THAILAND: Vehicle sales plunge in December

By just-auto.com editorial team | 21 January 2008

New vehicle sales in Thailand dropped sharply in December, according to data released by local distributor Tri Petc Isuzu, reversing a tentative recovery that that had begun to take shape in the previous several months.

Overall sales volumes dropped by 24.2% to 64,345 units during the month, compared with 84,891 units a year earlier, with passenger car sales leading the decline.

The sharp fall reflects more than anything rising caution among consumers and businesses ahead of the parliamentary elections held in December. Credit has also been tightened, affecting vehicle financing and reflecting tighter global credit markets. Higher overall prices resulting from record-high oil prices have also had an impact.

The unusually sharp decline in passenger vehicle sales in December also reflects anticipated tax cuts for biofuel-compatible passenger vehicles, and sales could rebound in the coming months.

For the year as a whole, the Thai vehicle market declined by 7.5% to 631,250 units compared with 682,500 units a year earlier. During the 12-month period, passenger car sales dropped by 11.3% and pickup truck sales were 9% lower compared with 2006.

Larger commercial vehicles, including special vehicles, saw strong growth, however, reflecting the continued strong expansion within the construction industry.

Toyota's market share in 2007 reached a record 44.7% with sales of 282,088 units. Isuzu came second with 151,058 sales and a 23.9% market share followed by Honda with 58,517 sales and 9.3%.

Bio-fuels promoted

The high oil prices have prompted the Thai government to promote the use of bio-fuels, as it attempts to limit the country's dependence on imported fossil fuels. Excise duties on bio-compatible cars have been reduced from 30% to 25%, and this has prompted automakers to cut prices.

Ford, one of the first companies to launch bio-compatible models in Thailand, reduced the price of its Focus model by THB50,000 ($US1,622) in response to the tax cuts.

Most popular passenger vehicles to be launched in Thailand this year are expected to be compatible with E20 'gasohol', which contains 20% ethanol, or bio-diesel. The fuels also cost less at the pump than conventional fuels. The Ministry of Energy expects 60,000 E20-compatible passenger vehicles will be sold this year.

Tony Pugliese