The Federation of Thai Industries (FTI) is confident the country's automotive output will hit the 2-million-unit mark this year -- a level last reached five years ago.
The FTI said robust production will be driven by an accelerating market.
Output reached an all-time high of 2.46 million units in 2013, propelled by massive back orders after the tax rebate scheme for first-time buyers expired in 2012, when some 2.45 million units were produced. In those two years, Thailand was the ninth-largest car producer in the world, but has since dropped to 12th place.
Surapong Paisitpatanapong, spokesman for the FTI's automotive industry club, said it increased its 2018 output projection, particularly as the club's domestic car sales projection rose from 870,000 units to 900,000 after witnessing positive sentiment at the end of last year.
"The country's economy is mainly driven by government policy, thanks to new infrastructure projects and the Eastern Economic Corridor scheme, as it expects to attract new private investment in 2018," he said. "Thailand's export and tourism sectors remain strong contributors to GDP, projected to grow by 3.8-4.0% in 2018."
But Mr Surapong said the country's car exports are expected to drop by 3.48% to 1.1 million vehicles this year because of the introduction of tighter measures in many countries.
Vietnam tightened inspections for all imported cars at its sea ports earlier this year after an import duty for Thai-made vehicles was eliminated under the Asean Free Trade Area.
"Vietnam imports 40,000 to 50,000 Thai-made cars annually, but many car manufacturers in Thailand have yet to export vehicles there [this year] because of this non-tariff barrier," he said. "The club thinks Vietnam is trying to protect its automotive industry, which has car assembly capacity of 200,000 units per year."
Mr Surapong said the situation in the Middle East is improving, as oil prices have recovered to above $60 per barrel. But that has led governments in those countries to increase value-added tax for all products, including cars, which could put people in the region off from buying cars made in Thailand, he said.
In a related development, the club reported the automotive industry in 2017 saw car production rise 2.28% to 1.99 million cars.
