Toyota Motor Thailand (TMT) is considering postponing new investments in the country in response to falling worldwide vehicle sales, according to vice-chairman Ninnart Chirathirapinyo.

After Toyota announced production cutbacks and temporary staff layoffs last month, the TMT executive told local reporters that the company is reviewing new capacity investment plans, including a new facility to produce small cars.

Last year, the Thai Board of Investment approved Toyota's proposal to invest THB 6.3 billion in the production of small eco-friendly cars that would qualify for investment incentives and lower local excise taxes under the government's "Eco-Car" programme. The facility, with a capacity to make 100,000 cars per year, is scheduled to start operations in 2012. Half of the output is earmarked for export. This investment is now under review.

Khun Chirathirapinyo confirmed that hybrid car production, due to start in mid-2009, will not be affected. In June the company announced that it would make hybrid versions of the Camry in Thailand at a rate of 9,000 units per year.

The Thai components industry is also coming under pressure from the recently announced vehicle production cutbacks. SET-listed Aapico Hitech Plc - a large body and chassis parts manufacturers - said revenues could fall by 25-30% next year. If so, the company said it would lay off up to 30% of its 4,000 workforce, or all of its hourly-paid workers.

Other Thai suppliers that have announced deteriorating trading conditions lately including Thai Storage Battery Plc and Union Nifco, a Japanese joint venture which makes plastic parts.

Tony Pugliese