The Federation of Thai Industries (FTI) has a conservative outlook for auto production in 2020, remaining at 2 million units due to numerous global economic difficulties.
This projection represents a decrease of 0.68% compared to 2019 production.
The country’s automobile production is produced for two segments: local sales and exports. The FTI auto industry club said the two segments still face a multitude of risks.
Of the production targeted in 2020, 1 million is forecast for each segment, down 0.75% and 5.13% over one year for domestic and exports.
Surapong Paisitpatanapong, the club’s spokesperson, said the US-China trade war and US-Iran military tensions still influence the global economy and trade as a whole. The Thai auto industry is no exception.
Some countries have reduced their purchase orders, which has resulted in lower auto production, he said.
“The production contraction will continue from 2019, as large countries like China and the United States also suffer from bearish auto production,” Surapong said.
“The appreciation of the baht will reduce the value of car exports. This will cause some manufacturers to relocate their production bases outside of Thailand to avoid the hard currency.”
Regarding local sales, he said the drought will impact the purchasing power of farmers and the tourism sector will suffer from a drop in the number of visitors.
“The local economy remains uncertain, especially with political instability and the government’s budget disbursement,” Surapong said.
Yesterday, the club reported that 2019 auto production fell 7.1% to 2.01 million units, under pressure from contractions in local sales and exports.
He said full-year car production remained above 2 million units, as previously expected.
Local sales in 2019 totaled 1.01 million cars, down 3.3% from the same period last year.
But 2019 sales saw the first contraction in three years.
“The local market still suffers from auto loan denials by financial institutions, but many auto distributors have launched new models in Q4 2019, so some reservations will be delivered to buyers in 2020,” Surapong said.
The club said car exports in 2019 were 1.05 million units, down 7.59% year-on-year. The value of shipments was 546 billion baht, down 8.21%.
Asia was the largest export destination in 2019, totaling 318,752 cars, or 30.2% of the total volume, while Oceania came in second with 301,923 cars shipped for the period.