With lower volume, Toyota cuts 800 jobs in Thailand

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With lower volume from the sluggish economy in Thailand and abroad, Toyota plans to cut 800 jobs in the Land of Smiles, according to Reuters.

Thailand’s economic slowdown, along with uncertainty over the global economy, have affected both the domestic automotive industry and exports since the beginning of the year, the country’s top auto producer said in a statement, adding that the situation has caused a reduction in production volume, overtime hours and monthly income offered to employees.

Toyota has offered the voluntary redundancy package to around 800 subcontractors, but more workers have applied for the scheme, said Phuphal Samata, president of Toyota Thailand Worker’s Union. “There isn’t overtime payment anymore, so many subcontractors may want to find other work and take this compensation package.”

Toyota, the market leader that controls about a third of the Thai market, has 18,000 staff in the Kingdom, 40% of whom are subcontractors, or contract workers, the union head said.

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In January this year, Toyota forecast Thailand’s total domestic car sales would fall 10% to 720,000 units this year. It predicted a 9.8% drop in its own sales figures from 2015. Thai auto sales have declined almost every month on a yearly basis since May 2013 following the ending of the government’s first car subsidy scheme in 2012.

However, job cuts at Toyota are unlikely to spread to other automakers, as the big T has hired many workers since the car subsidy scheme, said Surapong Paisitpattanapong, spokesman for the Federation of Thai Industries automotive industry club. “I don’t think others will immediately follow suit because May’s auto production, exports and domestic auto sales are growing. There’s still hope,” he said.

Thailand is a regional production and export hub for the world’s top carmakers, including Toyota, Honda, Nissan, Mitsubishi and Ford, among others. The vital sector accounts for around 10% of the ASEAN country’s GDP. While domestic sales have been hurt by a sluggish economy and a new C02-based tax structure, exports are holding up overall figures.

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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.

 

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