Wednesday, 27 July 2011

Toyota Thai unit to expand capacity to meet demand

Toyota Motor Corp’s Thai unit said it planned to expand capacity at one of its three plants in September to meet fast-growing demand for vehicles.
Other Japanese car makers are also expanding outside their home market to mitigate the impact of the strong yen, which hurts the competitiveness of Japanese exports, and take advantage of cheaper costs. Toyota Motor Thailand planned to expand capacity at its Banpho plant in Chachoengsao province to 220,000 units a year in September from 140,000 now, President Kyoichi Tanada told a news conference.
"The continuous growth of the auto market is clearly seen in the one-tonne pickup segment," Tanada said, adding Toyota would concentrate on such vehicles, a big part of the Thai market, in part because of demand from the agriculture sector.
Toyota, the world’s biggest car maker, has said it planned to spend 3 billion baht ($100 million) to increase production at the Banpho plant, which produces Fortuner sport utility vehicles (SUV) and Hilux Vigo pickups. Last week it announced a $1.3 billion overhaul of its manufacturing operations in northeastern Japan in a bid to boost efficiency and soften the impact of the strong yen.
Tanada, also newly appointed president of the Japanese Chamber of Commerce in Thailand, said Japanese investors were increasingly interested in shifting production bases to other Asian countries with lower costs, especially Thailand, Vietnam, Indonesia and India. In Thailand, Toyota will also expand production by boosting efficiency at its three assembly plants, Tanada said.
Thai auto sales are expected to rise 12.4 percent this year to 900,000 units due to increasing demand and the launch of several new car models, he said. Sales jumped 21.1 percent to to 432,000 units in the first half of the year.
Toyota’s first-half sales in Thailand grew 8 percent to 156,301, giving it a leading market share of 36.2 percent, and it targeted 2011 sales of 360,000 units, including 181,000 one-ton pickup trucks, he said. Hit by the impact of Japan’s March 11 earthquake in the first half, Toyota expected its car exports from Thailand to drop 2 percent in 2011 to 328,800 units, Tanada said.

Operations at its Thai unit returned to normal from May 23 after supply chain disruptions caused by the earthquake. .Thailand is the biggest car market in Southeast Asia and a regional vehicle production and export base. Demand should be boosted by the incoming government’s proposed tax refund for first-time buyers of cars valued at less than 1 million Thai baht. Asked about another proposed policy, a big rise in the minimum wage, Tanada said the government should try to achieve some balance between higher wages and the higher cost of living.
"It isn’t a bad thing because the wage rise will boost people’s income and purchasing power," he said, but he noted that if wages rose by 40 percent, his firm would have to boost productivity by 40 percent or find other ways to offset the cost.


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