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Visitors Up, Orders Down at Thailand Motor Expo

Organizers had hoped for 50,000 new vehicle orders, unchanged from a year earlier, but the government&rsquo;s National News Bureau reports only 39,125 were booked.

Thailand’s vehicle-leasing and -loan companies are changing their focus to existing customers to maintain business growth next year as orders at the annual Thailand International Motor Expo fall well below the target.

The Nation newspaper says the 12-day expo, held in December every year, is an indicator of the likely growth of the automobile industry and auto lending for the next year.

Organizers had hoped for 50,000 new-vehicle orders, unchanged from a year earlier, but the government’s National News Bureau reports only 39,125 were booked.

Toyota was the top brand with 5,975 units, followed by Honda (4,864), Mazda (4,542), Isuzu (4,348) and Mitsubishi (3,617).

Sedans accounted for 46.2% of orders, SUVs 30.9% and pickup trucks 19.1%. The remaining 3.8% were other types of vehicles.

Visitor numbers rose 6.7% to 1,476,936. But The Nation reports that in line with lower orders, applications for auto loans came in below the targeted level.

With a new excise-duty system based on carbon-dioxide emissions taking effect Jan. 1, the prices of cars with large engines will increase and the sales boost lenders expected from the show never happened despite offers of low-interest loans for some models.

“Consumers might be waiting to see the actual prices of cars with larger engines, but the market doesn’t yet know the new prices of models that will be adjusted in line with the new excise duty,” says Surat Leelataviwat, managing director-Kasikorn Leasing.

Surat tells the newspaper expo results show high debt servicing and lower purchasing power remain the key factors dampening demand and this means Kasikorn Leasing will have to look after existing customers and contact them regularly about marketing campaigns in 2016.

Based on the assumption of domestic auto sales in 2016 coming in unchanged from 2015 at 760,000 units, the association estimates new auto lending will also be similar to this year, at TB330 billion ($9.2 billion), down from TB400 billion ($11.1 billion) in 2014.

There was another sign of Thailand’s automotive woes with news the country has fallen from ninth place to 12th in the world ranking of automobile manufacturers, impacted by the recovery in European production.

Federation of Thai Industries Vice President Surapong Paisitpattanapong tells a news conference at the show Thai production fell 1.6% in the second quarter to 935,251 units, dropping it to 12th place in the rankings.

Surapong says the industry group had lowered its full-year forecast for domestic-vehicle sales to 760,000 units, down from 800,000, after sales in the first 10 months stood at 621,000 units with 124,000 expected to be sold in the last two months of the year.

TAGS: Dealers
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