Thailand Targets Record 2 Million Vehicle Output in 2012 After Flood Disruption
Thai car production is forecast to rebound sharply in 2012, with the Federation of Thai Industries expecting output to hit two million vehicles after last year’s flood-induced slump.
Thailand’s automotive sector is set for a strong recovery in 2012, with the Federation of Thai Industries (FTI) forecasting total vehicle production to reach two million units. The projection comes after severe flooding in late 2011 forced widespread plant closures and caused output to fall sharply.
The FTI’s automotive group said the two million unit target would represent a 37% increase on 2011, when output dropped to 1.46 million vehicles. The floods, which hit Thailand’s central provinces and industrial estates in the final quarter, left manufacturers grappling with parts shortages and delayed deliveries. More than 16,000 factories across various sectors were shuttered, with the country’s GDP growth slashed to around 1.5% for the year.
Impact of the 2011 floods on Thai auto production
The 2011 floods were the worst in decades, inundating key industrial zones north of Bangkok. Major Japanese automakers with operations in Thailand, including Toyota, Honda and Nissan, saw production lines halted for weeks. The disruption extended beyond assembly plants, as component suppliers were also affected, creating a bottleneck that persisted into early 2012.
Export production bore the brunt of the decline, dropping nearly 18% year-on-year to 733,950 vehicles in 2011. Domestic sales proved more resilient, falling just 0.8% to 794,080 units. The FTI said a large backlog of orders, both for the domestic market and for export, remained to be fulfilled, providing a strong foundation for a production rebound in 2012.
Industry outlook and ongoing risks
Despite the damage, industry leaders remain confident that Thailand will maintain its role as a key regional manufacturing hub. Japanese carmakers, in particular, are expected to continue expanding production in Thailand, attracted by competitive costs and established supply chains. The FTI’s automotive group cited strong order books and pent-up demand as reasons for optimism in 2012.
Government officials have warned, however, that a repeat of the 2011 floods could threaten investor confidence and long-term growth. Measures to improve flood defences around industrial zones have been prioritised, but the memory of last year’s disruption remains fresh for manufacturers and workers alike.
Thailand’s place in global automotive production
If the FTI’s forecast holds, 2012 will mark a new record for Thai automotive output, consolidating its position as a leading exporter of vehicles and components in Southeast Asia.
