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AUTOMOBILES
VICHAYA PITSUWAN
Honda Automobile (Thailand) is about to double its output by starting production at a second plant, despite gloomy export prospects for next year.
Adisak Rohitasune, senior vice-president of Asian Honda Motor, said production would start next week at the new 6.2-billion-baht plant next to the company's first plant in Ayutthaya.
The plant will have a full annual capacity of 120,000 units, bringing annual production capacity up to 240,000 units.
Mr Adisak added that Honda (Thailand) had performed well this year. He forecast that its domestic vehicle sales would reach 90,000 units this year, a 50% increase from 60,000 units last year.
Three new models - the Honda Accord, Honda Jazz and Honda City - have boosted Thai sales as the marketing strategy has abandoned a goal of one new model every four years.
For its export sales, Honda is hoping to see revenue increase to 73 billion baht, up 12% from 65 billion last year.
"This year, we have seen growth in both local and export markets," said Mr Adisak. "This may reverse in the current market downturn but we are doing well."In the second half, he said the market had shrunk slightly due to fuel prices and a poor economic outlook. But he said next year's prospects were worrying.
"Our main export destinations are Asia, New Zealand and Australia. Any alteration in the Australian economy will hugely affect our export sales."
However, the gloomy outlook is offset by news such as the continuing drop in the price of crude, which has also cut other raw material prices.
"We are currently discussing next year's prospects with our distributors. It seems that purchasing in some countries has declined while others have placed higher orders," said Mr Adisak.
He forecast the downturn would be less damaging than the 1997 crisis and that costs could be cut in order to deal with the slowdown.
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