Regulatory relief for car makers in sight

Regulatory relief for car makers in sight

Commerce minister meets top executives

The government has pledged to tackle what it deems obstacles to trade and investment as it seeks to spur car shipments in the second half.

The plan includes an easing of rules and regulations on labour and wages and support for expansion into new markets by the Thai car industry.

Commerce Minister Chatchai Sarikulya, who yesterday met high-ranking executives of car companies such as BMW Group Thailand and Toyota Motor Thailand (TMT), said a working panel would be jointly set up to look at ways to stimulate Thai automotive shipments and address export-related issues.

Comments and suggestions from the panel will be submitted to the international trade promotion committee chaired by Prime Minister Prayut Chan-o-cha.

Thailand shipped US$7.93 billion worth of vehicle exports in the first five months of 2015, up 6.94% from the year-earlier period.

Shipments of pickup trucks were up 3.06% year-on-year at $4.32 billion, with passenger cars up 9.81% ($2.57 billion), motorcycles up 20.8% ($592 million), vans down 3.6% ($180 million) and bicycles down 7.2% ($45.3 million).

Shipments of other vehicle types rose by 12.7% to $220 million.

The Commerce Ministry has set a target to boost shipments in the segment to $19.4 billion this year, up 6.5% from last year's $18.2 billion, which was down 2.58% on 2013.

TMT president Kyoichi Tanada has said Toyota is revving up exports, particularly for pickup trucks, in the second half and expects full-year shipments to exceed the target of 38,000 units.

Thailand last year shipped 1.12 million completely built units, unchanged from 2013, against 1.02 million units in 2012.

The Federation of Thai Industries (FTI) expects auto shipments to exceed 1.2 million units this year, up 6.4%, as car makers try to raise exports to offset sluggish domestic sales.

Thailand's domestic car sales reached 1.45 million in 2012 and tallied 1.33 million in 2013, propelled by the first-time car buyer scheme and strong demand after floods hit several provinces in 2011.

Sales fell by 33.7% last year to 881,832 vehicles, depressed by political turmoil and low farm prices.

Despite sluggish car sales at home, Surapong Paisitpatanapong, a spokesman for the FTI's automotive industry club, said the Thai car industry remained strong and showed no signs of worker layoffs.

Higher exports will boost car output by 6.4% this year to 2 million units, he said.

But he acknowledged that the domestic market was likely to drop by 3.6% this year to 850,000 vehicles.

Overall utilisation of car production is projected to increase to 72% this year, up from 66% in 2014, reflecting healthy conditions in an industry that employs 50,000 workers.

"All car makers are trying to beef up their shipments of locally built vehicles, particularly of pickup trucks and eco-cars, as much as possible," Mr Surapong said.

"But it is possible that certain manufacturers may not renew their contracts with certain temporary workers, as they are phasing out production of old models."

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