Thai auto output set for slow growth in 2017 – domestic rebound offset by softer exports

Thai auto output set for slow growth in 2017 – domestic rebound offset by softer exports

While Thailand’s domestic market is expected to grow for the first time this year since 2012, overall figures from the Detroit of the East might only expand moderately due to softer exports, the Bangkok Post reports.

According to Surapong Paisitpatanapong, a spokesman for the Federation of Thai Industries (FTI) automotive club, the industry is worried about exports this year, as economic conditions in countries that rely heavily on oil revenue have yet to recover. The FTI forecasts that exports will probably stay flat in 2017 at about 1.2 million units.

“Thailand’s vehicle shipments remain affected from an economic downside, notably in the Middle East, which is one of the key destinations for pick-up trucks. The economic situation in that region is also worrisome, both because of civil wars and low oil prices. We expect a proportion of vehicle exports to the Middle East to fall to 14% of the total shipment in 2016 from 26% in 2015,” he said.

Other regions also face uncertainties. Surapong points out that US president-elect Donald Trump’s protectionist trade policies mean that China’s prospects are unpredictable. Thai exports to Africa might also be affected by the South African government’s plan to boost local auto production. Prospects for Asia and Oceania are more rosy.

Thai auto output set for slow growth in 2017 – domestic rebound offset by softer exports

“We spotted the negative impact on car exports early in 2016 and we’ve projected total shipment to stand at 1.18 million cars in 2016, down by 2.1% from 2015, which is well below the FTI’s target of 1.22 to 1.25 million,” he added.

Exports from January to November 2016 stood at 1.1 million, down 1.42%. However, export values rose by 7.2% to 585 billion baht, boosted by costlier pick-up based SUVs such as the Toyota Fortuner, Mitsubishi Pajero Sport and Ford Everest, all of which are relatively fresh in the market. Shipments for pick-up trucks are down by 12.5% to 537,256 units from Jan to Nov. It’s not expected to get better this year as the Middle East is a key destination for trucks.

Thailand’s other big product should fare better this year after a slow 2016. In the first 11 months of 2016, eco car exports fell 4.4% year-on-year to 223,129 units, although this was offset by stronger sales at home, which went up 28.6% to 110,878 units. Total output was up 4.51% as a result. Companies invested in the Thai eco car project are expected to start second-phase production this year, and the Nissan Note will be one to watch.

A rebound in the domestic market tempered by soft exports would amount to slow rise in total Thai auto output. The FTI is forecasting a 2.6% growth this year to two million units, including 800,000 local TIV.

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Danny Tan

Danny Tan loves driving as much as he loves a certain herbal meat soup, and sweet engine music as much as drum beats. He has been in the auto industry since 2006, previously filling the pages of two motoring magazines before joining this website. Enjoys detailing the experience more than the technical details.

 

Comments

  • Kunta Kinte on Jan 05, 2017 at 5:11 pm

    Malaysia was on its way to be the Detroit of Asia in the 90s. But Jepunis and Mat Salleh pulled out of Malaysia big time because too much of corruption and because MITI dictated how much each car should be priced.

    We lost hundreds of billions in USD investment (trillions of RM) as well as losing hundreds of thousands of jobs for Malaysians.

    Imagine if we exported 1.18 million cars, we will be making BILLIONS in revenue.

    Like or Dislike: Thumb up 1 Thumb down 2
    • Faiz Roslan on Jan 05, 2017 at 6:46 pm

      Thailand is behind, no where close to Malaysia which is the real Detroit of Asia. We have our own VVT that seamlessly work with cutting edge Punch CVT technology, no doubt the best drivetrain in the world. We also own the word “RIDE AND HANDLING” no one can use the three words in a sentence but us Malaysians that have developed Proton together with tje government. – Faiz Roslan CEng

      Like or Dislike: Thumb up 0 Thumb down 0
      • We dun wan be detroit of asia. Later got criminals with hand cannons vs robotic cyborg polis warfare.

        Like or Dislike: Thumb up 2 Thumb down 0
    • No point cuz the BILLIONS in revenue will go to Bangla, Nepal, Myanmar dan lain-lain. Instead MY Gov lose out cuz need to gip tax breaks to them. So its lose-lose situation.

      Like or Dislike: Thumb up 3 Thumb down 1
  • pengayuhbasikal on Jan 05, 2017 at 6:18 pm

    Thai car models
    look more attractive than locals one.

    Like or Dislike: Thumb up 1 Thumb down 0
 

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