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Toyota flashes Thai warning

Bangkok, Jan. 20 (Reuters): Toyota Motor Corp may reconsider investing up to 20 billion baht ($609 million) in Thailand, and could even cut production, if political unrest drags on, the head of the Japanese automaker’s local unit said today.

Toyota is the largest car manufacturer in Thailand, producing 800,000 vehicles a year. Plans to increase its annual capacity by 200,000 vehicles a year over the next three to four years are now uncertain, Kyoichi Tanada, president of Toyota’s Thai unit, told a news conference.

“Our new investment in Thailand may not happen if the current political crisis goes on longer. For new foreign investors, the political situation may force them to look for opportunity elsewhere. For those that have already invested, like Toyota, we will not go away. But whether we will invest (further) or not, we are unsure,” Tanada said.

The warning came as Thai authorities said they were “very seriously” considering a state of emergency after a weekend of violence in the capital where protesters have been trying for more than two months to bring down the government.

The violence is the latest episode in an eight-year conflict that pits Bangkok’s middle class and royalist establishment against poorer, mainly rural supporters of Prime Minister Yingluck Shinawatra and her brother, ex-premier Thaksin Shinawatra, who was toppled by the military in 2006.

“We’re prepared to use the emergency decree. Everyone involved including the police, the military and the government is considering this option very seriously, but has not yet come to an agreement,” national security council chief Paradorn Pattantabutr told Reuters after meeting Yingluck.

Thailand is the biggest auto market in Southeast Asia and a regional vehicle production and export base for the world’s top car manufacturers like Honda Motor Co and Ford Motor Co .

Protesters have been trying for more than two months to bring down Thailand’s government, forcing ministries to close and Prime Minister Yingluck Shinawatra to shift her workplace as part of an attempted “shutdown” of the capital.

If the unrest affects economic growth, Toyota may cut its production in Thailand while it assesses the situation, Tanada said.

“After the shutdown, we have fewer visitors going to our showrooms. We are ready to cut down our car output if we are affected by the political situation,” he added.

Toyota produced around 850,000 cars in Thailand in 2013, selling 445,000 domestically and exporting some 430,000 vehicles. This year, it aims to sell 400,000 cars domestically and export 445,000, Tanada said. Overall auto industry sales in Thailand are expected to fall 13.6 per cent to 1.15 million vehicles in 2014, mainly because of weaker consumption.

 
 
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