(Adds details on sales estimates, size of market, contribution to GDP)
By Pisit Changplayngam
BANGKOK, July 29 (Reuters) - Auto sales in Thailand are expected to fall 31 percent in 2014 after months of political unrest, but sales could recover in 2015 as the domestic economy and consumption improves, Toyota Motor Corp's Thai unit said on Tuesday.
Domestic auto sales are projected to fall below earlier estimates to 920,000 vehicles this year and should rise 8.7 percent to 1 million next year, Kyoichi Tanada, president of Toyota's Thai unit, told a news conference.
In January, the company had forecast a 13.6 percent drop in 2014 auto sales to 1.15 million. The weaker-than-expected sales estimate was due to the political situation in the first half, Tanada said.
"It's a psychological impact that hurts the purchasing decision. For the second half, with a positive political direction and a recovery of the domestic economy, the purchasing decision should improve," he said.
The Bank of Thailand has lowered its 2014 GDP growth forecast to 1.5 percent and expects stronger 2015 GDP growth of 5.5 percent.
Thai consumer confidence picked up for the second straight month in June after the military seized power on May 22 in a bid to restore order and revive the economy.
The Japanese carmaker has cut its domestic sales target this year to 330,000 cars from 400,000 and expected its car exports to increase 1 percent this year to 433,000, according to Tanada.
In the first half of 2014, domestic auto sales slumped 40.5 percent to 440,911 vehicles from a year earlier.
The industry, which accounts for about 11 percent of GDP, has seen domestic sales falling since May 2013 following the end of a government subsidy for first-time car buyers in 2012, when sales hit a record. (Writing by Orathai Sriring and Viparat Jantraprap; Editing by Matt Driskill)