staggering 264,200 vehicles for the Australian market in 2023 alone.
Labor’s proposed National Vehicle Emissions Standard (NVES), unveiled in February, aims to expand consumer choices in vehicles by encouraging manufacturers to sell more fuel-efficient and electric cars.
During a meeting between Thai officials and Toyota executives, Thai Industry Minister Pimpatra Wichaikul expressed concerns about the potential impact of Australia’s NVES on her country’s export market. She highlighted that Thailand currently exports approximately 260,000 cars to Australia annually and is the leading importer of pickup trucks from Thailand, constituting 48.25% of the total imports.
According to FCAI, Toyota could face fines of almost $160 million for its Fortuner and Hi-lux, while Isuzu might encounter fines of $113 million for its D-max and Mu-x utes.
FCAI CEO Tony Weber emphasised the broader implications of the proposed NVES, stating that more than 21% of Australian new vehicle sales are manufactured in Thailand. He warned of significant impacts not only on manufacturers and consumers but also on trade, tourism, construction, mining, and agriculture sectors.
Minister Pimpatra urged a transition period of “at least two to three years,” echoing concerns raised by manufacturers with Thailand’s Ministry of Industry. She pledged to escalate the issue to the Prime Minister, who will attend the ASEAN Summit in Australia.
Transport Minister Catherine King clarified that the NVES would apply to all vehicles supplied in Australia, irrespective of their country of origin. She assured that car companies could continue sourcing vehicles from any country, including Thailand, but must offer a broader range of fuel-efficient options to Australian consumers, aligning with global trends towards efficient petrol, diesel, hybrid, and electric vehicles.
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