Asian economic upheaval worries U.S. automakers

Asian economic upheaval worries U.S. automakers

CHIBA, Japan (AFP): US auto makers said yesterday the currency crisis in Asia had a serious impact on the auto market and they hoped for an early resolution to the region's economic problems.

Ford Motor Co. vice president Jack Telmack told reporters at the biennial Tokyo Motor Show here that the economic situation in Asia was "extremely difficult for everyone."

"It certainly has had some serious impact on the automobile market," Telmack said, adding: "We can only hope that all of these issues get settled in the very near term, so we can all get back in developing and selling all kinds of products."

Telmack said that Ford was "able to cope with it at the moment" and had no plans to alter its strategy in the "extremely important" Asian market.

Southeast Asian currencies have been sharply devalued against the dollar following a decision to float the Thai baht on July 2. Malaysia's ringgit, the Indonesia rupiah and the Philippine peso have all come under attack.

The South Korean won and the Taiwan dollar have also slid as the region's currencies realign.

Analysts expect the region to suffer an economic slowdown as domestic demand contracts as a consequence of structural adjustments.

In Thailand alone, car sales fell by a massive 76.6 percent in September year-on-year while total auto sales for the first nine months of the year declined 26.4 percent, reports said earlier this month.

Asia accounts for some 32 percent of global auto output.

Chrysler Corp. vice president Francois Castaing said that while the crisis in Southeast Asia was fueled by debt, "they are planning a turnaround."

But in the long run there was international agreement that a major automobile market would emerge, "from Indonesia to Malaysia, China, the Philippines, Thailand and Vietnam."

"What they are facing right now is not a crisis such as happened in Mexico, " Castaing said.

The Chrysler executive said that auto makers were also watching developments in China, where conditions were "flat."

"Everybody there, not only us, is waiting to see what policy for the automobile industry will finally emerge as China attempts to become as a free market-type economy by accepting one of these days WTO (conditions)," Castaing said, referring to its future accession to the World Trade Organization.

Castaing said that, taking a "10-year outlook, I think most of these countries will become free market type countries." "We will recover from the currency crisis," he said.