The Federation of Thai Industries (FTI) is confident that the export value for the automotive industry will hit 1 trillion baht in 2018 for the first time after healthy shipments in the first quarter.
On Wednesday, the FTI's automotive industry club reported that total shipments in the first quarter rose by 3.1% to 238.37 billion baht, including vehicles, car parts and all motorcycle products.
Completely built-up (CBU) cars made up 64.3% of the total value from January to March at 153.21 billion baht, up 3.7%. Export volume rose by 3.8% to 295,230 units in the first quarter.
Surapong Paisitpatanapong, the club's spokesman, said overall export sentiment is healthy, though some car products and motorcycle components remain in the red.
"The club is confident that CBU cars will drive the industry to hit the ambitious target we have been striving towards for the past several years, 1 trillion baht," he said. "With the growth in shipment volume, we believe the industry can achieve our full-year projection of 1.1 million vehicles in 2018."
Last year, total shipments fell 0.08% to 940.57 billion baht because car exports dipped 4.1% to 1.14 million units.
Since the early 1960s, Thailand has laid out automotive policy as a key pathway to developing the country's economy and creating new local labour. Every successive government's policies have been aimed at attracting new investment and expansion.
There are 17 carmakers and seven motorcycle makers among 648 auto parts makers in the Tier 1 level and roughly 1,700 suppliers in the Tier 2 and 3 levels.
The overall industry employs 690,000 in the country, said the Thailand Automotive Institute.
In 2017, Thailand was ranked 12th globally in terms of vehicle production and saw the largest output in Southeast Asia, with 1.988 million vehicles, up 2.3%.
In light commercial vehicle production, which mainly comprises pickup trucks, the country ranked fifth globally last year, producing 1.148 million trucks, up 2.8%.
But Mr Surapong said external risks exist that could impact the country's automotive exports, such as the trade row between the US and China.
"The club is concerned about this, while car shipments by continent remain in the red for Asia, Europe, North America, and Central and South America," he said. "But the sentiment for exports to the Middle East seems to be recovering, with 28,188 vehicles shipped in the first quarter, up 23%, marking an increase for five straight months."
At home, the club said car sales in the first quarter rose by 12.6% to 237,093 units, with sales in March alone increasing by 12.1% to 95,082 vehicles.
Mr Surapong said the market in the first quarter was driven by new models that were launched in the period and the Bangkok International Motor Show, which saw 36,587 units booked.
"Meanwhile, the retail prices of cars are more affordable for buyers, and other positive factors are beefing up the car market such as new private investment, new government infrastructure projects, new measures to alleviate poverty and a massive number of tourists in the country," he said.
For motorcycles in the first quarter, the club reported a slight rise of 0.7%, with 465,093 units sold.
As a result of healthy growth in both export volume and domestic sales, car output in the first quarter grew by 11.2% to 539,690 units. Production in March alone marked the highest volume in 56 months at 195,257 units, up 9.2%.