Aapico eyes sector recovery

Aapico eyes sector recovery

SET-listed auto parts maker Aapico Hitech Plc (AH) forecasts Thailand's automotive industry will recover next year, with vehicle output increasing by 10-15% to 2.2 million units.

President and chief executive Yeap Swee Chuan said positive factors included economic improvement, the launch of new car models and new investments in the eco-car project.

"Thai consumers are more confident to spend," he said.

Toyota will launch its new pickup truck here. Moreover, new eco-car applicants will possibly start production in Thailand from 2015-17 after receiving Board of Investment approval.

This year, projected vehicle output has been revised down to 1.9 million from 2.2 million units compared with 2.457 million last year and 2.453 million in 2012.

The Federation of Thai Industries said vehicle production dropped by 25.9% year-on-year in the first 10 months to 1.57 million.

Domestic car sales stood at 719,171, a sharp 36% decline year-on-year, while exports also fell by 1.25% to 932,365, but export value rose by 3.08% to 440 billion baht.

Thailand has dropped four places from the world's ninth-largest car exporter last year to 13th now.

Mr Yeap expects revenue at Aapico next year will grow at the same pace as the industry, but this year's revenue is expected to decline by 11.8% to 15 billion baht.

In the first nine months, Aapico posted a net profit of 353 million baht, down by 43.3% year-on-year, on revenue of 11.6 billion, down by 8.4%.

The first-time car buyer scheme drove Aapico's revenue to 16.8 billion and 17 billion baht in 2012 and 2013, respectively.

About 62% of Aapico's revenue comes from auto part sales to car makers and the rest from car distribution. Of auto part sales, 44% are from Isuzu; 14% from AutoAlliance, a joint venture between Mazda and Ford; 13% from Nissan; and the rest from other car companies.

Aapico has 11 factories including in Ayutthaya, Samut Prakan, Chon Buri and Rayong. It uses 70% of its production capacity now, but expects that figure to rise to 80% next year.

The company is also a car dealer for Mitsubishi and Ford in Thailand and for Honda in Malaysia.

Car sales in Malaysia have surged 45% this year, but in Thailand they have fallen by 9%.

The firm also runs two auto parts factories in China to supply car makers there including SAIC Motor, General Motors and Wuling Automobile.

Mr Yeap said Aapico was looking for potential partners to invest in India while studying the possibility of entering the Indonesian and Philippine markets.

AH shares closed yesterday on the SET at 14.50 baht, down 20 satang, in trade worth 1 million baht.

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