Domestic auto sales fail to reach growth targets
analysts have lowered the projected growth rate of domestic auto sales this year to 3 per cent from the previously estimated 5-8 per cent because of several negative factors, a leading maker of modified vehicles said yesterday.
Sompong Phaoenchoke, managing director of Thai Rung Union Car (TRU), said total domestic auto sales for the first half of the year had come in at 334,776 units. The new forecast sales figure for the full year is 723,415 units, just 3 per cent higher than 2005. Since March, overall industry sales have been on the decline, reflecting concerns over fuel prices and poor economic sentiment. Sales of vehicles in the second quarter showed a quarter-on-quarter fall of 4 per cent, though 9 per cent higher than the same period last year. Sompong revealed that TRU's sales of modified vehicles in the first half of the year reached Bt89 million, compared to Bt682 million collection registered for the whole of last year. In the first six months of this year, TRU posted Bt1.21 billion in overall revenue, against Bt3.05 billion for the whole of last year. The number of modified vehicles sold in the period averaged 60 per month, compared to 400 to 500 units per month last year. Hence, the company is targeting total revenue of between Bt2.6 billion and Bt2.7 billion this year. However, he said the company's targeted revenue for the year from sales of OEM (original equipment manufacturing) parts was Bt1.2 billion, a 28-per-cent increase over 2005. "The company's net profit this year is expected to be lower than last year's Bt119.78 million, due mainly to a decline in modified-vehicle sales and a lower margin on OEM parts," said Sompong. But he is still optimistic that demand for auto parts will increase, with several foreign carmakers having identified Thailand as their auto-part production base. Riding this trend, TRU subsidiary Thai Auto Press, in its first phase of expansion, plans to spend about Bt100 million on its plant in Rayong to increase production capacity of pressed metal parts and plastic parts, used as raw material for auto parts. Sompong said this would be followed by a second-phase investment of about Bt600 million on purchasing land near the Rayong plant by mid-2007. Part of the funding will come from bank loans. Moreover, TRU plant to spend between Bt100 million and Bt120 million on purchasing new machinery for its other subsidiary, Thai Rung Tools and Dies, a producer of dies and jigs. The investment will be made in the final quarter of this year, and will enable a 30-per-cent increase in production.
Chalida Ekvitthayavechnukul The Nation
|
