Thailand Sets Vehicle Production Record, Eyes New Target

Thailand’s vehicle production passes 2 million units for a calendar year for the first time, with the government setting a new target of 3 million units by 2017.

Industry Ministry Permanent Secretary Vitoon Simachokdee says total production is expected to reach about 2.3 million units in 2012, including 1.3 million for the domestic market.

Press reports indicate a record 252,165 vehicles were built in October, up 410% from a year ago when massive floods swamped manufacturers and parts suppliers. That put the 10-month production total up 48.0% from year-ago to 1,975,783 units.

Automotive Industry Club spokesman Surapong Paisitpatanapong tells the Bangkok Post October exports rose 79.7% from like-2011 to 98,284 units, with year-to-date shipments up 21% to 840,149 units.

Thailand is the biggest hub for pickup manufacturing, with the vehicles exported to 130 countries.

About 2.5 million vehicles are expected to be built next year, with the numbers driven higher in part by the demand from the government's tax-break scheme for first-time buyers that will see some deliveries pushed into 2013.

Vitoon tells The Nation newspaper the Thailand Automotive Institute will offer the ministry a development plan for the auto industry that will run through 2016. It will include construction of 8 billion baht ($260.5 million) parts testing center and proving ground.

He says the automotive sector is one of the country's major strategic industries and the ministry has played a vital role in establishing the policy and strategy for the integrated development of the automotive industry, leading to tremendous annual value-added benefits for Thailand.

“These benefits include growing exports, increased employment, technological development and many activities to boost the potential development of the automotive industry and related industries all through the supply chain,” Vitoon is quoted as saying.

The automotive sector employs more than 800,000 workers.

Federation of Thai Industries Chairman Payungsak Chartsutipol tells The Nation 2012 marks a golden year for the Thai automotive industry as it exports pickups, eco-cars and auto parts worth more than TB1 trillion ($32.5 billion), topping all other exports from Thailand.

“The government has set the policy and direction that have been implemented by the private sector to enhance the industry’s competitiveness in the global market, making Thailand one of the world's top 10 automobile-production bases,” Payungsak says.

The Bangkok Post says the parts-testing center and proving ground has been delayed for nine years by a dispute between the government and the private sector over who should be responsible for the huge investment. As a result the cost has doubled from an earlier estimate of TB4 billion ($130.25 million).

“We've not yet concluded the project investment structure, be it in the form of a single-party venture or a co-venture between the government and the private sector,” Vitoon says.

An industry source tells the newspaper the government should cover most of the investment with the project carried out within the car industry's 5-year master plan ending in 2016.