FTI bullish on car output despite dip

Vehicle production fell 3.7% last month

The Federation of Thai Industries (FTI) remains optimistic about the country’s car production hitting 2 million units this year, though output in September dropped for the first time in 15 months.

The FTI’s automotive industry club reported yesterday that output l ast month fell by 3.7% year-on-year to 183,191 vehicles.

Surapong Paisitpatanapong, the club’s spokesman, said output in September grew by 1.1% from August.

“The [year-on-year] contraction was because production for exports of both passenger cars and pickups dropped by 6.2% and 16.9%, respectively, to 35,287 and 64,017 units,” he said. “But production for the domestic market rose 11% to 83,887 vehicles in September.”

Mr Surapong said the club is optimistic that 2018 production can reach 2.08 million units as projected in June.

The country’s automotive output exceeded 2 million units in both 2012 and 2013, with 2.45 million and 2.46 million, respectively, propelled by the Yingluck Shinawatra government’s first-time car buyer scheme.

After the scheme expired, output dropped to 1.88 million vehicles in 2014.

“If car manufacturers make at least 180,000 vehicles per month in the fourth quarter, the combined 540,000 units of volume can bring full-year production to hit the club’s projection,” Mr Surapong said. “The output from January to September still grew by 8.6% to 1.604 million units.”

For car exports, volume in September fell by 13.7% year-on-year to 104,163 units as shipments to many regions contracted.

Export value for the period was 54.4 billion baht, down 14.6% from the same month last year.

Exports over the first nine months stood at 858,787 units, up 1%, and value for the period totalled 450.9 billion baht, up 0.3%.

“A worrisome issue for car exports is external factors in each destination,” Mr Surapong said. “For example, the Europe markets are shifting to import vehicles from Turkey, where the import duty is lower than for shipments from Thailand.”

He said the club is still maintaining its export projection for 2018 of 1.1 million vehicles, down 3.4% from the 1.139 million shipped in 2017.

At home, sales in September rose by 14.3% to 88,668 units, driven by healthy sentiment in the country.

“Overall GDP growth is driving the local market with many factors: high consumer confidence, introduction of new cars, investment by the government and private sector, the tourism industry’s potential and a healthy export sector,” Mr Surapong said.

The positive momentum drove the overall car market from January to September, as sales rose 20.3% to 746,546 vehicles in the period.

By segments, sales of pickup trucks in the period rose by 20% to 314,688 units, followed by passenger cars with a 19% rise to 291,091 units.

SUV sales in the first nine months totalled 60,575 units, up 58.5%, while sales of pickup passenger vehicles stood at 45,811 units, up 11.9%.

Mr Surapong said the local market in 2018 could possibly reach 1 million units sold, but the club has a 2018 projection of 980,000 units, up 12.4% from 871,650 sold in 2017.

For the motorcycle sector, the club reported that output from January to September stood at 1.93 million units, up 1.6% from the same period last year.

Local sales in the first nine months totalled 1.37 million motorcycles, up 1.7%.

Motorcycle exports from January to September grew by 3.6% to 644,876 units as export value for the period reached 44.32 billion baht, up 10.9%.

“The club hopes a localisation of big-bike makers can beef up motorcycle exports in the near future,” Mr Surapong said.