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Economy

Thai auto production tops 2m, first time in 5 years

Brisk domestic demand drives 9% increase, but trade war hampers 2019

An employee works at a Mitsubishi Motors plant in Thailand. The country is known as the "Detroit of Asia" for its car production.
An employee works at a Mitsubishi Motors plant in Thailand. The country is known as the "Detroit of Asia" for its car production.

BANGKOK -- Thailand produced more than 2 million automobiles last year, surpassing that mark for the first time since 2013 thanks to a rebound in domestic demand.

Production volume rose 9% to 2,167,694 units in 2018, according to the Federation of Thai Industries. Output for the domestic market jumped 19% to 1,024,961 vehicles, while exports edged up 1% to 1,142,733. Thailand, known as the "Detroit of Asia," typically exports more than half of its auto output to other markets.

Demand in the country benefited from the consumers who took advantage of a 2012 car-buying incentive and fulfilled the requirement to keep the vehicle for five years. Economic stimulus aimed at helping low-income consumers also helped, the industry group said.

The incentive program introduced by then-Prime Minister Yingluck Shinawatra's government boosted Thailand's auto production to 2.45 million units in 2013. But volume sank below 2 million from 2014 -- the year of a military coup -- through 2017.

Last year's increase came despite pressure on exports "as the global economy slowed down," said a representative from the federation.

Fallout from China-U.S. trade frictions should cut auto production in Thailand this year by 1% to 2.15 million units, the federation projects. Exports are seen shrinking to 1.1 million vehicles while domestic volume rises to 1.05 million.

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