Thailand Business News
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After a brief slowdown earlier this year, Thailand’s automotive industry is back near top speed, resuming progress toward the goal of becoming the world’s 10th biggest automaker. Rising steadily by one notch in 2009 and by another in 2010, Thailand currently ranks as the 12th largest auto manufacturing country.
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Thailand’s auto industry to reach top 10 by 2015
For 2009 as a whole, nonetheless, real GDP fell 2.3 percent despite a pick-up in consumption in the fourth quarter, external demand will be the main contributor to growth in the near term.
Government consumption will likely contract due to the phase-out of consumption measures of the first fiscal stimulus package. Investment is expected to recover, as capacity utilization rises and deferred maintenance, machine replacements and limited expansion of existing plants take place. In addition, there are indications that construction investment, long subdued, may be picking up.
In any case, Thailand’s strong rally in 2009 should still be considered in context.
The 2009 market rally reflects the perception that valuations are about long-term potential, and that political crises in Thailand rarely have a dramatic impact on the fundamentals of the economy. If we look at the EV/EBITDA multiples of the oil and gas sector, for example, valuations are still low compared to regional peers : this is partly a reflection of regulatory risks and political instability in Thailand.
