Importance of automobile sector
in Thai economy
By Jon Fernquest |
The automobile sector in Thailand is leading other sectors of the Thai economy in growth according to an article in Wednesday's Bangkok Post business section.
(See photo on right of the insides of Toyota's new Prius Hybrid Electric Vehicle (HEV))
The growth of Thailand's automobile industry is driven by both exports and domestic demand:
"Domestic car production will likely increase by nearly 10.85% to 1.43 million units this year from 1.29 million units last year on the back of better consumer confidence and strong export growth.The output for export will rise by 11.78% to 770,283 units this year, or 54% of total production, roughly the same proportion as last year...
Output for domestic sales this year would be 656,771 units, an increase of 9.78% from last year. Total domestic sales are expected to be around 680,000 units, slightly higher than the output, to be met by leftover stocks from last year, when buyers delayed their decisions in order to enjoy cheaper E20 car prices."
The industry relies on technology know-how provided by foreign partnerships.
The success of this industry highlights the importance of the Thai-Japanese economic partnership and the free trade agreement signed signed by the two countries:
The higher export production is the result of long-term production plans by global carmakers such as Toyota and Nissan.
The technological innovations such as alternative fuels and perhaps hybrid electric vehicles (HEC) such as the Toyota Prius in the near future will become more important as oil prices rise as expected this year.
The Thai government has already provided incentives for purchasing a car with the new E20 fuel technology:
The government has reduced excise taxes to 25% from the normal 30% rate for cars that use E20, a mixture of 20% ethanol and 80% gasoline, effective early 2008.Carmakers launching new E20 models this year include Honda, Ford, Mazda, Mitsubishi Lancer, Nissan and Toyota, as well as Volvo.
Motorcycle sales, both domestic sales and exports are expected to pick up this year after last year's slight dip in sales:
Mr Surapong said motorcycle production would rebound to post 19.6% growth to 1.97 million units in 2008, after falling 20.65% to 1.64 million units in 2007 as a result of the stagnant economy.Motorcycle exports this year would triple from last year's figure to 335,523 units, thanks largely to Suzuki's expansion plan to export 200,000 units to Asian markets.
Read more Bangkok Post articles on Thailand's automobile industry and transportation sector and related news on developments in Thailand's oil and energy sector.
Also check out the online Bangkok Post motoring section which is published every Friday.
(Source: Bangkok Post, business, 23-01-08, temp-link)
Vocabulary:
Hybrid Electric Vehicle (HEV) - a car that combines the regular car engine with a battery to economise on fuel, "regular HEVs most commonly use an internal combustion engine (ICE) and electric batteries to power electric motors. Modern mass produced HEVs prolong the charge on their batteries by capturing kinetic energy via regenerative braking, and some HEVs can use the combustion engine to generate electricity by spinning an electrical generator (often a motor-generator) to either recharge the battery or directly feed power to an electric motor that drives the vehicle. Many HEVs reduce idle emissions by shutting down the ICE at idle and restarting it when needed. An HEV's engine is smaller and may be run at various speeds, providing more efficiency." (See Wikipedia)
X on the back of Y - X happens after and is helped by Y
leftover - the amount that remains after something is consumed (for example, I put the leftover curry in the refrigerator)
know-how - knowledge of techniques and methods of how to do something, practical knowledge
alternative - different choices that can be used instead of the one you are currently using
hybrid - a mixture or combination of two other things
provided incentives for - give people rewards for doing what you want them to do
excise taxes - government tax on goods produced and sold in the country
E20 - "E20 contains 20% ethanol and 80% gasoline. Since February 2006, this is the standard ethanol-gasoline mixture sold in Brazil, where concerns with the alcohol supply resulted in a drop in the ethanol percentage, previously at 25%. Brazilian flexible-fuel cars are set up to run with gasoline in such concentration range and few will work properly with lower concentrations of ethanol.[3][4]. U.S. FFV can run below 20% ethanol, but up to E85. This fuel is not yet widely used in Australia or the United States. It will be mandated by the U.S. state of Minnesota by 2013. Available also in Thailand with tax reductions for "E20" engine cars." (See Wikipedia on E20 fuel)
pick up - an improvement, increased activity after a slowdown in activity
dip in sales - small temporary decrease in sales
rebound - increase again after falling
stagnant economy - a slow economy without much economic activity
expansion plan - future plans for increasing the size of a business
