BANGKOK (Reuters) – As tourism-dependent Thailand grapples with a slump in foreign visitors, the country’s auto sector lags somewhat with the value of car exports set to hit a record high this year with the reopening of the world economy.
The Southeast Asian nation is Asia’s second most popular tourist destination, but its famous beaches, street markets, and pagodas have been out of business in the past year due to pandemic restrictions that have crippled travel around the world.
As Thailand’s central bank lowered its projections for this year’s economic growth due to the blow to consumption and tourism, it last week raised its export growth forecast for 2021 to an 11-year high. 17.1%, against a 10.0% increase expected in March. .
This is largely due to exports of cars, parts and accessories, Thailand’s biggest shipment, which jumped 170% year-on-year in May, the fastest pace in more than eight years, according to customs data.
“Exports are now the main engine of the economy,” Thai Minister of Commerce Jurin Laksanawisit told reporters this month. “We have to admit that our tourism still cannot start.
Thailand is Asia’s fourth largest auto assembly and export center for some of the world’s largest automakers such as Toyota and Honda. Industry accounts for around 10% of Thailand’s GDP and manufacturing jobs.
The sector has been able to shake off the disruptive impact of COVID-19 much faster than the tourism industry.
Auto parts maker AAPICO Hitech, which has 4,500 employees, is operating at full capacity 24 hours a day, company chairman Yeap Swee Chuan told Reuters, in stark contrast to the collapse of the factory. last year when the pandemic hit.
“Last year hasn’t been good at all, but this year should be sunny,†he said, targeting 20% ​​sales growth and much higher profits this year.
“So far we haven’t seen much impact from any situation in Thailand as the export market is still strong and in the local market demand still seems to be there at the moment. “
EXPORT AUTOMATIC LED ARROW
Thailand’s latest and largest coronavirus outbreak to date, which began in April, slowed domestic activity, dealing a deeper blow to the country’s already fragile economic recovery.
But the fallout on auto sales has been limited, while the auto industry boom has been driven by foreign demand.
The Federation of Thai Industries (FTI) said the country’s exports of fully-built cars could reach 800,000-850,000 units this year, exceeding its target of 750,000 and down from around 736,000 in 2020.
Surapong Paisitpattanapong, spokesperson for FTI’s auto industry division, expects global car shipments to hit a record 1,000 billion baht ($ 31.4 billion) this year from 786 billion baht in 2019 before the pandemic.
Thailand’s auto exports reached $ 12.4 billion in January-May, more than half of the $ 21.4 billion shipped for all of 2020, according to the Commerce Ministry.
On the other hand, only half a million foreign tourists are expected this year, predicts the national planning agency, against a record of nearly 40 million in 2019.
Market leader Toyota Motor Thailand predicts an 18% increase in the company’s fully-built car exports to 254,000 units this year due to increased demand in Asia and Oceania.
So far, problems with the global supply of microchips have not yet significantly disrupted Thai auto production, although FTI warns there remains a risk.
Toyota and Mazda spokespersons said they were able to get enough chips for production. A spokesperson for Honda Thailand told Reuters it closed a factory in May due to a chip shortage, but was successful in limiting the impact on customers.
KEY MARKETS
Nuntawat Srivaratachkul, acting vice president of Toyota Motor Thailand’s corporate planning division, told Reuters that the vaccination rollout and government stimulus measures have helped demand in key markets.
Thailand’s auto exports to Australia, the largest buyer, more than tripled in May, while those to Vietnam nearly increased tenfold and those to Japan rose 76% that month.
In Australia, where local auto production ended in 2017, the return to pre-pandemic economic prosperity and government stimulus measures have supported business and consumer demand, helping businesses buy pickup trucks.
Meanwhile, reducing red tape for importing vehicles into Vietnam has also facilitated trade flows.
Isao Sekiguchi, director of Nissan in Thailand, told Reuters its exports were driven by demand for its recently launched electric vehicle, especially from Japan, and its new pickup truck.
Yukontorn Wisadkosin, president of Ford ASEAN, said the company is benefiting from demand from Australians, who are looking to travel to the country amid coronavirus restrictions.
The Ford Ranger and Ford Everest continue to enjoy strong momentum in Australia as they are vehicles of choice for Australians across the country as they look to their own backyards for adventure. “, she added.
Additional reporting by Chayut Setboonsarng in Bangkok and Eimi Yamamitsu in Tokyo; Editing by Sam Holmes and Ana Nicolaci da Costa
