Canadian Manufacturing

Toyota cuts 800 workers from three Thailand factories

Auto production declined 23.5 per cent in 2015 and an incentive program resulted in 100,000 indebted customers who couldn't pay for their new vehicles


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BANGKOK—Japanese car maker Toyota said July 6 it is letting go of at least 800 workers at its factories in Thailand under a voluntary departure program, a reflection of deepening troubles in the Thai automotive industry.

Toyota Motor Thailand said in a statement that it aims to reduce by up to 900 its staff strength of 16,477 at three manufacturing facilities due to declining sales.

It said about 800 contract staff have already accepted a termination agreement under which they will receive a 16-day bonus and one month’s salary. Workers have until July 13 to take up the offer.

The company also has promised to re-employ all workers if the market improves in the next year.

Toyota reported a 13.4 per cent drop in sales for the first five months of this year compared to the same period last year.

Toyota’s three plants are in Samut Prakan and Chachoengsao, just outside Bangkok. The Samut Prakan factory produces pickup trucks and other commercial vehicles while the two plants in Chachoengsao make passenger cars. Together they have a maximum capacity of 760,000 vehicles a year.

The company enjoyed a 22 per cent production increase in 2012 when then Prime Minister Yingluck Shinawatra rolled out an incentive scheme to encourage first-time car buyers. But it resulted in more than 100,000 indebted customers who couldn’t pay for their new vehicles after taking loans from banks.

Thailand’s automobile industry saw a mere 1.1 per cent increase in production the year after the program’s debut, and a 23.5 per cent decrease in production in 2015, according to worldwide data compiled by the International Organization of Motor Vehicle Manufacturers.


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