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NEW UPDATES Asean Affairss  7 January 2015  

Thailand's auto sector is expecting recovery

THE Thai auto industry may have suffered a terrible year, with domestic sales plummeting by almost 40 per cent during the first 10 months, but many believe the worst has passed and that 2015 will be a year of recovery.

In terms of exports, the impact was less damaging as shipments of completely built-up (CBU) vehicles dropped by a mere 1.25 per cent in the January-to-October period, according to figures from the Thailand Automotive Institute.

While total auto production fell by 25.8 per cent to 1.56 million units and domestic sales plunged by 36 per cent to almost 720,000 units, CBU exports maintained their popularity in the global market, reaching 932,365 units during the first 10 months of last year.

Auto companies believe 2014 could end with domestic auto sales finishing below 900,000 units, despite the introduction of many popular models as well as attractive sales campaigns offered throughout the year.

While passenger-car sales enjoyed tremendous growth during 2012 thanks to the first-car-buyer programme, which offered excise rebates of up to 100,000 baht per vehicle, the populist scheme introduced by the elected Yingluck Shinawatra government was also blamed for creating artificial demand.

A record 1.436 million vehicles were sold in Thailand that year, and many warned that future demand could be badly affected as buyers rushed to place orders because of the discount.

Apart from the first-car scheme, demand for vehicles had also been piling up because of the 2011 flooding, which caused most auto factories to cease production temporarily, while automakers had also been raising production capacity and investing in more parts production.

In 2013, auto sales dropped slightly by 7.4 per cent to 1.33 million vehicles, despite political protests in Bangkok towards the year-end period aimed at ousting the elected Yingluck government.

The big blow for the industry came early last year as the protests escalated, leading to a coup staged by the military.

While consumers held back purchases because of the political uncertainty, finance companies also raised the bar for approving auto loans, because of the high rate of bad loans blamed on the first-car tax-break scheme.

“Although there may be demand, many of the potential buyers are not being approved for auto loans because finance companies are becoming stricter in their approval process,” said Wallop Treererkngam, general manager for marketing at Suzuki Motor (Thailand).

During the first half of last year, auto sales declined by more than 40 per cent, and it was only in October that the drop was narrowed to 20 per cent thanks to increased consumer confidence.--The Nation/ ANN

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This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More






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