Thailand’s pickup truck industry, the second largest in the world, is forecast to nearly double in the next three years and has become a barometer for growth in Southeast Asia’s fastest-growing economy, according to Reuters.
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The news agency said two-thirds of the new vehicles crowding Thailand’s roads are now one-tonne pickup trucks, moving around the lifeblood of the economy – construction workers and farmers.
Industry analysts and government officials told Reuters that surging local sales and growing exports will help Thailand boost pickup truck production to around 700,000 units a year by 2006 from 360,000 this year.
Domestic sales of pickup trucks surged 31.6% in the first five months of 2003 over 2002. The rise followed a 43.1% jump in sales in 2002, underpinning a rise of 5.3% in GDP for the year, the report added.
According to Reuters, Thai economic growth is expected to be around 5.5 to 6.0% this year, well ahead of its regional rivals.
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By GlobalDataThe news agency said Thailand, the second-biggest pickup truck producer after the United States, has become a regional manufacturing hub for global brands like Toyota, Isuzu, Mitsubishi, Ford [and its Mazda unit] and General Motors.
Toyota, Isuzu and Mitsubishi have in the past year unveiled plans to make Thailand their global truck production base, Reuters added.
Vallop Tiasiri, executive director of Thailand Automotive Institute, told Reuters that exports of Thai-made pickups would jump to around 300,000 units a year by 2006 from 125,000 in 2002, with most of them going to Australia and Europe.
The news agency said Toyota plans to spend $US720 million to double its Thai output of pick-ups and multi-purpose vehicles to around 200,000 a year by mid-2004, half destined for export.
Over four million light pickup trucks are running in Thailand, a country slightly larger than California, Reuters noted. In 2002, another 241,266 of the vehicles were added to the country’s congested roads, a rate of about 670 new pick-up trucks per day, or 65% of all new cars.
Helped by a tax structure favourable to commercial vehicles, two of every three vehicles sold by car companies in Thailand in the past 10 years are one-tonne trucks, Reuters said.
“The rural Thai folks grow up with pick-up trucks as a part of their life. The favourable tax policy for the vehicle is rooted in a long standing government policy to help the farming sector,” May Arthapan of Automotive Resources Asia Ltd, told Reuters.
Buyers of Thai pickup trucks pay a consumption tax of only three to 18%, against 35 to 48% for passenger cars, Reuters added.
The news agency said the Thai motor industry has ironically been a beneficiary of the country’s 1997/98 economic crisis, which set off a more widespread regional slump. That crisis hit the motor industry as global manufacturers had built big assembly plants in Thailand, and forced factories to turn to exports for survival.
“The crisis has been a blessing in disguise. It created a Thai car export industry by forcing over-expanded plants to make more use of their surplus capacity,” Wisan Tanthawichian of the state-run Board of Investment, told Reuters.
At the height of economic turmoil in 1998, car factories in Thailand operated at only 17% of combined annual assembly capacity of 1.1 million vehicles. By 2002, with the economy recovering, capacity utilisation had risen to 55% and is rising quickly, the news agency said.
But Reuters noted that Thailand has a way to go to catch US domestic light truck or pickup sales, which rose 9.9% to 7.65 million in the year to May and made up 47.6% of sales.
