Abstract
The Thai government has rejected a request from the Federation of Thai
Industries (FTI) to cut excise
tax on new vehicle purchases. This will
keep the industry on track for further market contraction,
according to
BMI' s latest Thailand Automotives Report. The signs so far are not good, as
total vehicle
sales for January and February fell by 30% (to 32,085 units)
and 30.7% year-on-year (y-o-y),
respectively. The market has now
registered nine consecutive months of negative growth. Production has
also
slumped as exports slow. In the latter month, total production fell by 53%,
led by a 50% drop in
passenger car output and a 49.6% decline in pick-up
truck production.
On the positive side, the downturn has attracted
low-cost carmakers such as Chery Automobile. The
Chinese carmaker is still
discussing domestic assembly with its Thai authorised importer and
distributor,
Thai Chery Yarnyon, a partnership with Thai Yarnyon. The
automaker intends to import around 4,000-
5,000 vehicles to the region in
2009. In other good news, General Motors (GM) will commence with the
construction of its diesel engine plant after securing funding guarantees from
local banks. The project had
been postponed as a result of the financial
crisis
Despite a lack of demand from the US, hub status has certainly
benefited Thailand in BMI' s Business
Environment Ratings, which ranks the
country in sixth place on a score of 56.3 (out of a possible 100). A
number of new export-oriented investment projects have raised the country' s
production growth potential
for the next five years, while several
existing free trade agreements increase the reach of investors.
Government
incentives for manufacturers producing low-emission vehicles have boosted
Thailand' s
regulatory environment score, as has its good labour relations
and trade relationships.
In the first two months of 2009, the competitive
landscape changed very little, although every one of the
top 10
manufacturers posted negative sales growth. Toyota Motor continued its
dominance with a 41.6%
market share, followed by Isuzu with 22% and Honda
with 16.7%. Up next was Nissan Motor with
4.85%. The biggest drop in sales
came from GM brand Chevrolet, with a 59.2% fall. Japan' s Mitsubishi
Motor
was close behind with a 51% contraction.
Despite their strong hold on the
market, Toyota Motor and Isuzu Motors saw their sales fall by 28.12%
and
30.34%, respectively. Both are leading players in the declining pick-up truck
segment.
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