Thailand’s auto industry will continue growing higher than previously expected this year although Japan, which is the major manufacturer and distributor of auto parts, has taken a huge toll from the recent earthquake, according to a top Thai industry executive.
Thanathorn Juangroongruangkit, executive vice president of Thai Summit Autoparts Industry Co, said the production of new vehicles in Thailand is expected to reach 1.8 million units this year.
The local demand for vehicles in the country is projected to increase due to the economic recovery. The trend will contribute to the growth of the auto industry in Thailand.
In addition, Thailand still has the potential to become ASEAN’s auto production hub because its basic infrastructure is stronger in comparison to those of other countries.
Foreign investors, particularly the Japanese, eye Thailand as the first choice in ASEAN to be used as their production base.
However, Thailand needs to strengthen research and development of automoive technology and boost such knowledge and skills among Thai workers.
The disaster in Japan is expected to affect economies in Southeast Asia, but economists say the damage is likely to be limited. They say the region may even see increased investments from Japan as companies seek to diversify away from areas at higher risk from natural disasters.
Japan supplies Southeast Asia factories with components and parts put into cars, electronics, and other products for export, including back to Japan.
That supply chain was disrupted when the earthquake and tsunami hit Japan’s northeast, damaging a nuclear plant and forcing many factories to stop production.
Production at a Nissan Motor plant in China dwindled dramatically two weeks after Japan’s earthquake and tsunami disrupted the supply of key auto parts, sources with the company said Saturday.
Workers at a Dongfeng Nissan plant in central China’s Hubei Province told reporters that Saturday’s production level at the assembly workshop dropped to less than one-third of the normal level.
“We used to assemble 304 cars a day, but today our plan is set at 82,” said a worker who declined to give his name.
“And our work time was cut to half a day to accommodate the production,” he added.
Japanese automotive joint ventures in China get 60 to 70 percent of their parts locally, while key parts like engines and transmissions are imported from Japan.