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The "Detroit of the East" Recovering Strongly

CNBC.com
Thursday, 23 Sep 2010 | 3:45 AM ET

Thailand's automobile industry is making a strong comeback following the global financial crisis, supported by robust recovery in demand.

Insight into Detroit of the East
Automakers will continue to keep their production plants in Thailand in spite of the baht's strength, believes John Bonnell, director at Dunne & Company. He sheds light on this industry, with CNBC's Martin Soong & Karen Tso.

"The exports are up dramatically... local demand is strong. So that's both feeding into the production inside of the auto equation," John Bonnell, director at Dunne & Company, told CNBC on Thursday.

The country's vehicle exports to Asia jumped by 137 percent in July year-on-year, making the region the largest export market for the country.

Thailand is also the second largest pick-up truck market after the U.S., and been dubbed as the "Detroit of South East Asia".

Bonnell downplayed the effects of the strengthening baht, which could affect the the competitiveness of exports.

"(The) strong baht is going to affect things perhaps if it continues to get strong but I think all factors are in place for production to continue from Thailand," he said.

While most developed nations are making a big push into green cars, Bonnell doesn't see that happening for Thailand in the near term.

"I think green cars not yet in the production picture for Thailand. I know there are policy makers are working on maybe finding some sort of promotion for that side of the industry. It's not there yet."