The Federation of Thai Industries (FTI)’s Automotive Industry Club (AIC) said on Thursday that the country’s car production, domestic sales and exports have shown signs of recovering in May.
The AIC has subsequently increased its projection for car production from 1 million vehicles to 1.4 million for 2020, based on the assumption that the outbreak of the coronavirus will be contained by the end of June.
Nevertheless, that is still 30 per cent less than the 2 million vehicles that were produced in 2019.
“April was the worst month but there were signs of recovery in May as production, sales and export have all improved from month to month,” Surapong Paisitpatanapong, FTI’s vice president and AIC’s spokesperson told Thai Enquirer.
“However, the situation is still bad if you compare it to the same period [in 2019] and we still have to see if there is also going to be a second wave of the outbreak like what’s happening in many countries right now,” he added.
Production
Thailand produced 56,035 cars in May, representing an increase of 126.8 per cent from 24,711 cars in April.
However, it also represents a drop of 69.1 per cent year-on-year which is nothing close to the normal production level of around 140,000 cars per month.
For the first five months, the country produced 534,428 vehicles, signifying a drop of 40.2 per cent year-on-year.
“Production increased in May because carmakers were returning to production,” Surapong said.
Most car manufacturers have chosen to temporarily close down production in April as domestic sales and exports had been dropping since March.
Domestic sales
Domestic car sales fell by 65 per cent year-on-year to 30,109 vehicles in April but improved by 34.2 per cent to 40,418 vehicles in May.
However, the number in May still represents a decrease of 54.1 per cent when compared to the same period in 2019.
“Domestic sales increased in May because of the reopening of businesses,” Surapong said.
For the first five months, the country sold 270,591 cars domestically, signifying a decline of 38.2 per cent year-on-year.
Exports
Thailand exported 29,894 vehicles worth 17.5 billion baht in May which is better than the 20,000 vehicles they exported in April. It is still far less than the number before the outbreak.
“Normally, we export at least 95,000 vehicles per month or around 1-1.2 million per year so a lot of income is missing here,” Surapong said.
Between January and May, Thailand exported 300,501 vehicles worth 158.7 billion baht which is a drop of 35 per cent in volume and 32.1 per cent in value when compared year-on-year.
Of the new projection of 1.4 million cars produced, 700,000 will be produced for domestic use and 700,000 for exports.
When asked why carmakers are not gunning to produce more for domestic sales than exports as many trading partners are still struggling to contain the outbreak in comparison to Thailand, Surapong said the purchasing power at home is still low.
“There is still no purchasing power right now as the economy is heading towards a recession so people are more inclined to save cash than to spend on cars,” he said.
Employment
As for employment, AIC commented earlier that up to 300,000 people within the industry could lose their jobs if the government failed to help the automotive industry. Surapong said that that prospect is still looming.
AIC’s chairman Ong-Arj Pongkijworasin told Thai Enquirer during the last week of May that if half of the production is gone, up to 300,000 people could lose their jobs.
Surapong said carmakers are still letting people go via a volunteering-to-leave program.
“Things have improved but they are nothing compared to [2019]. Businesses are suffering from lowered income as the fixed costs are still there,” he said.
“We still have to see how many people are willing to leave voluntarily but we do not have the total number so far,” he added.
Nissan told Thai Enquirer at the beginning of June they are releasing employees but declined to disclose how many people are being laid off in Thailand.
They said that all of the employees that were already let go are being compensated according to Thai labor regulations and industry standards.
The AIC has continued to ask the government to come up with measures to stimulate people who can still afford to buy a car to start buying in 2020 instead of later.
Earlier proposals, including the temporary reduction of excise tax on domestically produced cars by 50 per cent and a discount of 100,000 baht for people who want to turn in their old car, have been turned down by the government.
