Toyota has said it may reconsider its planned US$609m investment in Thailand, and cut production, if political unrest in the country drags on.
The automaker is the largest car manufacturer in Thailand, producing 800,000 vehicles a year. It has announced plans to increase this by 200,000 over the next three to four years but Kyoichi Tanada, president of Toyota’s Thai unit, told a news conference: “Our new investment in Thailand may not happen if the current political crisis goes on longer.”
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He added: “For new foreign investors, the political situation may force them to look for opportunity elsewhere. For those that have already invested, like Toyota, we will not go away. But whether we will invest (further) or not, we are unsure.”
Anti-government protests have been going on for more than two months, forcing ministries to close and prime minister Yingluck Shinawatra to shift her workplace as part of an attempted “shutdown” of the capital, Bangkok.
This has meant people are more wary about being out on the streets and Tanada said that fewer visitors are going into showrooms. He added: “We are ready to cut down our car output if we are affected by the political situation.”
Toyota sold around 445,000 vehicles last year but overall auto industry sales in Thailand are expected to fall 13.6% to 1.15m vehicles in 2014 due mainly to weaker consumption and slow economic growth. This would be a second straight year of decline after an 80% surge in 2012 due to government subsidies for first time car buyers and pent up demand after severe flooding in 2011.
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