Thailand car makers slash output by half for 6 weeks
With the shortage of parts from Japan now biting into their revenue position, Thailand's car companies have slated steep production cutbacks for six weeks starting this week.
The cuts will bring the industry's output lower by half on average-an estimated 150,000 new units-which would mean losses of up to 75 billion bahts (US$2.5 billion) in potential sales revenue over the period to June 4, Thailand media reports last weekend said.
The car makers said they have not been able to operate at normal speed because their parts suppliers in Japan were facing production dislocations caused by the March 11 earthquake and tsunami and the nuclear power crisis later.
Thailand's automobile industry reputedly is the largest in Southeast Asia and imports "billions of bahts worth" of vehicle parts from Japan. The automakers include Toyota, Honda, Isuzu, Nissan, General Motors, Hino, Mitsubishi, and Suzuki.
At Toyota Motor Thailand, the industry leader in terms of output and sales, the planned production cuts could go as deep as 70 percent, according to the Bangkok Post.
Starting April 25, work at Toyota Thailand's three plants would be suspended Mondays and Fridays until June 4, and production levels from Tuesdays to Thursdays would be at half of capacity, company senior vice president Vudhigorn Suriyachantananont was quoted by the media as saying.
All of Toyota's 7,000 factory workers would remain on the payroll during the production cuts, while car deliveries to customers would be delayed, the company said.
At Honda, production plants in Ayutthaya continue to operate daily although work lasts less than eight hours a day depending on parts availability, Bangkok Post quoted a company official as saying.
Tri Petch Isuzu Sales Co. has halved production at its two Isuzu plants until the end of May, at which time future options will be studied.
Mitsubishi Motor Thailand, on the other hand, has not changed production levels as it has "a sufficient stock of parts to assemble our vehicles," according to a company official.
Meanwhile, Wallop Tiasiri, director of the Thai Automotive Institute, said the industry had earlier targeted to produce 130,000 units in April, 150,000 in May, and 160,000 units in June. These targets have now been cut by half, he said.