Growing business in China and Malaysia will help offset falling sales of Aapico Hitech Plc in Thailand and enable the SET-listed automotive parts maker to make some profit despite an expected 20-25% sales drop this year.

President and chief executive Yeap Swee Chuan said Aapico's business would decline as overall automobile production decreases by 40% this year with export volume declining substantially.

It had its worst quarterly result in the first three months of this year with a 67-million-baht loss, after a profit of 145 million in the same period of 2008. Revenue dropped 37.4% year-on-year to 1.47 billion baht.

Isuzu, the Ford-Mazda joint venture AutoAlliance Thailand (AAT), and Nissan were the top three customers.

The local vehicle market was down 33.4% in the first quarter to 107,774 units with inventory downsizing continuing in April. The full-year forecast is for sales of 1.1 million units, down from 1.4 million in 2008.

Domestic car sales remained weak but showed signs of stabilising, but exports continue to drop, said Mr Yeap.

On the other hand, Aapico's business is growing in Malaysia and China, where the company supplies forging parts to General Motors small car production.

GM is the top brand in China, selling 400,000 small cars annually. Aapico has ramped up production at its Chinese factory to serve orders from GM.

In Malaysia, Aapico is a dealer for Honda which has enjoyed sales growth. The company sells 150 units of Honda cars per month, out of the total market of 3,000.In the third quarter, Aapico would start manufacturing parts for AAT's one-ton pickup truck, for which business remains on track. It has also been awarded the contract to supply pars for GM's new pickup in Thailand, but currently everything is on hold as GM has filed for bankruptcy in the US.

GM is doing reasonably well in Thailand and the US firm will definitely come back after completing the bankruptcy process, said Mr Yeap.

Saying that most of vehicle markets globally including the US are bottoming out, Mr Yeap anticipates better financial results this quarter, steadily improving in the latter half.

Shares of Aapico (AH) closed yesterday on the SET at 4.60 baht, up two satang, in trade worth 1.68 million baht.