Sales volume for large vehicles halts due to political conflicts

Thailand’s political situation has severely reduced sales of large trucks, according to the Thai Autoparts Manufacturers Association.
Prasartsilp On-Aht, the association’s honorary chairman, said as there are vehicles in stock, manufacturers for large vehicles were forced to slow down their orders of spare parts to 70 percent, thus also causing spare parts producers to be affected by the political stalemate.
However, the chairman said small vehicles are still being sold, though at a lower volume than previously predicted at the end of 2013. Originally, the number of cars assembled in the country was projected at 2.7 million units throughout this year, but the current auto production figure is now forecast at no more than 2.55 million units.
Prasartsilp said manufacturers in the spare parts industry are making adjustments in order to sustain their businesses. He commented that the production trend of spare parts should improve in Q3 and Q4. The overall value of Thailand’s automobile spare parts industry should reach Bt700 billion.
The problem being faced by the manufacturers, particularly those small- and medium-sized enterprises, is the lack of workforce, which is substituted by foreign labor, he noted. (MCOT)

Central bank predicts gloomy economy in first half of 2014

Thailand’s economic policy will be disrupted, with direct and indirect impact on the economy and state investments, if the political stalemate prolongs until the middle of this year, according to the central bank governor.

Prasarn Trairatvorakul projected this year’s gross domestic product growth at less than 3 percent, or similar to last year, saying the Bank of Thailand’s interest rate cut has only slightly stimulated the economy.
If a new government cannot be formed by the middle of this year, execution of the government’s policies, investment projects and budgeting will be slowed down, thereby affecting investment, economic expansion and domestic consumption in the private sector, he said.
Despite unfavorable economic factors, Thailand’s economic fundamentals are strong enough to cope with political issues and a volatile money market for a certain period, he said, adding that credit rating institutes have maintained the country’s rating.
The downward trend of the Thai baht was not too harsh compared to currencies of newly-emerging markets, thanks to Thailand’s strong fundamentals.
Thailand has not faced problems with inflation or a current account deficit, while the exchange rate is flexible and international reserves are as high as US$200 billion, or 50 percent of GDP, said Prasarn.
Kosit Panpiemras, executive chairman of Bangkok Bank, said Thailand’s GDP and exports will grow 3 percent and 7-8 percent, respectively, despite the political stalemate, thanks to the private sector’s competitive capabilities.
Financial institution lending will expand by almost 5-6 percent, he said, adding that Thailand’s competitiveness will be strengthened in the long term if the country can operate with less populism and corruption.
Supavud Saicheua, managing director of Phatra Securities’ research group, predicted Thailand’s GDP growth at only 2.8 percent this year on the condition that the new government is formed by the second half of the year.
GDP growth in the first half of the year will be only 0.6 percent and will jump to 5 percent in the second half, he said.
This year’s export growth will be around 4 percent, concurrent to the strengthening global economy, while investment in the public and private sectors will grow at only 1 percent, he said. (MCOT)

Gold sales drop by 10% during this Chinese New Year

Gold sales during this Chinese New Year have dropped by 10%, as worries over the political crisis in Thailand have adversely affected consumers’ decisions, said the Gold Trader Association.
The comment was made by Jitti Tang Sittiphakdee, the president of the association, who pointed out that political gatherings prompted consumers to be extra careful with their spending, adding that protesters also made traveling to gold shops more difficult.
He also speculated that gold prices would gain momentum after the Lunar New Year, citing the public debt ceiling issue and the U.S.’s Quantitative Easing measure as the main factors dictating the prices.
According to him, gold prices would likely move between 1,170 - 1,450 U.S. dollars per troy ounce in the international market, while domestic gold should be traded in the range of 17,000 - 22,000 baht per one baht weight of gold. (NNT)

Thai exports drop 0.3% in 2013 - first contraction in 4 yrs

Thailand’s exports last year declined by 0.3 percent from the preceding year - the country’s first such deficit in four years, a senior Commerce Ministry official said last week.
Srirat Rastapana, permanent secretary for commerce, reported last year’s export value at US$228.5 billion and imports at US$250.7 billion, or a 0.29 percent increase.
She said Thailand’s export deficit was less severe than those of Malaysia and Indonesia, both of which reported deficits at 8.96 percent and 6 percent respectively.
Vietnam, on the other hand, enjoyed a 16.47 percent export growth.
Exports in December enjoyed a slight increase to US$18.4 billion despite registering a deficit in the three preceding months.
She predicted Thailand’s gross domestic product (GDP) to grow 3-5 percent this year, which is equivalent to the average projected GDP growth in China, India and Southeast Asian countries.
Regarding the downward trend of Thai baht this year due to the US adjusted measures on quantitative easing, Ms Srirat said Thailand’s medium-term export growth should be at 5 percent this year.
In the best case, exports could enjoy double-digit growth, and a deficit in the worst case, she said, adding that the prediction was purely based on economic factors without taking political issues into consideration.
Thailand’s overall economic landscape will not be positive if political conflicts remain unresolved, she said. (MCOT)

AFG looks at the Myanmar situation

Dr. Iain Corness
With Myanmar (Burma) opening up to outsiders in many fields, the Automotive Focus Group (AFG) is presenting to its members an interesting seminar prepared by the Tractus Group called “Evaluating the Final Frontier: Automotive Manufacturing in Myanmar.”
The discussion will cover “Understanding change.”
“Understanding the timeline of events and a look ahead to 2015.”
“Myanmar’s Critical Location Factors for Manufacturing.”
“Evolving land policy, industrial zones and ownership issues.”
The seminar will be held on February 21 at the Nova Platinum, South Pattaya, commencing at 6 p.m. More information can be obtained from the president Frank Holzer email [email protected].