The local automobile industry recovered in September as industry-wide production surpassed the 100,000-unit mark for the first time this year. Vehicle exports also posted the highest level for the year last month, according to the Federation of Thai Industries (FTI). Production in September totalled 103,390 units, down 16.5% year-on-year but up 22.8% from the previous month. ”The highest production in September was attributed to local vehicle sales, which picked up significantly to 48,649 units, the highest in 16 months,” said Surapong Paisitpatnapong, a spokesman for the FTI’s automotive industry club. While exports for the month dipped 33.71% year-on-year to 49,542 units, the figure was 14.72% higher than in August, he added. Asia and Australia were the only two export markets for Thai-built vehicles showing signs of improvement, as the export contractions for both markets became smaller in September.

Vehicle exports to Asia in September contracted by only 8.8% year-on-year compared to the largest contraction of 55.6% in May. Sales to Australia fell 0.8% compared the largest contraction of 55.9% in March. Other markets including Europe, the Middle East, Africa and Central and South America showed no signs of improvement in September. Exports to Europe fell 77.6% year-on-year, the poorest showing among these markets. Mr Surapong said vehicle exports were expected to meet the target of 510,000 units for 2009 as actual exports reached 363,987 in the first nine months. “So, it seems it will not difficult for the industry to make it,” he said. As the industry shows signs of steady recovery, he said total local automobile sales for 2009 were expected to slightly exceed the earlier modest target of 480,000 units, probably reaching 500,000 to 520,000 units. Production could exceed the 940,000- unit target by a small margin but would not hit the one-million mark, he said.

Thai auto exports in September slumped by a third year-on-year but posted the highest monthly figure for 2009 amid signs of an improving global market, an industry group said Tuesday. The Federation of Thai Industries (FTI) auto club said vehicle shipments fell by 33.71 percent from the same month last year to 49,542 units. Despite the plunge, exports were up 14.72 percent from August, and more units were sold in September than in any previous month this year. ”The market in Asia and Australia is improving and there are more orders from the European market,” said auto club spokesman Surapong Paisitpatpong. In terms of value, the auto exports in September registered at 23.9 billion baht (798 million dollars), down 30.04 percent fall year-on-year. For the first nine months of this year Thai vehicle shipments plunged 39.29 percent from a year earlier to 363,987 units.

Surapong said he expected a total of 510,000 exports in 2009 as a whole — down 39 percent from last year.

The government has set an export growth target next year of between 10%and 15%, aiming to increase shipments both to established key markets and new markets. “The government’s trade promotion next year will focus specially on small and medium-sized enterprises, which currently bring the country exports worth up to Bt1.69t a year, or about 28.9% of total exports,” said Commerce Minister Porntiva Nakasai. (Bangkok Post)

Thailand’s exports would likely see a double digit-growth next year due to the emerging signs of an economic recovery, Department of Export Promotion director-general Rachane Potjanasuntorn said on Sunday. “I believe Thai exports would attain growth in double digit next year because there are signs indicating that the global economy has considerably improved,” he said. The Commerce Ministry previously forecast that next year’s exports would expand by 12% to 15%. (Bangkok Post)

The government has been urged to cut withholding and income taxes applying to exporters as an urgent measure to boost export growth in the remaining months of 2009. The call was made yesterday by exporters themselves, saying that proposed cuts to import duties may be ineffective in bolstering export growth in all sectors. Next week the Commerce Ministry is to propose a cut in import duties to the Cabinet, as a measure to promote export growth in the second half of the year. (The Nation)

Thailand’s exports still have a chance to contract by a modest 5-10% if the government rapidly extends loans to ease liquidity problems for local industries and exporters, according to the Thai Chamber of Commerce. “The most effective stimulus measure to improve exports right now is accelerating loan extensions,” said Pornsil Patchrintanakul, the deputy secretary-general of the chamber. “Tight liquidity remains unaddressed and the credit extension by local banks is still moving at a snail’s pace despite government pledges to speed up their lending activities.” (Bangkok Post)

Thailand’s exports rose for the third consecutive month in July, making the government increase its export projection for the year to a contraction of 10-18%. The previous forecast projected exports to shrink by 15-19% YoY. Thai shipments in July increased to US$12.9b, their highest value in seven months, from US$12.33b in June and US$11.65b in May. The export decline on a yearly basis also eased in July due to improving overseas demand. The contraction was 25.68% compared to 25.92% in June, 26.6% in May, 26.1% in April and 26.4% in January. The marginal improvement was mainly due to a reduced contraction for shipments of agricultural and agro-industrial and industrial products. July exports of key agricultural and agro-industrial products contracted by 28.4% YoY, but the figure edged up by 0.8% from June. Shipments of industrial products fell by 22.6% YoY but rose 4.7% from June. (Bangkok Post)

Production improvement from exports- June indicators confirmed modest recovery in production. Manufacturing production rose 3%MoM, another positive growth for the past five months. On a yearly basis the index fell 7.8% vs 10% fall in May. Production improvement confined to hard disk drives, canned seafood and electrical appliances from pick up in exports. Auto production improved from 50% YoY fall since 4Q08 to 29% contraction in June. Farm output fell 6.3% after a10% fall in May. Tourist arrivals fell 18.6%YoY. Private consumption fell 2.7%YoY vs 4.7% fall in May. The index rose 2.6%MoM from higher auto sales, VAT and consumer goods imports. Private investment index fell 15.5% YoY but was up 1.1% MoM. The increase was from MoM rise in cement sales (+2.6%MoM) and capital goods imports (+1.4%MoM).

Although manufacturing production showed a strong pick up (+10%QoQSA), the pick up is confined to selected exports and not broad-based. Overall, domestic demand remains weak. Private investment showed no growth in 2Q while private consumption grew only 1.1%QoQ. Fiscal policy did not support the economy in 1H because disbursement was moderate. Falling agricultural prices, A(H1N1) and politics also dampened agriculture and tourism sectors. We do not expect material recovery in private spending. Therefore, 2H09 growth will depend primarily on export recovery and govt spending.