Auto exporters wish baht could be fortified

[webfact]

Auto exporters wish baht could be fortified

By The Nation

 

 

Auto exporters are hurting because of the baht’s appreciation and some are calling for the government to take remedial action.

 

The baht his a six-year high last month at 30.62 to the dollar and is still fluctuating, raising concern among major auto exporters like Mitsubishi and Toyota.

The two companies export more than 600,000 vehicles combined from Thailand each year.

 

Mitsubishi Motors Corp chairman Osamu Masuko, in Thailand recently to celebrate his company’s four-million-unit export milestone, said it was deeply concerned about the baht’s appreciation.

 

“If we have a chance to talk with the government, our request would be to help look after the baht’s value and, if possible, we would like it to be 10 per cent lower than at present,” he said, adding that the feeling is shared not just at Mitsubishi but across an industry that depends on exports.

 

 

Mitsubishi’s assembly plant at Laem Chabang Port is its largest outside of Japan and employs 7,000 people.

 

Toyota Motor Thailand Co Ltd president Michinobu Sugata acknowledged that the strong baht had affected the company’s exports.

 

But he said Toyota – Thailand’s top auto producer – had not adjusted plans or lowered production as a result.

 

He said Toyota wants to stick to its global plan for 2019, which includes exporting 270,000 units, down 8 per cent from last year due to lower demand in Central America, South America and Oceania.

 

“The stronger baht is affecting not only Toyota but other industries that depend on exports also,” Sugata said.

 

“Perhaps our profits will be lower due to an expected decline in domestic sales and exports. We are still holding on to our 577,000-unit production target, which is just 2 per cent lower than last year.”

 

Source: https://www.nationthailand.com/auto/30374336

 

-- © Copyright The Nation Thailand 2019-08-07

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[Matzzon]

When the car producers starts to complain it´s time to listen. Many countries have made the mistake to not, with the result that they move out of the country and produce somewhere else. It´s a big blow for a country. Have been waiting to hear this "beep" from them.

[mikebell]

Sod the car industry, my pension is dwindling out of sight.

[graemeaylward]

Now is the time that ALL car manufacturers should be turning their sights towards electric cars, as the time is fast running out for fossil fuel cars!


Sent from my iPad using Thaivisa Connect

[nausea]

"Fortified" means strengthened, just saying.

[Damrongsak]

1 hour ago, Matzzon said:

When the car producers starts to complain it´s time to listen. Many countries have made the mistake to not, with the result that they move out of the country and produce somewhere else. It´s a big blow for a country. Have been waiting to hear this "beep" from them.

Never mind.  Zero Baht Chinese tourists will make up for the shortfall.  Lose money on each one, just make it up on volume. 

[sammieuk1]

If possible I would like a north of 50bt for my sniveling pound also preferably before I cut myself in two with my own belt????

[SmartyMarty]

won't happen anytime soon as that would require intelligence.

[legend49]

27 minutes ago, nausea said:

"Fortified" means strengthened, just saying.

Ok thx only fortified things I have is wine.

[Cadbury]

This is where Thailand's car industry is headed. The future is not looking good, with or without a high baht.

 

https://www.asiatimes.com/2019/07/article/vietnam-aims-for-thailands-auto-making-crown/

[worgeordie]

The government's response, but,but, we need to have good exchange rates

for the expected increase in commissions,from buying weapons of war,and

bg projects,and need a strong Baht,when we transfer the loot to overseas banks.

regards worgeordie

 

[hotchilli]

1 hour ago, mikebell said:

Sod the car industry, my pension is dwindling out of sight.

The last two years has seen 20% knocked off my pension... that hurts !

[PatOngo]

1 hour ago, mikebell said:

Sod the car industry, my pension is dwindling out of sight.

My baht salary is looking better by the day!

[Enzian]

People complained that the military government was bad for the economy, but the baht has just been getting stronger for the past few years; how does that work?

[Isaan sailor]

No worries.  They will move production to low cost countries like communist China and Vietnam.  And Thailand has inked bi-lateral trade deals with the ChiComs. So cars will cost us less!

[NightSky]

49 minutes ago, PatOngo said:

My baht salary is looking better by the day!

Why if you are using it in Thailand?

 

prices will eventually increase for all local goods and products that are made using any kind of imported goods.

 

it’s not good for you either unless your prized Thai salary is enough to make overseas investments.

[Pib]

 

Quote

“If we have a chance to talk with the government,...

Make me laugh.   I'm sure they talk to the govt in smoke filled back rooms, office visits, phone calls, and anonymous gifts/stuff envelopes all the time.

[Eric Loh]

Auto manufacturers are not complaining when they gained from massive financial benefits from government incentives and trade protection for domestic producers. They also not complaining about exchange gains from imported car parts. Guess they want it all as long as long as they made big profit and send them back to corporate Japan. 

[PatOngo]

27 minutes ago, NightSky said:

Why if you are using it in Thailand?

 

prices will eventually increase for all local goods and products that are made using any kind of imported goods.

 

it’s not good for you either unless your prized Thai salary is enough to make overseas investments.

???? It is!

[Bob12345]

1 hour ago, Enzian said:

People complained that the military government was bad for the economy, but the baht has just been getting stronger for the past few years; how does that work?

"The economy" often refers to GDP, or GDP growth. The value of a currency is something else.

