Major auto-parts makers are now running at almost full production capacity, reflecting the recovery in the automotive industry.
Apichart Lee-issaranukul, executive vice president of Thai Stanley Electric, a major manufacturer of lighting equipment for the automotive sector, recently said the company had utilised 85 per cent of its production capacity in December and 95 per cent in January.
"We've received orders for the next three months. So, we are likely to run our production capacity at not less than 90 per cent during that period," he said.
Thai Stanley Electric ran at 60-per-cent capacity in the first half of last year, while average capacity utilisation for the full year was 70 per cent.
Apichart expects capacity utilisation of 80-85 per cent this year as the economy continues to recover. The estimate is, however, contingent on there being no political violence.
"We expect the company's revenue for the 2010 fiscal year [ending this month] will decline by 10 per cent, which is better than the previous estimate of a reduction of 30 per cent from Bt8.26 billion in the previous fiscal year, because the global economy has recovered more rapidly than we predicted," he said.
The automotive industry is expected to produce 1.4 million units this year. However, if the political situation does not worsen, and the economy is at least stable, it is possible for the industry to produce up to 1.6 million vehicles during the year, he said.
If production does reach 1.6 million vehicles, Thai Stanley Electric will have to revamp its plant in Ayutthaya province, which was closed during the recession, he added.
Apichart said the company would invest Bt800 million to Bt1 billion in its new fiscal year to purchase moulds and machinery for new auto models.
Thai Stanley Electric has received orders for eco-cars from Nissan, Honda and Suzuki. It also manufactures lighting equipment for the Mazda2.
Verayut Kitaphanich, president of Somboon Advance Technology, the country's largest axle-shaft manufacturer, said the company had increased its capacity utilisation rate from last year's average of 70-75 per cent to 90 per cent in the first two months of 2010 thanks to the recovery in the automotive industry.
It saw the first sign of recovery last November.
Although the auto sector's recovery is driven by the Asian market, the company is keeping a close eye on the economic situation in the US and Europe, where the economic recovery is more fragile.
Somboon Advance Technology expects its revenue this year to grow by 25 per cent from last year's level. The company's 2009 revenue is forecast to be 25 per cent lower than in the previous year.
Siam City Research Institute said a research note that Somboon Advance Technology was likely to record a net profit of Bt188 million in the fourth quarter of last year, up 100 per cent year on year thanks to the auto industry's recovery and the company's efficient cost control.
Auto production in the fourth quarter was 342,000 units, which lifted the company's capacity utilisation to 70 per cent.
The institute forecast the company's net profit this year at Bt501.6 million, against an expected 2009 net profit of Bt312 million.
Sicco Securities forecast Thai Stanley Electric's revenue in the current quarter to grow by 5-10 per cent from the previous three months, due to new orders placed this month.
