Auto firms see improvement in market next year

       Companies in the automotive industry expect the market to improve next year, with production capacity set to rise in the latter half of this year, according to a survey by the Office of Industrial Economics.

       "The 'hamburger' crisis has affected the economy and the automotive industry in every country, which highlights the necessity of precautionary measures. However, the effects should not linger for a long time, as most have plans to cushion the impacts," said Arthit Wuthikaro, director-general of the office.
       He urged companies to increase the efficiency and quality of their factories and products and improve the knowledge and skills of employees to prepare for an economic recovery.
       For the 2010 fiscal year starting on October 1, the office has allocated a Bt40-million budget to finance a programme of the Thailand Automotive Institute, the Federation of Thai Industries and the association of parts-makers.
       The programme aims to put the Eco Car project into action, as the products would create new opportunities for manufacturers.
       Covering 52 auto companies, including parts-makers, the survey showed that small firms had been the most affected by the global economic crisis, which led to a plunge in automotive demand. They have suffered from lower orders and the rising cost of raw materials.
       The survey found that 75 per cent of the 52 companies had reduced their production earlier this year, while some witnessed credit defaults and financial institutions tightened lending criteria, which led to a liquidity shortage.
       Most of them, 71.2 per cent, commented that the government's measures had failed to respond to their needs, while 28.8 per cent considered the measures worked fairly.
       Some 44.2 per cent of the respondents said they were severely affected by the crisis. Meanwhile, 96.4 per cent implemented emergency plans, which mostly involved a reduction in overtime payments, a cut in product prices, the extension of credit lines to customers, lay-offs and greater emphasis on the domestic market.
       "The manufacturers maintain the view that they need to focus on exports and penetrate new markets," Arthit said.
       The office also conducted a consumer survey in Bangkok and peripheral provinces. Covering 400 respondents, 19.7 per cent of them cited a plan to buy a car in the latter half of 2010, while only 1.3 per cent plan to buy one within the next three months.
       The survey found 46.3 per cent of the respondents had no plan to buy a car at this time, while 26.5 per cent said their decision depended largely on economic conditions.
       Factors affecting their decision are financial readiness, at 22.6 per cent, and the necessity of having a car as well as price, 21.2 per cent.