Tier 2 auto parts suppliers will lead the next expansion of auto industry growth this decade in Thailand, predicts Khun Staphorn Kavtanon, secretary-general-board of investment for the Royal Thai government. He spoke recently with journalists in New York. Mr. Staphorn says the Thai economy registered positive gains in the first two quarters of 2000, which enjoyed a projected 50% growth in gross domestic product (GDP).

The auto industry is helping to pace the economic recovery. Mr. Staphorn forecasts production of 400,000 vehicles in 2000, compared to 588,000 in 1996 before the economic bubble burst. Last year, Thailand's automotive output was 218,000 units. Nearly half of 2000's production, or about 180,000 units, will be for export.

Mr. Staphorn says it will take three or four more years for his country's economy to return to pre-crash levels, when GDP ran around $180 billion. GDP in 2000 will be about $120 billion, he says. But beware: More than 40% of loans made by Thai banks — about $50 billion worth — are non-performing. The companies in default include 20 of Thailand's largest industries.