 

Edit: to give an example. If the BoT increases the interest rate to 10% the value of the baht will skyrocket (as people want to hold baht to earn that high interest) but the economy will crash (as nobody will want to borrow money at 10% and consumption and investments will drop).

[lesmac]

Thais will do nothing. they have to vote with their feet

 

[tjo o tjim]

With Tesla’s new plant in Shanghai starting production soon, it should put some pressure on gas vehicle sales in the region as well. Too bad Thailand has missed out on EVs almost entirely with their manufacturer base...

[Angry Dragon]

2 hours ago, NightSky said:

Why if you are using it in Thailand?

 

prices will eventually increase for all local goods and products that are made using any kind of imported goods.

 

it’s not good for you either unless your prized Thai salary is enough to make overseas investments.

Huh?  with a stronger baht imported goods cost less, thus shouldn't prices eventually decrease for all local goods and products that are made using any kind of imported goods?

 

i like som tam.  som tam contains little tomatoes.  thailand imports little tomatoes.  the baht is now stronger, so little tomatoes are less expensive to import.  maybe my som tam maker will pass some of the savings onto me?

[soalbundy]

6 hours ago, Matzzon said:

When the car producers starts to complain it´s time to listen. Many countries have made the mistake to not, with the result that they move out of the country and produce somewhere else. It´s a big blow for a country. Have been waiting to hear this "beep" from them.

setting up a new factory and training new workers is not an easy task. Building a car in a modern factory is a complicated process, it isn't just nuts and bolts, there are computer aided systems that deliver the required parts to a particular car on the production line at the right moment. Line workers are not the numbskulls of yesteryear and require intensive training, there are also the problems of waste disposal and environmental laws that have to be met, different wage structures, different tax laws, etc.

[Ctkong]

5 hours ago, Damrongsak said:

Never mind.  Zero Baht Chinese tourists will make up for the shortfall.  Lose money on each one, just make it up on volume. 

Current trade war with America is hurting Chinese economy across the board.  China also devalued RMB recently making Thai bath exchange rate too high for penny conscious Chinese zero baht tourists.

[Ctkong]

2 minutes ago, soalbundy said:

setting up a new factory and training new workers is not an easy task. Building a car in a modern factory is a complicated process, it isn't just nuts and bolts, there are computer aided systems that deliver the required parts to a particular car on the production line at the right moment. Line workers are not the numbskulls of yesteryear and require intensive training, there are also the problems of waste disposal and environmental laws that have to be met, different wage structures, different tax laws, etc.

Also the countless foreign supporting industries making small parts for the assemblers to consider as well as the local supporting industries. 

[Ctkong]

51 minutes ago, Angry Dragon said:

Huh?  with a stronger baht imported goods cost less, thus shouldn't prices eventually decrease for all local goods and products that are made using any kind of imported goods?

 

i like som tam.  som tam contains little tomatoes.  thailand imports little tomatoes.  the baht is now stronger, so little tomatoes are less expensive to import.  maybe my som tam maker will pass some of the savings onto me?

Som tam tomatoes used are different from imported varieties. They are only unique to Thailand. 

[drbeach]

7 hours ago, Matzzon said:

When the car producers starts to complain it´s time to listen. Many countries have made the mistake to not, with the result that they move out of the country and produce somewhere else. It´s a big blow for a country. Have been waiting to hear this "beep" from them.

Indeed. That was one of the key reasons why car manufacturing ended in Australia. At the time of making their decision in 2013, the 3 major car manufacturers that remained had to cope with an Aussie dollar that was stronger than the USD! Now it's been hovering at or around 70 US cents for some time now, around 2 years at least. Had the AUD been as weak as it is now, back in 2013, chances are the car industry would have stayed in Australia for a few more years yet, probably until at least 2022 or so (as Holden indicated a few years before they made their fateful decision).

[drbeach]

42 minutes ago, soalbundy said:

setting up a new factory and training new workers is not an easy task. Building a car in a modern factory is a complicated process, it isn't just nuts and bolts, there are computer aided systems that deliver the required parts to a particular car on the production line at the right moment. Line workers are not the numbskulls of yesteryear and require intensive training, there are also the problems of waste disposal and environmental laws that have to be met, different wage structures, different tax laws, etc.

That's true but that hasn't stopped car manufacturers moving into Myanmar. Granted, for now we're talking CKD vehicle manufacturing, not CBU as in Thailand with most inputs being imported, but the fact that manufacturers like Nissan think it's worthwhile making an investment in that country to build just 1500 cars a year says something. It means they are willing to train workers and take the risk, including having to cope with a country where power cuts are still an everyday occurrence.

 

Therefore, it may be easier than you think to shift countries. Auto manufacturers seemingly moved out of Australia very easily, and into Myanmar (and Cambodia in the case of Hyundai) despite the obstacles so that means they see something there. Samsung is building capacity in Vietnam and gradually moving out of China. Ditto for the hordes of clothing and textile manufacturers. Slowly but surely, "made in China" on your shoes is being replaced with "made in Vietnam" and "made in Bangladesh" for t-shirts.

[Matzzon]

1 hour ago, soalbundy said:

setting up a new factory and training new workers is not an easy task. Building a car in a modern factory is a complicated process, it isn't just nuts and bolts, there are computer aided systems that deliver the required parts to a particular car on the production line at the right moment. Line workers are not the numbskulls of yesteryear and require intensive training, there are also the problems of waste disposal and environmental laws that have to be met, different wage structures, different tax laws, etc.

But it´s better than not selling cars, right?