Saturday, July 18, 2009

Thailand's auto market expected to plunge 22% in 2009

Consumer confidence the main problem

Published: 18/07/2009 at 12:00 AM
Newspaper section: Business

The domestic automobile market this year is likely to be far worse than in 2008 because of the global recession and local political instability, says Ninnart Chaithirapinyo, the vice-chairman of Toyota Motor Thailand.

Total sales for 2009 are expected to drop 22% year-on-year to 480,000 units, while 2008 sales slipped only 3% year-on-year to 615,000 units, he said.

"Consumers are panicked about the global economic crisis that originated in the US, and the political situation in Thailand has worsened their confidence," said Mr Ninnart.

Sales in the first half of this year fell 28% year-on-year to 231,428 units, due mainly to the global downturn and the uncertain economic outlook, said Toyota Motor Thailand president Kyoichi Tanada.

He added that the market was expected to remain slow in the second half - although Mr Ninnart forecast a slight recovery, signalled by June's improved sales, which were down less than 13% from the same month last year.

"I think the market has bottomed out now that sales are expected to reach 480,000 units, or may jump to 500,000 units, this year," said Mr Ninnart.

Sales in recent years in Thailand peaked at 730,000 units in 2005, a recovery from a deep slump after the local financial crisis in 1997.

Passenger car sales are expected to be 202,000 units this year, 10.9% down from 2008 - a minimal decline reflecting relatively strong demand in the small-car segment. Commercial vehicle sales are projected to drop by 28.4% to 278,000 units - including 241,000 pickup trucks, down 27.8%.

"Most of the negative growth is in the commercial vehicle market, especially the pickup truck segment," said Mr Tanada.

While the motor industry's earlier forecasts were for 430,000 sales this year, Toyota expects sales to recover to 480,000 as sales improved in June and the market typically picks up in the second half, said Mr Ninnart.

"We are considering which vehicle segment - car or pickup truck - will contribute to the sales growth in the second half, as we are not sure the pickup truck market will improve unless farm product prices become better in the second half," he said.

Toyota has also revised its forecast of its own vehicle sales this year to 205,000 units, a 21.8% year-on-year decline, giving the company a 42.7% market share, said Mr Tanada.

The company expects to sell 90,500 cars for a 44.8% share and 114,500 commercial vehicles for a 41.2% share.

Toyota's vehicle exports in the first half fell 33% to 102,179 units. But the company expects to export 222,000 units over the year.

"The auto industry in Thailand is alive and well but in need of nurturing. On a positive note, the current emotion surrounding the rise in fuel prices should abate and the pickup truck market should rebound as consumer confidence improves," said Mr Tanada.

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