Thai protestors

Toyota may rethink Thai manufacturing investment

Toyota has warned it may reconsider a  £370m manufacturing investment in Thailand if unrest in the Southeast Asian country continues.

The head of the Japanese automaker's local unit Kyoichi Tanada said today at a news conference that a 20 billion baht plan to increase its annual capacity by 200,000 vehicles a year over the next three to four years are now uncertain.

Protesters have been trying for more than two months to bring down Thailand's government, forcing ministries to close and Prime Minister Yingluck Shinawatra to shift her workplace as part of an attempted "shutdown" of the capital.

"Our new investment in Thailand may not happen if the current political crisis goes on longer," Tanada said. "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."

Thailand is the biggest auto market in Southeast Asia and a regional vehicle production and export base for the world's top car manufacturers like Honda and Ford. Toyota is the largest car manufacturer in Thailand, producing 800,000 vehicles a year.

But Tanada said that if the unrest affects economic growth, Toyota may cut its production in Thailand while it assesses the situation.

"After the shutdown, we have fewer visitors going to our showrooms. We are ready to cut down our car output if we are affected by the political situation," he added.

Toyota produced around 850,000 cars in Thailand in 2013, selling 445,000 domestically and exporting some 430,000 vehicles. This year, it aims to sell 400,000 cars domestically and export 445,000, Tanada said.

Overall auto industry sales in Thailand are expected to fall 13.6 per cent to 1.15 million vehicles in 2014, mainly due to weaker consumption and slow economic growth, data from Toyota's Thai unit shows.

This will be the second consecutive year of decline after an 80 per cent surge in 2012 fuelled by government subsidies for first-time car buyers and pent-up demand after severe flooding in late 2011.

Domestic auto sales fell 7.7 percent to 1.33 million vehicles in 2013, according to the Federation of Thai Industries.

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