New vehicle sales in Thailand fell by 12.1% to 60,863 units in July, compared with 69,267 units in the same month of last year, according to data released by the Federation of Thai Industries.
Cumulative seven month sales fell by 16% to 429,972 units, compared with already depressed year earlier sales of 510,178 units – which were down by over 39% on January-July 2013 volumes.
Thai consumers remain under pressure from high debt, which rose sharply during the first-time car buyer programme period which ended in December 2012. The Thai economy also has not rebounded strongly from last year’s near recession, reflecting declining exports and low domestic confidence.
The FTI is calling for a revision to the terms of first time buyer contracts which requires buyers to keep their vehicles for at least five years or face paying back the 10% government incentive.
It wants the minimum ownership period to be cut to three years which would allow most first time buyers to replace their vehicles from this year. When the minimum ownership term ends, the market is likely to get a significant lift.
The FTI also revealed that buoyant exports helped lift vehicle production by 9.6% year on year to 165,863 vehicles in July, with strong demand for eco-cars and for new pickup trucks from Toyota and Mitsubishi.