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Shaky Thai economy sends new-car sales skidding 40%

Sales of new cars in Thailand fell almost 40 percent in 1997 compared to the year before, according to January figures.

The 38.4 percent plunge in sales, to 363,156 units, mirrors a severe general economic downturn, which has seen large-scale layoffs in industry and drastic drops in discretionary incomes.Thailand, a key manufacturing center for Japanese automakers, has the biggest automobile industry in Southeast Asia. New vehicle sales reached a record high of 589,126 units in 1996. U.S. automakers then rushed to expand operations in Thailand as industry analysts predicted sales would reach a million units by 2000.

The economic crisis has now caused most manufacturers to scale down their plans.

General Motors will delay the opening of a $450 million manufacturing plant in Thailand until after 1999 and will reduce the plant's capacity to 40,000 cars a year from the 100,000 originally planned. Toyota, Nissan and Honda have also cut production in Thailand.

The auto sales slump was deepest in the commercial vehicles segment, where sales fell 44.5 percent to 231,096 units.

Passenger car sales declined 23.5 percent to 132,060 units, while sales of 1-ton pickup trucks fell 42.5 percent to 188,324 units.

Nissan recorded the biggest sales drop among Japanese automakers in Thailand with sales down 54.3 percent to 42,569 units.

Toyota saw its sales decline 34.7 percent to 107,121 units, but continued to command the biggest market share.

Isuzu recorded a decline of 32.4 percent to 82,519 units, while Honda suffered a relatively mild 12.4 percent drop to 37,157 units.

Separately Monday, Satoshi Toshida, president of Asian Honda Motor Co., said output at Honda Motor Corp.'s car plant in Thailand is unlikely to return to full capacity for at least two years.

Toshida said the plant will likely produce 30,000 vehicles in 1999, only half of the plant's total capacity of 60,000 vehicles.