It's hard to imagine that Thailand, the market that a year ago was a beacon of opportunity for global automakers, could spark such a rapid economic spiral throughout Southeast Asia. But it was the loss of confidence in the Thai baht last summer that led to high inflation, mass bankruptcy and a halt to new construction. That forced virtually every manufacturer in the nation to try to find ways to export product.

Auto sales in 1997 plunged 38.4% in Thailand, where new vehicle sales peaked at 589,126 units in 1996. Industry analysts had predicted sales of 1 million units by year 2000, luring U.S. automakers to expand their Thai operations. But General Motors and Ford have scaled back construction plans, and Toyota, Nissan and other Japenese automakers with a heavy presence in the region temporarily shut down assembly lines in late 1997, reopening them in January with lower production. Thai vehicle sales still were falling in early 1998, with new car sales expected below 200,000 units for the year. Thai auto sales reportedly fell 75% in January.

Economists say market confidence in Thailand seems to be returning as the Thai government addresses financial problems. The baht has strengthened by more than 40% since January, with the stock market up 25% in the same period.