January 21, 2013 / 11:37 AM / in 5 years

UPDATE 1-Thailand's 2013 auto sales may fall 16 pct-Toyota

* Sees sales falling to 1.2 mln vehicles this year

* Compares with record 1.43 mln in 2012

* Cites ending of first-time buyer subsidies

* Toyota Thai sales seen down 3.1 pct to 500,000 units

* Says to invest 12 bln baht in new plant this year (Adds details)

BANGKOK, Jan 21 (Reuters) - Thai automotive industry sales look set to drop 16 percent in 2013, retreating from a record 2012 boosted by government subsidies, Toyota Motor Corp’s Thai unit said on Monday.

The group said it expected sales to decline to 1.2 million vehicles this year, after an 80 percent surge in 2012 fuelled by government subsidies for buyers of first cars.

Industry sales had jumped to a record 1.43 million vehicles in 2012, also boosted by pent-up demand after severe flooding in late 2011, Kyoichi Tanada, president of the Toyota Motor Thai unit, told a news conference.

“Thai auto sales this year will not fall much from last year. We think the economy will still be good, but there is no first-car scheme this year,” he said.

For Toyota itself, 2013 sales are set to fall 3.1 percent to 500,000 units, giving it a 40 percent market share, with sales of passenger cars down 11 percent. It aims for exports of 412,000 vehicles worth 168 billion baht this year, plus 70 billion baht of auto parts.

In 2012, its auto sales jumped 78 percent to 516,086 vehicles, with passenger cars up 62.8 percent.

Toyota plans to invest 12 billion baht ($404 million) in the southeast Asian country to build a second plant at the Gateway industrial park to produce environmentally friendly cars as well as vehicles for export, Tanada said.

The plant is expected to be completed in the middle of this year, which will help boost the firm’s capacity at Gateway to 300,000 units per year from 220,000.

Vice Chairman Ninnart Chaithirapinyo said risks to exports included a stronger baht, caused by capital inflows, and economic problems in the United States and Europe.

Thailand’s daily minimum wage rose to 300 baht ($10) this month and Tanada said the company would have to increase productivity by measures such as increased automation to help reduce costs.

The daily minimum wage rose by an average 25.5 percent from Jan. 1, depending on the region, on top of a 40 percent nationwide increase last April. (Reporting by Pisit Changplayngam and Pairat Temphairojana; Writing by Orathai Sriring; Editing by David Holmes)

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