The Thai new vehicle market slid 9.9% in August to 61,991 units, but there was a glimmer of light with commercial-vehicle sales climbing year-on-year for the first time in 28 months.
However, Toyota Thailand Assistant Senior Managing Director Vudhigorn Suriyachantananont says September likely will see another drop despite the new economic stimulus measures from the military government because of the economic uncertainties at home and overseas.
“Given lingering concerns about global and domestic economic conditions, the domestic market should remain unchanged,” Vudhigorn says in a statement.
Toyota, which collates national sales data for the Thai industry, says August’s drop was driven by a 24% fall in passenger-vehicle sales to 22,790 units, which more than offset a fractional rise in CV deliveries to 39,201. Within the CV category, the important 1-ton pickup segment fell 0.3% to 31,746 units.
The result left the Thai market down 15.1% after eight months at 491,963 units.
Vudhigorn credits the launch of new models for the small rise in CV deliveries, but says sales continue to be impacted by business and household caution on investing and spending amid high household indebtedness, shrinking farm income and stringent loan approval policies.
Toyota paced the August sales race, falling 13.9% to 21,544 units, with Isuzu off 10.8% to 11,057 and Honda down 7.1% to 8,101.
The passenger-vehicle segment saw Toyota slide 33.7% to 7,858 units, ahead of Honda, down 35.8% to 5,388, and Mazda, up 63.5% to 2,472.
Toyota increased its lead in the CV segment with August sales up 3.9% to 13 696 units ahead of Isuzu, down 10.8% to 11,057, and Mitsubishi, off 15.0% at 2,951, all of them 1-ton pickup trucks.
In that 1-ton pickup market, Toyota rose 5.2% to 12,964 units, while Isuzu fell 11.5% to 9,929.
The Federation of Thai Industries automotive industry club says there are so many downsides to the economy in Thailand now, the auto industry believes full-year vehicle sales could drop to as low as 750,000 units.
Club spokesman Surapong Pisitpattanapong says the negative factors include low farm prices, shrinking private investment, stricter approvals for hire-purchase financing and slow budget disbursement by the government.
This view was backed up as the Asian Development Bank lowered its economic growth forecasts for Thailand for 2015 and 2016 to 2.7% and 3.8%, respectively, down from 3.6% and 4.1%.
The federation two months ago cut its full-year forecast to 850,000 units from 950,000, and Surapong says it will release its new forecast next month.
“Under the current unfavorable circumstances, it will be hard for car sales to exceed 70,000 vehicles a month in the remaining months,” Surapong tells the English-language Bangkok Post newspaper.
Thailand vehicle sales reached 1.45 million in 2012 and 1.33 million in 2013, before plunging to 881,832 units in 2014, slowed by political turmoil and low prices for farm products.
The industry is being kept afloat by rising exports, with Thai plants boosting August production 13.3% year-on-year in August to 159,470 vehicles. After eight months, production was up 1.3% at 1.26 million.
The federation says vehicle exports climbed 13.9% year-on-year in August to 101,982 units, with pickup trucks and eco-cars leading the gains.
But Surapong says full-year exports are not expected to top the previously forecast 1.2 million units. Shipments in the first eight months of the year were up 5.3% to 780,414 units.
