The political gridlock currently gripping Thailand doesn’t look like it’s about to end anytime soon, with anti-government protesters refusing to participate in elections that PM Yingluck Shinawatra has called for, adamant that an unelected “People’s Council” oversee reforms. The government, which enjoys wide rural support, won’t yield so easily. Meanwhile, capital city Bangkok has been disrupted by a “shutdown”.
This instability may cost the Land of Smiles further investment from Toyota, Reuters reports. The largest car manufacturer in Thailand may reconsider investing up to 20 billion baht (RM2.02 million), and could even cut production if the political unrest persists, according to Kyoichi Tanada, president of Toyota’s Thai arm.
Toyota produces 800,000 vehicles a year in Thailand now, and had plans to increase annual capacity by 200,000 vehicles a year over the next three to four years.
“Our new investment in Thailand may not happen if the current political crisis goes on longer. For new foreign investors, the political situation may force them to look for opportunity elsewhere. For those that have already invested, like Toyota, we will not go away. But whether we will invest (further) or not, we are unsure.
“After the shutdown, we have fewer visitors going to our showrooms. We are ready to cut down our car output if we are affected by the political situation,” he added.
Toyota produced some 850,000 cars in Thailand last year, with 445,000 of the total sold domestically. This year, the big T aims to sell 400,000 cars domestically and export 445,000, it was revealed.
Car sales in Thailand fell 7.7% to 1.33 million vehicles in 2013, according to the Federation of Thai Industries. Sales are expected to plunge a further 13.6% to 1.15 million this year due to weaker consumption and slow economic growth, Toyota predicts.