UPDATE 1-Thai Sept car exports at 2-year high as Mid-East demand recovers

(Adds detail, graphic)

* Sept car exports +7.19 pct y/y, domestic sales +21.9 pct y/y

* Auto exports, domestic sales may beat targets - federation

* Demand from Middle East picks up after 3 years of slump

By Orathai Sriring and Kitiphong Thaichareon

BANGKOK, Oct 18 (Reuters) - Thailand’s car exports hit their highest in two years in September as demand from the Middle East rebounded, boosting a sector that accounts for about 10 percent of the trade-dependent economy.

Known as the “Detroit of Southeast Asia”, Thailand is a regional base for some of the world’s top carmakers including Toyota Motor and Honda Motor, and car factories employ one in 10 manufacturing workers.

Exports of whole cars rose 7.19 percent in September from a year earlier to 120,654 vehicles, the Federation of Thai Industries said.

Car exports to the Middle East rose 7.9 percent in September year-on-year after three years of declines as carmakers shipped out more pick-up trucks there, Surapong Paisitpattanapong, spokesman of the FTI’s Auto Industry club, said at a briefing on Wednesday.

That may help this year’s car exports beat a target of 1.1 million, a figure that was recently revised from 1.2 million, he said.

“September’s figures are very good,” Surapong said. “We have to see if such export levels will continue in the remaining months.”

Saudi Arabia’s decision to lift a ban on women driving cars may further boost car sales.

However, car exports fell 5.6 percent on-year to 849,982 vehicles in January-September, as demand from the Middle East was hit by lower oil prices and emission standards.

Car exports to the Middle East account for 9 percent of the total, down from 27 percent earlier, Surapong said.

But domestic auto sales jumped 21.9 percent in September from a year earlier to 77,592 cars. They rose 11.5 percent to 620,715 cars in the January-September period.

Surapong said sales might reach 850,000 units this year, a 10 percent rise on-year.

Sales have recovered in 2017 after four years of contraction following the end of a government car subsidy scheme in 2012, when sales surged 81 percent.

Higher commodity prices, stronger exports and increased government spending are helping, the FTI said.

The government forecasts economic growth of 3.5-4.0 percent this year after a growth of 3.2 percent in 2016, but Thailand still lags regional peers.