GS Battery increases production

       GS Battery is raising its output to keep pace with the rapid growth of the replacement market amid signs the new auto market is also recovering.
       "Sales of GS batteries in the after market performed better than expected,with growth surpassing 50% year-onyear in the first eight months this year,"said Saran Chinprahat, managing director of Siam GS Sales Co, the distribution arm of GS Battery Group.
       The planned output increase is destined for the replacement market. Most existing production will be supplied to new vehicles. Output will be raised by 50,000 batteries per month for total production of 4.2 million units per year.
       The output increase will cost about 75 million baht in investment and plant expansion will start in November so new output can roll out early next year.
       GS supplies batteries to every vehicle maker except Honda. Mitsubishi and Chevrolet exclusively use GS batteries while others order equal amounts from three producers to balance supply.
       Sales of GS batteries reached 2.3 billion baht in the first eight months this year and could reach the target of 3.3 billion baht for the full year, 10.7% up from 2.98 billion in 2008, which would allow it to stay market leader. The battery market is valued at 6 billion baht.
       Mr Saran said the cost of battery production this year soared due to lead, the main raw material. Lead traded on the London Metals Exchange more than doubled to US$2,300 per tonne from $1,100 per tonne last year.
       If production costs keep growing, GS expects to raise retail prices in the fourth quarter. For the time being, Mr Saran said GS will absorb rising costs to help relieve consumers' economic hardships.
       Both GS Battery Sales and Siam GS Battery are part of Siam Motor Group,the country's major auto parts manufacturer and also the dealer of Nissan and Honda automobiles.