Toyota to operate 'at half capacity'

"Around 40 per cent of our pickup exports go to Australia, where demand has plummeted as a result of the global financial crisis. We shall have to reduce our production target every month in the first quarter," said a company executive who asked not to be unnamed.

As production usually falls dramatically in April because of the holidays anyway, TMT may make only 10,500 units that month, he said.

TMT has three plants producing pickups - one on the Gateway Industrial Estate, one at Samrong and one at Ban Po -  with combined production capacity of 300,000 units per annum.

It will also cancel one shift at its passenger-car plant next month to combat rising inventory in the market, though it has no policy to lay off permanent staff, having let around 1,000 subcontracted workers go last month. "We will reallocate existing personnel among our plants to ease the pressure," the source said.

Last week, carmakers revised down the total production to 1.08 million units this year, from 1.4 million last year due to poor outlook in both domestic and international markets. The number of units for export is expected to drop more sharply than in the domestic market.

Yongyuth Mentaphao, chairman of the Federation of Thailand Automotive Workers Unions, said the industry was in a worrying situation. Isuzu is also reducing production of pickups until March.

He said he had scheduled discussions with the Labour Ministry on Wednesday to prepare measures for unemployed automotive workers if the market worsened.

Yongyuth foresees that automakers may lay off workers in the second quarter if the situation does not improve. He said the likelihood was high, with workers at Toyota reporting the company would soon be down to one shift, as Isuzu already was.

Toyota Thailand has laid off 3,000 of its 5,000 subcontracted workers, and Honda has sacked 700. "As car sales slow, inventory is piling up, and auto-makers have to cut production," said Yongyuth.

He said the federation was particularly concerned with the health of General Motors' operations in Thailand as Japanese firms were more likely to sustain production even if sales dropped.