Thai Auto Makers Expect Post-Disaster Production Rebound

The Thailand Automotive Institute predicts auto makers in the country will produce more than 3 million units by 2015.

But that depends on whether the region experiences natural disasters like the earthquake and tsunami that ravaged Japan a year ago, followed months later by severe domestic flooding.

TAI Vice President Tasana Piriyaprut tells a seminar in Bangkok about 1 million units of the 2015 output would be for the local market and the rest for export, The Nation newspaper reports.

The prediction prompted Achana Limpaitoon, president of the Thai Autoparts Manufacturers Assn., to say the sector is preparing to spend more than TB100 billion ($3.3 billion) on parts production in response.

The Thai National News Bureau reports Achana announced the parts industry plans to meet auto makers’ increased demand by expanding its current workforce of 450,000 by 30,000-40,000.

Tasana says with the supply chain returning to normal after last fall’s devastating floods, auto production could reach 2 million units this year, followed in 2013 by up to 2.6 million – the industry’s current capacity. He says builds likely will reach 3.1 million by 2015.

This year’s capacity is led by Toyota, with 700,000 units; Mitsubishi, 400,000; Ford-Mazda Auto Alliance, 300,000; Nissan, 240,000 and Honda, 240,000.

The Nation quotes Tasana as saying pickup trucks’ share of Thailand production fell from more than 70% to 62% in 2011.

Limpaitoon tells the seminar that with the 3 million-unit forecast, her association will ask the government to revive its plan to build a TB10 billion ($327.1 million) auto-parts testing center. She says such a facility would strengthen the Thai industry’s competitiveness and restore investor confidence.

“We are preparing to discuss with both the government and the private sector the possibility of reviving the plan,” she says. “It's time Thailand had its own testing centers.”

While large companies have their own research-and-development departments as well as testing centers, small- and medium-size parts suppliers are suffering from a lack of testing facilities, Limpaitoon says.

Achana says the testing center at Bang Pu, managed by the Thailand Automotive Institute under the Industry Ministry, is overloaded and most small- and medium-size enterprises send finished parts to be tested in Japan, resulting in higher costs and longer delivery times.