Strong yen a plus for Thai vehicle exports
Thailand's car exports have room to grow next year by replacing shipments from Japan as it battles yen appreciation, according to Fukujiro Yamabe, president of the Japanese Chamber of Commerce (JCC) in Bangkok. Mr Yamabe, who is also the president of Mitsubishi Co (Thailand), said automobile exports are expected grow slowly in 2009 after strong progress the past decade, as purchasing power drops in all overseas destinations.
''Thailand, however, has some advantages in terms of production costs compared to other countries, especially Japan. Car exports will have consecutive growth for sure next year but not as big as in 2008 as export markets slow down,'' he said. ''[However] the Thai exchange rate is competitive when compared to Japanese yen, so there is a good chance that Thai exports could replace those shipped from Japan.''
Domestic vehicle sales should grow at a slower pace next year. Despite the weakening economy, vehicle demand in Thailand is healthy compared to other countries, he said.
Japanese companies are also suffering from the credit crunch and have to reduce their investments. Toyota cut its net profit forecast by 24% from estimates three months ago to $6 billion.
Almost every company is reviewing its investments, he said.
Mr Yamabe said Mitsubishi Motor was also considering reviewing its investment plan in the eco-car project in Thailand. ''But I don't think the project will change.''
Mr Yamabe forecast total car production in Thailand would fall 18% to 1.2 million units next year on pressure from the global financial crisis decreasing domestic and overseas demand.
Asian Honda Motor senior vice-president Adisak Rohitasune estimated production this year at 1.445 million units, with 620,000 sold domestically and 825,000 exported.
In the first nine months of this year, production grew 14% year-on-year to 1.07 million vehicles, with exports up 22% to 600,000 units and domestic sales just 2% to 461,085.
Despite the market slowdown, Mr Adisak is confident that next year's car sales will be better than this year's, as the main export markets for Thai vehicles are now Asia, Australia, the Middle East and Latin America.
Honda has not finalised its production target next year but it will definitely reflect slower growth than this year as it has already cut its overtime hours.
Mr Yamabe added that total foreign direct investment (FDI) coming to Thailand would decline next year