Political Turmoil Battering Thailand’s Auto Industry

The political crisis gripping Thailand has seen truck makers reduce parts orders 70% as vehicle sales slow, the Thai Auto Parts Manufacturers Assn. says.

Honorary President Prasartsilp On-aht tells The Nation newspaper that dealers still can find buyers for small trucks, but the market for larger models is drying up.

As a result, he says, combined vehicle sales could fall below projections and production may slip from the 2.7 million units forecast this year to 2.55 million.

“Part makers are struggling to cope with the situation,” Prasartsilp says. “Small companies suffer the most.”

Meantime, caretaker Prime Minister Yingluck Shinawatra is urging all Thais to vote in Sunday's general election, saying the results would determine Thailand's future and offer a peaceful method to help end the ongoing political conflict.

The opposition People’s Democratic Reform Committee is boycotting the election and protest leader Suthep Thaugsuban tells the Bangkok Post he will try to completely shut down Bangkok, the capital, on election day.

Honda Thailand cites the political turmoil in predicting its car sales will fall 15.6% this year to 180,000 units.

“Shrinking demand after the government's first-time car-buyer tax rebate expired in late 2012 and the political standoff will wallop car sales this year,” Executive Vice President Pitak Pruittisarikorn tells the Bangkok Post. “Honda is closely monitoring the political situation on a daily basis, and just a few customers now visit Honda showrooms.”

The Federation of Thai Industries reports confidence in the business performance of small and medium enterprises has dropped to an all-time low due to the political unrest.

Vice Chairman Visit Limprana says of the 350 SMEs polled Jan. 17-22, 70% reported confidence levels below 50%. This is the lowest level ever and none of the respondents expected their business to do better in 2014 than in 2013.