It seems some of the major players in the automobile industry, in some of the continents, are having a tough time to retain their existence. After Ford’s exit from the Indonesian and Japanese market now Toyota to follow the league. No, the company has not disclosed any plans to shut down the plant in Thailand, but yes, it is definitely up for cost cutting measures.
Toyota Motor Corp’s Thai unit has launched a voluntary redundancy program aimed at cutting around 800 subcontractors in Thailand due to economic problems in the Southeast Asia and overseas.
According to a statement, the Thailand’s economic slowdown, coupled with uncertainty over the global economy, have affected both the domestic automotive industry and exports since the beginning of the year. These factors have caused a decline in production volume, which has resulted in drop in overtime hours as well as the monthly income offered to employees.
The company has already offered the redundancy package to around 800 subcontractors. Furthermore, due to the closing down of overtime payment many subcontractors may want to find other work and take this compensation package.
Toyota commands about a third of the local auto market and has 18,000 workers in Thailand, 40 per cent of who are subcontractors. It appears that more workers will apply for the scheme according to Phuphal Samata, president, Toyota Thailand Worker’s Union.
It s worth mentioning that Thailand is a regional production and export hub for the world’s top carmakers and the sector accounts for around 10 per cent of the country’s gross domestic product but domestic auto sales have declined almost every month on a yearly basis since May 2013 after the elimination of government car subsidy scheme in 2012.