Abstract
Sales of new vehicles in Thailand declined 13.4% y-o-y in June 2009, to 43,402 units, according to data
compiled by Toyota Motor Thailand (TMT). This took new vehicle sales for H109 to 231,428 units, a
fall of 28% y-o-y. Annualised, this would result in a full-year 2009 domestic sales figure of less than
463,000, compared to full-year 2008 new vehicle sales of 615,270. TMT vice-president, Vutigorn
Suriyachantananont, has attributed the decline as much to ongoing political unrest in the country as the
global downturn. Against this backdrop, Suriyachantananont revised TMT's full-year 2009 prediction for
the market as a whole from a y-o-y decline of 7.7% to a plunge of 22%. Sales of commercial vehicles - a
crucial market segment in Thailand - have fared particularly badly, leading TMT to predict a fall of 28%
for this segment for the full calendar year, compared to a predicted fall of 11% for passenger cars. This
would take total new vehicle sales in the domestic market in 2009 down to 480,000.
However, we have left our own 2009 new vehicle sales forecast unchanged, having factored in very poor
H109 figures some time ago. We continue to expect total new vehicle sales to register 506,670 units in
Thailand across 2009, representing a contraction of 18% compared to 2008. We are therefore moderately
less bearish than TMT. We see no reason to alter our own forecast at this stage, given the moderation in
the rate of decline in y-o-y terms demonstrated by the June 2009 sales figure (down a relatively modest
13% y-o-y) and tentative signs of economic recovery. With regard to the latter, a host of indicators
suggest that the economy may at least have passed an inflection point (see Macroeconomic Forecast
Scenario for details). Steep declines in economic output experienced in Thailand in Q408 and Q109,
when real GDP fell 7.1% and 4.2%, respectively are unlikely to be repeated over the coming quarters as
stimulus measures bear fruit, according to our macroeconomic desk.
However, we have revised down our 2009 vehicle production forecast this quarter. We now predict a fall
of 29%, to a volume of 0.93mn CBUs, compared to our earlier forecast of a fall to 1.07mn units. This is
linked to plunging demand for pick-ups in both Thailand and the US. In Q109, total vehicle production in
Thailand fell 45.6%.
However, we do envisage a recovery over our five-year forecast period (up to end-2013) - and that
recovery should begin to gain traction in H209. This is based on our core expectation that global
economic output will recover, meaning higher demand for autos from Thailand's key export markets and
also stronger demand for locally-produced vehicles in Thailand itself.
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