Thailand is expected to produce a record 2m vehicles this year as domestic demand and exports grow following the disruptions in 2011 caused by serious flooding.
The Federation of Thai Industries said it expects production to rise 37% over last year when it fell more than 11% to 1.46m vehicles.
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The FTI’s automotive group told Reuters it is confident production will reach 2m this year as there were still many outstanding orders to be filled from 2011.
This would surpass a previous high of 1.65m vehicles in 2010. Last year’s flooding hit the Thai operations of Toyota, Mitsubishi, Mazda and Honda which suffered production halts for a month or longer.
A recent local report said Honda’s car plant had been so badly damaged it would have to be re-equipped as if it was new factory being fitted out.
The Thai government is implementing water management schemes costing US$9.4bn to prevent a repeat. It has also waived tariffs on imported parts and machinery until June to allow the replacement of goods and equipment damaged by flooding.
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By GlobalDataThe FTI expects vehicle production to hit 3m within five or six years adding that incentives, such as tax rebates for first-time car buyers, would help the sector.
Parts makers are also expected to recover steadily, helped by pent-up demand.
