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Published on September 19, 2007

"What automotive manufacturers are concerned about is not the strong baht, but the weaker dollar. As I am informed, they have asked for permission from their parent companies to hike export prices to the US market; otherwise, they may eventually suffer losses," Industry Ministry permanent secretary Chakramon Phasukavanich said yesterday.

He said none of the companies had yet revealed how many percent they would raise their prices.

A Toyota Motor Thailand spokesman admitted his company was considering raising export prices. It exports Hilux Vigo pickups from its Samut Prakan plant.

"The stronger baht means each auto company has been considering increasing the price of the products they export, in order to offset the difference that has been created," the spokesman said. "How much that increase will be is a question that will have to be taken up with each individual importer and each auto-maker. This is a situation that the regional head of each company will have to handle. Toyota is in this process, and Toyota Motors Asia Pacific is in charge of it."

Chakramon said no one could predict how weak the dollar would become. However, some financial experts say it will probably continue to weaken until 2009, because of the US sub-prime mortgage crisis and that country's current-account deficit of more than US$1 trillion (Bt34.27 trillion).

Besides lifting export prices, auto-makers have already begun shifting exports of 1-tonne pickups to Central and South America and Europe. The new destinations boosted the industry's exports 19.45 per cent year on year in the first seven months, he said.

Meanwhile, he is confident that domestic auto sales will pick up in the rest of the year, because of motor-show events and increased confidence on the part of consumers.

Thai Automotive Institute (TAI) director Wallop Tiasiri said domestic sales in the first eight months of this year were down 9.39 per cent year on year. However, July and August sales were higher year on year.

He said representatives of all auto firms would participate in a public hearing tomorrow to formulate a new Automotive Model Scheme covering the years to 2011. The scheme, proposed by the Industry Ministry and the TAI, will focus on investment cooperation between the government and the private sector.

Moreover, it is expected to draw up plans for the new competitive environment that will follow the removal of import tariffs, which will be fully effective in 2010, he said.

Chalida     Ekvitthayavechnukul

 The Nation