Thailand's Auto Industry Weighs Impact of Natural Disaster

From Bangkok Post

BANGKOK, Thailand — Thailand’s vehicle production next year could drop by 12 percent from the original projection to one million units due in large part to the economic impact of this week’s natural disaster, according to the Federation of Thai Industries (FTI).

For a start, there would be a negative impact on car demand in the six affected provinces, where consumers had more immediate priorities, said Surapong Paisitpatnapong, a spokesman for the FTI’s Automotive Industry Club.

He said that originally, the club targeted car production next year of 1.127 million units, up 25 percent from this year.

Surapong said that of next year’s original projected total, 690,000 units would be for domestic sale and 437,000 for export.

The forecasts were based on economic growth close to this year’s levels, along with a 9-10 percent rise in industrial activity, which would spur demand.

Before the disaster struck, the most recent reading of the Thai Industries Sentiment Index (TISI) for the automotive industry had improved sharply to 126.3 in November from 102.9 in October. Any reading above 100 is considered positive.

However, the auto parts and aftermarket sentiment index dropped from 120.0 in October to 105.0 in November because of higher excise taxes on some vehicle models and more expensive operating and marketing costs for new customers.

Surapong said that in the year to Nov 30, local automobile production (including pickup trucks) totalled 840,177 units, up 23 percent from the same period last year. Passenger car production was 275,536 units, accounting for 32.9 percent of the total.

Domestic sales through November were up 19 percent and exports rose 26.9 percent from the year before to 297,670 units.

However, production of large passenger cars with engine displacement from 2.4 to three litres fell by 1,039 units and output of cars with engines larger than three litres was off by 31 units.

Surapong said more consumers were now inclined to purchase medium-sized cars that were modified to have the capacity of large passenger cars.

In addition, station wagon production declined 63.7 percent to 3,107 units, partly because imported wagons were gaining more popularity.

A total of 2,616,438 motorcycles were produced in Thailand between January and November, 2004, up 20.8 percent from the previous year.

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