Months of political unrest is threatening to drive some vehicle makers out of Thailand. The country’s auto sector, the biggest in Southeast Asia, has already witnessed production and job cuts this year.
Reuters reported that some 30,000 sub contracted jobs have been lost in a sign that the auto industry, which accounts for about 11% of Thai economic output, is being hit hard by the prolonged power struggle between the Bangkok-based royalist establishment and the mainly rural supporters of ousted former Prime Minister Thaksin Shinawatra.
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As a regional production and export base, the problems in Thailand have major implications for carmakers including Toyota, Nissan, and Ford which could shift some production to cheaper bases such as Indonesia, the region’s second biggest vehicle market.
Honda has said it was considering delaying a new US$530m plant in Thailand by six months to a year, as the economy plunges towards recession amid the political turmoil.
Toyota told Reuters at the start of the year it planned to sell 400,000 vehicles in Thailand this year but, in the three months to March, saw sales there drop 33% to 84,000. Executive vice president Nobuyori Kodaira told reporters in Tokyo last week that the company may have to consider cutting its sales outlook for Thailand as a result.
Domestic sales in Thailand, which represent half of the country’s output, have been sliding following the the expiry last year of a first car subsidy scheme which prompted a surge in demand in 2012.
