(Adds second-half outlook, new plant)
BANGKOK, July 17 (Reuters) - Thai automotive industry sales are expected to fall 9.5 percent to 1.3 million vehicles in 2013, Toyota Motor Corp's Thai unit said on Wednesday, adding that sales were returning to a normal level after a surge sparked by a government subsidy.
First-half sales for all manufacturers stood at 740,795 cars, Kyoichi Tanada, president of the Toyota Motor Thai unit, told a news conference.
That was up 22 percent from the same period of 2012. The government offered a subsidy to first-time car buyers last year, which caused a jump in sales in the latter months of 2012 and early this year.
"The market slowdown commenced in May," Tanada said in a statement, adding it was likely to continue for the rest of the year.
In January, the Japanese car maker had said it expected Thai car sales to drop 16 percent to 1.2 million vehicles this year after an 80 percent surge in 2012.
"Some export orders had been allocated to serve first-car buyers. This resulted in higher growth than expected," Wichien Emprasertsuk, executive vice-president of Toyota Motor Thailand, told a briefing. He forecast sales in the second half of 100,000 cars per month.
For Toyota itself, 2013 sales are forecast to rise 12.8 percent to 450,000 vehicles, with sales of passenger cars down 23.5 percent.
Toyota has said it would invest 12 billion baht ($386 million) in Thailand in 2013 to build a second plant to produce environmentally friendly cars and vehicles for export. The plant will boost the firm's annual capacity at the Gateway industrial park to 300,000 vehicles per year from 220,000.
"Our second Gateway plant is currently in the process of installing machinery and will definitely be ready for production by the third quarter of 2013," Apinont Suchewaboripont, senior vice president of Toyota Motor Thailand, said.
Toyota Motor Thailand currently produces more than 800,000 vehicles and is the largest car manufacturer in Thailand. ($1 = 31.0450 Thai baht) (Reporting by Pisit Changplayngam and Siraphob Thanthong; Writing by Pairat Temphairojana and Khettiya Jittapong; Editing by Alan Raybould)