Auto sector set to hit 3m output target by 2015

Auto & Audio March 07, 2012 00:00

By Nalin Viboonchart
The Nation

7,848 Viewed

Investment of more than Bt100 bn eyed for parts production


Thailand’s automotive industry is likely to achieve its annual production target of 3 million vehicles by 2015 if there are no further disruptions from natural disasters, said Tasana Piriyaprut, vice president of the Thailand Automotive Institute (TAI). 
Meanwhile, the sector is preparing to invest more than Bt100 billion in auto-parts production in response to a estimate that annual car output will exceed 3 million units by 2020, said Achana Limpaitoon, president of Thai Autoparts Manufacturers Association.
Of total output, about a million cars will be for the domestic market and the rest for export markets such as Japan, North America and Europe.
For this year, the forecast for auto production is as high as 2.6 million units, Tasana said yesterday during a seminar held by UBM Asia (Thailand). 
Many leading carmakers in Thailand are returning to full capacity after the floods last year disrupted production and supply chains. This year, the TAI forecasts that auto-makers in Thailand will produce 2 million vehicles, against a combined production capacity of 2.6 million units. 
“The combined auto-production capacity in Thailand by 2015 is likely to reach 3.1 million units,” she said. 
According to the TAI’s data, Toyota’s production capacity will be 700,000 cars in 2012, followed by Mitsubishi with 400,000. Mitsubishi will launch its eco-car, the Mirage, in Thailand this year. The capacity of the Auto Alliance, which makes Ford and Mazda vehicles, will be 300,000 units, while Nissan and Honda have similar outputs of 240,000 each. 
Tasana said the market for auto-makers in Thailand was driven by increased demand for passenger cars, including eco-cars, which both Nissan and Honda are now marketing. Mitsubishi and Suzuki are expected to bring out their own models this year. 
Pickup-truck production has declined as a proportion of the whole from more than 70 per cent to 62 per cent in 2011, replaced by passenger cars and eco-cars. 
Another factor is growing consumption in Asean, particularly Indonesia, with its 200-million-strong populace, Tasana said. The Asean Free Trade Area and the pending implementation of the Asean Economic Community (AEC) are also supporting factors for Thailand’s auto industry, she said. 
The automotive industry in Thailand employs more than 500,000 workers. First-tier producers encompass about 630 companies, while the second- and third-tier firms number about 1,700. The top 10 automotive manufacturers in the world all have manufacturing facilities in Thailand, she said. 
Masao Takagi, former secretary-general of the Japanese Chamber of Commerce Bangkok (JCC), said that despite the risk factors, such as natural disasters and the increase in the minimum wage, the looming implementation of the AEC made Thailand attractive and suitable for automotive investment. 
Japanese companies are now improving productivity and controlling worker numbers in a bid to adapt to increased costs. However, they have asked the Thai government to accelerate the implementation of flood-prevention plans to ensure Japanese investors that Thailand’s industrial sector will never again be dealt the kind of blow they received last year.