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Strong baht may hit Thailand’s automotive industry

The rapid appreciation of the baht combined with a labour shortage may inflict a serious blow on Thailand’s automotive industry as some companies mull relocating their production bases to Indonesia, according to a Thai industrialist.

Daniel Lorenzzo

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automobile export

The rapid appreciation of the baht combined with a labour shortage may inflict a serious blow on Thailand’s automotive industry as some companies mull relocating their production bases to Indonesia, according to a Thai industrialist.

Surapong Paisitpattanapong, spokesman of the automotive industry group of the Federation of Thai Industries (FTI), said the strengthened Thai currency has slashed the profit of auto manufacturers. Thailand’s auto exports represent 40-50 per cent of all production with a targeted increase to 1.1 million units this year.

 

Auto manufacturers are keen on investing more in Indonesia given the island country’s policy to support eco car production, he said. Regarding the government’s tax rebate for first-car buyers, Mr Surapong said some clients who paid booking fees to be entitled for the tax incentives have asked for a delay in receiving their reserved cars.

The delay in delivering the products to customers will contribute to overstock but it would not affect most companies’ manufacturing plans as it is less than 10 per cent, he said. Some first-car buyers who made their bookings late last year have requested to postpone receiving the vehicles due to financial constraints.

Mr Surapong said this year’s total auto production is projected at 2.7-2.8 million units but it may be reduced to 2.55 million units if more than 10 per cent of first-car buyers fail to abide by their booking pledges. (MCOT online news)

Read More Here : Strong baht to wreak havoc on Thai auto industry | MCOT.net | MCOT.net

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