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Domestic car production will likely increase by nearly 10.85% to 1.43 million units this year from 1.29 million units last year on the back of better consumer confidence and strong export growth.
The output for export will rise by 11.78% to 770,283 units this year, or 54% of total production, roughly the same proportion as last year, said Surapong Paisitpatnapong, a spokesman for the automotive industry club of the Federation of Thai Industries (FTI).
The higher export production is the result of long-term production plans by global carmakers such as Toyota and Nissan.
''Unlike last year, the export volume is expected to rise since the beginning, not because of the sluggish domestic market, which has improved significantly since the election,'' said Mr Surapong.
Output for domestic sales this year would be 656,771 units, an increase of 9.78% from last year. Total domestic sales are expected to be around 680,000 units, slightly higher than the output, to be met by leftover stocks from last year, when buyers delayed their decisions in order to enjoy cheaper E20 car prices.
The government has reduced excise taxes to 25% from the normal 30% rate for cars that use E20, a mixture of 20% ethanol and 80% gasoline, effective early 2008.
Carmakers launching new E20 models this year include Honda, Ford, Mazda, Mitsubishi Lancer, Nissan and Toyota, as well as Volvo.
Mr Surapong said motorcycle production would rebound to post 19.6% growth to 1.97 million units in 2008, after falling 20.65% to 1.64 million units in 2007 as a result of the stagnant economy.
Motorcycle exports this year would triple from last year's figure to 335,523 units, thanks largely to Suzuki's expansion plan to export 200,000 units to Asian markets.
Although confidence seems to have improved in the automobile sector, overall industrial confidence fell to 79.8 points in December from 82.3 points in November, mainly due to a drop in overseas orders, said Adisak Rohitasune, a vice-chairman of the FTI.
Confidence in the outlook over the next three months, however, rose to 98.1 points, buoyed by an anticipated improvement in the economy, driven by government spending on megaprojects.
Santi Vilassakdanont, the FTI chairman, said the industrial growth rate this year would improve to 8% from 7.4% last year, as many industries were running at over 70% of their capacities and needed to expand.
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