Thailand's booming autos exports help plug gaping tourism hole

Bangkok

AS tourism-reliant Thailand struggles with a collapse in foreign visitors, the country's auto sector is picking up some of the slack with the value of car exports tipped to surge to a record this year as the global economy reopens.

The South-east Asian nation is Asia's second-most popular tourist destination but its famous beaches, street markets and pagodas have been starved of business over the past year due to pandemic restrictions that have crippled global travel.

While Thailand's central bank has downgraded its projections for this year's economic growth due to the hit to consumption and tourism, it last week raised its 2021 export growth forecast to an 11-year high of 17.1 per cent, up from the 10 per cent rise forecast in March.

Much of that is thanks to exports of cars, parts and accessories, Thailand's biggest shipment, which surged 170 per cent year-on-year in May, the fastest pace in more than eight years, customs data showed.

"Exports are now a main engine driving the economy," Thai Commerce Minister Jurin Laksanawisit told reporters this month.

"We have to admit that our tourism still can't get going." Thailand is Asia's fourth-largest autos assembly and export hub for some of the world's largest carmakers such as Toyota and Honda. The industry accounts for about 10 per cent of Thailand's GDP and manufacturing jobs.

The sector has been able to shake off the disruptive impact of Covid-19 much faster than the tourism industry. Auto parts maker AAPICO Hitech, which has 4,500 workers, is running at full capacity 24 hours a day, company president Yeap Swee Chuan told Reuters, a stark contrast to last year's factory slump when the pandemic hit.

"Last year was not good at all, but this year should be sunshine," he said, targeting sales growth of 20 per cent and much higher profits this year."

Thailand's latest and biggest coronavirus outbreak so far, which started in April, has slowed domestic activity, dealing a deeper blow to the country's already fragile economic recovery. But the fallout on auto car sales has been limited, while the auto sector boom has been driven by overseas demand.

The Federation of Thai Industries (FTI) said the country's exports of completely built cars could reach 800,000 to 850,000 units this year, beating its target of 750,000 and versus about 736,000 in 2020. REUTERS