Automobile production and sales grew significantly in the 1990s due to two major reasons. On the one hand, the appreciation of the Japanese yen in 1985 encouraged Japanese and part makers to expand their production in Thailand. On the other hand, the Thai government committed to liberalize the auto industry, the deregulation of the automobile industry in the early 1990s and the abolishment of the Local Requirement regulation in 2000. This significantly transformed the Thai automobile industry from a highly protected industry to a more liberalized one