Thailand poised to Surpass Car Production target

The last 12 months have been a golden opportunity for the Thai automobile industry, driven by strong exports demand and first-car populist program. The number of cars and pickup trucks produced in Thailand in 2013 could jump to 2.7 million from the earlier targeted 2.5 million, according to the Thai Automotive Industry Association TAIA.

TAIA President Piengjai Kaewsuwan, cited by MCOT News agency, said Thailand’s auto manufacturers are moving ahead with production capacity to meet the demand for 1.25 million cars following orders received by buyers encouraged to purchase their first vehicles using the government’s first car scheme.

The 2.7 million level increased from the previous target of 2.5 million units, set before the first car scheme began, she said. Some 700,000 workers are needed for the entire supply chain of auto production processes from vehicle manufacturers to spare parts retail stores, according to the Thailand Automotive Institute.

Thailand’s automotive industry sees 2012 as a turnaround year of explosive growth

Manufacturers are confirming their confidence in the country as a leading global production hub. New investments are springing up and the domestic sales market sizzles with invigorated demand, including heightened interest in eco-cars.

Automotive investors in Thailand will certainly see themselves in the right place at the right time as the 10 member countries of the Association of Southeast Asian Nations form the barrier-free ASEAN Economic Community in 2015, creating a highly lucrative single market with 600 million consumers, said earlier Thailand Board of Investment

About half of them, some 350,000 persons, will be employed in car manufacturing. However, Ms Piengjai said small and medium-sized enterprises producing spare parts will face a lack of skilled workers who wish to work for bigger companies, or competitor auto manufacturing companies due to better opportunities and remuneration packages.

The TAIA president said the association is encouraging related agencies to produce more qualified skilled workers for the auto industry. As a result, all auto companies should apply automation systems for car manufacturing processes in order to depend less on human labour.

Back on the Road to Top 10

The Federation of Thai Industries projects that annual production of Thailand’s automotive industry will pass 3 million units from 2017, and the Thailand Automotive Institute is even more optimistic by predicting that mark will be hit sooner in 2015.

With its good fundamentals and untiring optimism, the Thai automotive industry is now back on track to enter the top 10 of global producers in a few years. Thailand slipped temporarily to 14th place last year as the flooding crimped output in Q4. The country is expected to return easily to the 12th spot during 2012 as production shifts back into high gear. The Ministry of Industry sees automobile production soaring over 30% this year to reach 2.1 million units, fueled by rising demand and the clearing of the flood-related Q4 backlog.

According to Kasikorn Research, 2013 will be another record-breaking year for the Thai auto industry.

KResearch expects this will be another promising year for the Thai automobile industry as carmakers plan to ramp up production for export orders. As a result, it expects that car exports will again hit a record high of perhaps 1.23 million to 1.29 million units, up 20-26 per cent year on year.

This increase will support domestic car sales that may contract by 2-7 per cent to between 1.34 million and 1.41 million units, because much car demand has already been absorbed by the first-car-buyer programme.

“Because of this, domestic car sales in 2013 may decline from those seen in 2012. Nevertheless, an expected increase in car exports should help offset smaller domestic demand and bolster overall auto production to a new high of 2.5 million to 2.6 million units, thus rising 5-9 per cent year on year,” the centre said.

Sources via Car production this year likely to increase to 2.7 million | MCOT.net., BOI of Thailand, The Nation