UPDATE 1-Thai Jan domestic car sales tumble 21.3% y/y after virus outbreak

* Association keeps domestic car sales target for now

* Jan car exports up 13.5% y/y

* Industrial confidence at 6-month low in Jan (Adds detail, car exports, industrial sentiment)

BANGKOK, Feb 18 (Reuters) - Domestic car sales in Thailand slumped 21.3% in January to 55,208 vehicles from a year earlier, snapping two months of gains, hurt by a new wave of coronavirus infections late last year, the Federation of Thai Industries (FTI) said on Thursday.

The virus outbreak emerged in the middle of December, when car sales rose for a second month, up 11.3% year-on-year. In 2020, sales dropped 21.4% due to the impact of the pandemic.

Thailand is a regional vehicle production and export base for the world’s top carmakers.

The FTI is, however, sticking to its car sales target of a 5.3% drop to 750,000 vehicles this year, while assessing the impact of the outbreak, Surapong Paisitpattanapong, a spokesman of the FTI’s automotive industry division, told a briefing.

“There were fewer people at showrooms because they were not confident about the virus situation and their jobs,” he said, adding there was also a microchip shortage for car production.

While conceding that January’s drop in domestic sales was “frightening”, exports of cars rose 13.53% from a year earlier to 74,132 cars, said FTI Chairman Supant Mongkolsuthree. “We are lucky to see exports rising again”.

The FTI is forecasting car exports of 750,000 vehicles this year after last year’s 30.19% drop to 735,842 vehicles.

Thailand largely controlled its COVID-19 outbreak by mid-2020 but the new cases have reached most of the country’s provinces and hit domestic activity.

The FTI’s Thai industries sentiment index fell for a second month in January, hitting a six-month low, due to the outbreak while exporters faced higher freight costs and a persistently strong baht, it said.

The group’s index projecting confidence over the next three months also declined. (Reporting by Orathai Sriring and Kitiphong Thaichareon Editing by Ed Davies)