New market study, "Thailand Autos Report Q1 2012", has been published
08.02.2012 18:10:21 - Fast Market Research recommends "Thailand Autos Report Q1 2012" from Business Monitor International, now available
(live-PR.com) - The outlook for Thailand's autos industry has deteriorated sharply over the last quarter as a result of the devastating floods that swept across the country in October and November 2011. All of the country's eight major automakers had to suspend production temporarily as flood waters entered production facilities and disrupted supply lines. Although some of the country's plants are slowly
resuming production, the floods - which were the worst to hit the country in 50 years - will have a clear impact on production levels for 2011, with other key facilities not due to resume production until 2012.
In mid-November, the Thai government said that it was considering several measures to ensure auto manufacturing can return to full capacity as soon as possible. This is particularly pertinent as other neighbouring countries are also seeking to establish themselves as rival export hubs. Deputy Prime Minister Kittiratt Na-Ranong has said that the government has put together assistance packages for businesses affected by the floods, which will include emergency loans. He also emphasised that the assistance is for foreign as well as domestically owned businesses. This is especially important to the auto sector, where the biggest investors are international carmakers, particularly Japanese brands that were already dealing with the effects of the Japanese earthquake and tsunami in March.
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Full Report Details at
- www.fastmr.com/prod/327020_thailand_autos_report ..
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As an indication of the impact of the floods on domestic production, output dropped from 174,212 units in September to just 49,439 units for October. The cumulative 10-month figure now stands at 1,334,674 units, with the Federation of Thai Industries now believing that local production for 2011 will fall back to around the 1.5mn unit level as a result of the floods, down from a total of 1,644,513 units in 2010. BMI shares this view and has made a similar downwards revision to our own 2011 production forecasts, to reflect the loss of output caused by the recent flooding. Our forecasts are now calling for an 8% decline in auto output for the year as a whole. Exports have also been affected, with the Federation of Thai Industries announcing that auto exports fell by 36.6% y-o-y during October, down to 50,913 units.
The worst-affected manufacturer was Honda Motor, whose main production facilities lie to the north of Bangkok in central Ayutthaya province. To help the Japanese automaker recover lost output, the Thai government is to allow Honda to import assembled cars tariff-free until June 2012, according to a report on Reuters. In addition, all auto manufacturers have been allowed to import parts and machinery tarifffree to replace those damaged by floodwaters.
The recent flooding will also have an impact on new car sales, which had been growing strongly over the first nine months of 2011. Indeed, from a total of 87,012 passenger car and commercial vehicle sales in September, there were only 42,873 such sales in October, a drop of over 50% month-on-month (m-o-m). Against this backdrop, we believe it is only prudent to make a downward revision to our 2011 new car sales forecast for Thailand. We now believe that new car sales will only increase by 4% for the year as a whole, to reach 814,244 units, with risks to the downside if disruption to supply continues until year-end. This marks a severe slowdown from the 21% increase in sales seen over the first half of the year. Consumer-facing sectors in Thailand have come under pressure from recent floods in the country, with the tourism and retail sectors most negatively affected by the catastrophe. Retailers and logistics suppliers are facing distribution challenges in the flood-affected areas, and panic buying underlines the severe impact of the floods on the retail sector. Consumer purchasing power has inevitably come under greater strain as citizens' properties and homes were damaged. Over the reconstruction process in the coming months, discretionary consumer spending is likely to be put on the back burner. However, over the longer term we think domestic demand will remain the bright spot in Thailand's economic outlook. Despite economic headwinds quickly piling up - including growing double-dip risks in the US, eurozone banking sector instability and a potential China hard landing - we believe domestic demand should remain well-supported over our forecast period on the back of positives such as tight labour market conditions and the government's initiatives to boost rural incomes.
Headline Industry Data (local currency)
* 2012 food consumption growth = +6.4%; compound annual growth rate (CAGR) forecast to 2016 = +6.2%
* 2012 soft drinks sales growth = +7.6%; CAGR forecast to 2016 = +7.1%
* 2012 alcoholic drinks sales growth = +7.1% CAGR forecast to 2016 = +6.7%
* 2012 mass grocery retail sales growth = +6.8; CAGR forecast to 2016 = +7.3%
Key Industry Trends
Bottled Water An Enticing Opportunity For Aje Thai: In November 2011, Aje Thai, the Thai bottler of Big Cola soft drinks, decided to modify two of its soft drink production lines in the Thai province of Chonburi to produce bottled water under its Cielo brand. Aje Thai currently produces an average of 200,000 bottles of water a day, and its modification plans will bring its bottled water production capacity to 400,000 bottles of water a day. Clearly, a near-term motivation behind Aje Thai's plan is the recent surge in bottled water demand caused by the widespread floods in Thailand. Looking over the longer term, Aje Thai's expansion should place it in a stronger position to capitalise on the expected outperformance of the non-carbonates sector.
