TMT frets about baht appreciation

Toyota Motor Thailand, which annually exports nearly 500,000 vehicles from three plants in Thailand, will have to devise plans to cope with the baht appreciation, said its president Kyoichi Tanada.

He said that at the current level, the company has not yet been financially affected, but troubles will arise if the baht is traded above 29 per US dollar.

The Thai baht today gained against dollar, on good news from Cyprus. It touched 29.08 on March 20, the strongest level since July 1997.

At the press conference to launch the new Vios on Monday, Tanada said that the company has tried to lower the product cost as much as possible, through cooperation with suppliers. He noted that if the baht keeps strengthening, Toyota will need to ask the government to step in.

"The exchange rate of Bt31 per US dollar is favourable, and Bt30 is acceptable, but Bt29 would cause trouble since there would be no benefits or profits," he said in an interview in September 2012.

Toyota has three assembly plants in Thailand with a combined production capacity of 800,000 units. It also has plants in Indonesia (150,000 units/year), Malaysia (70,000 units/year), the Philippines (30,000 units/year) and Vietnam (30,000 units/year). The company will also raise production capability in Thailand to 880,000 units per year - by restoring production at the Thai Auto Works plant and building a second plant at the Gateway Industrial Park.

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Article source: http://www.thethailandlinks.com/2013/03/25/tmt-frets-about-baht-appreciation/