BANGKOK - VEHICLE production in Thailand could fall as much as 35 per cent next year if the global economy continues to worsen, a leading auto institute said on Saturday.

Thailand is a major production and export hub for pickup trucks made by General Motors Corp., Toyota Motor Corp., Isuzu Motors Ltd. and Mitsubishi Motors Corp. - all suffering in the midst of a global downturn.

Mr Wallop Tiasiri, director of the Thailand Automotive Institute, estimated the decline in Thailand would more likely be about 15 per cent. But he said a gloomier economic outlook in the United States and Europe could result in a production drop of 35 per cent and the loss of 45,000 jobs.

'If the economic situation in major markets, especially in the United States and Europe, deteriorates much further, our production could go down by 35 per cent or to 900,000 units,' he said.

'However, I think this worst case scenario will not be realised.'

Vehicle production in Thailand hit 1.4 million units this year, up from 1.29 million units a year ago, Mr Wallop said. The sector employs 300,000 people, about a third of them who are subcontracted.

Most analysts have predicted the automotive sector in Thailand would eventually be hit as vehicle manufacturers worldwide are cutting production amid the global financial downturn.

Last month, General Motors said it would stop production at its Thai plant for up to two months. General Motors and Chrysler LLC earlier this month were granted US$17.4 billion (S$25.2 billion) in federal loans so they can stay afloat.

'Currently the Thai auto industry is still relatively strong.

Every company still has their cash inflow,' Mr Wallop said. 'However, we have to admit the slump of the global markets will hit local companies.' -- AP