FTI: Automakers feel pinch
Could take 5 years to recover to normal
published : 21 Aug 2020 at 04:00
newspaper section: Business
writer: Lamonphet Apisitniran
The battered Thai car industry may take five years to recover to pre-pandemic levels, once a vaccine is developed and if the country faces no new outbreaks, says the Federation of Thai Industries (FTI).
"Car production will take a long time to come back to normal because Thailand has depended on exports accounting for nearly 50% of production," said FTI vice-chairman Surapong Paisitpatanapong, also spokesman for the group's automotive club.
Though Thailand has managed to successfully curb local disease transmissions, high infection rates continue in many countries, with some encountering a second round of outbreaks.
The global economy has weakened, affecting people's purchasing power. This has reduced demand for cars domestically and overseas, said Mr Surapong.
FTI maintains its estimate for 2020 car production in Thailand of 1.3-1.4 million units because factories have reopened, following the easing of lockdown measures.
Mr Surapong is optimistic about a car industry recovery because it has weathered other crises before, such as when the Thai automotive business survived the Asian financial crisis of 1997.
"Car production during that period dropped to 550,000 units, but we increased to 2 million units by 2012," he said.
FTI reported Thailand's total car production in July decreased by 47.7% to 89,336 units from June, mainly attributed to the Covid-19 impact and subsequent weak purchasing power.
From January to July, car manufacturing decreased by 43.7% year-on-year to 695,468 units.
However, Thailand's domestic car sales in July increased by 2.2% to 59,335 units from June, though it was a 24.8% decrease compared with the same period last year.
"Car sales in the country increased a little because of easing of the lockdown measures and the Bangkok International Motor Show," said Mr Surapong.
For export markets, sales in July dropped to 49,564 units, a dip of 39.6% from June and a decrease of 32.5% year-on-year, following the economic slowdown.
Sales in Europe dove by 39.5%, in the US they decreased by 23.8%, Japan by 20.1% and Brazil by 38.9%.
From January to July, car exports dropped by 37.6% year–on-year to 400,114 units, with export value of 216 billion baht, a decrease of 33.3% year-on-year.
- car production
- car sales