However, beyond the current year, we remain optimistic on the future direction of both car sales and production within Thailand. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=101 ..
About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
For more information about these or related research reports, please visit our website at www.fastmr.com or call us at 1.800.844.8156.
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In mid-November, the Thai government said that it was considering several measures to ensure auto manufacturing can return to full capacity as soon as possible. This is particularly pertinent as other neighbouring countries are also seeking to establish themselves as rival export hubs. Deputy Prime Minister Kittiratt Na-Ranong has said that the government has put together assistance packages for businesses affected by the floods, which will include emergency loans. He also emphasised that the assistance is for foreign as well as domestically owned businesses. This is especially important to the auto sector, where the biggest investors are international carmakers, particularly Japanese brands that were already dealing with the effects of the Japanese earthquake and tsunami in March.
------------------------------------------------------------
Full Report Details at
- www.fastmr.com/prod/327020_thailand_autos_report ..
------------------------------------------------------------
As an indication of the impact of the floods on domestic production, output dropped from 174,212 units in September to just 49,439 units for October. The cumulative 10-month figure now stands at 1,334,674 units, with the Federation of Thai Industries now believing that local production for 2011 will fall back to around the 1.5mn unit level as a result of the floods, down from a total of 1,644,513 units in 2010. BMI shares this view and has made a similar downwards revision to our own 2011 production forecasts, to reflect the loss of output caused by the recent flooding. Our forecasts are now calling for an 8% decline in auto output for the year as a whole. Exports have also been affected, with the Federation of Thai Industries announcing that auto exports fell by 36.6% y-o-y during October, down to 50,913 units.
The worst-affected manufacturer was Honda Motor, whose main production facilities lie to the north of Bangkok in central Ayutthaya province. To help the Japanese automaker recover lost output, the Thai government is to allow Honda to import assembled cars tariff-free until June 2012, according to a report on Reuters. In addition, all auto manufacturers have been allowed to import parts and machinery tarifffree to replace those damaged by floodwaters.
The recent flooding will also have an impact on new car sales, which had been growing strongly over the first nine months of 2011. Indeed, from a total of 87,012 passenger car and commercial vehicle sales in September, there were only 42,873 such sales in October, a drop of over 50% month-on-month (m-o-m). Against this backdrop, we believe it is only prudent to make a downward revision to our 2011 new car sales forecast for Thailand. We now believe that new car sales will only increase by 4% for the year as a whole, to reach 814,244 units, with risks to the downside if disruption to supply continues until year-end. This marks a severe slowdown from the 21% increase in sales seen over the first half of the year. Consumer-facing sectors in Thailand have come under pressure from recent floods in the country, with the tourism and retail sectors most negatively affected by the catastrophe. Retailers and logistics suppliers are facing distribution challenges in the flood-affected areas, and panic buying underlines the severe impact of the floods on the retail sector. Consumer purchasing power has inevitably come under greater strain as citizens' properties and homes were damaged. Over the reconstruction process in the coming months, discretionary consumer spending is likely to be put on the back burner. However, over the longer term we think domestic demand will remain the bright spot in Thailand's economic outlook. Despite economic headwinds quickly piling up - including growing double-dip risks in the US, eurozone banking sector instability and a potential China hard landing - we believe domestic demand should remain well-supported over our forecast period on the back of positives such as tight labour market conditions and the government's initiatives to boost rural incomes.
Headline Industry Data (local currency)
* 2012 food consumption growth = +6.4%; compound annual growth rate (CAGR) forecast to 2016 = +6.2%
* 2012 soft drinks sales growth = +7.6%; CAGR forecast to 2016 = +7.1%
* 2012 alcoholic drinks sales growth = +7.1% CAGR forecast to 2016 = +6.7%
* 2012 mass grocery retail sales growth = +6.8; CAGR forecast to 2016 = +7.3%
Key Industry Trends
Bottled Water An Enticing Opportunity For Aje Thai: In November 2011, Aje Thai, the Thai bottler of Big Cola soft drinks, decided to modify two of its soft drink production lines in the Thai province of Chonburi to produce bottled water under its Cielo brand. Aje Thai currently produces an average of 200,000 bottles of water a day, and its modification plans will bring its bottled water production capacity to 400,000 bottles of water a day. Clearly, a near-term motivation behind Aje Thai's plan is the recent surge in bottled water demand caused by the widespread floods in Thailand. Looking over the longer term, Aje Thai's expansion should place it in a stronger position to capitalise on the expected outperformance of the non-carbonates sector.
However, beyond the current year, we remain optimistic on the future direction of both car sales and production within Thailand. View more research from Business Monitor International at www.fastmr.com/catalog/publishers.aspx?pubid=101 ..
About Fast Market Research
Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
For more information about these or related research reports, please visit our website at www.fastmr.com or call us at 1.800.844.8156.
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