BANGKOK – Thailand’s automotive year begins in earnest with Toyota’s annual news conference held Jan. 22 at Bangkok’s Okura Prestige Hotel.
It’s been a downhill slide for the Thai new-car market since 2012, when the government’s first-time new-car buyer scheme raised the market surge to new heights.
With political turbulence added into the mix sales continued shrinking in 2014, this time by one-third to 881,832 units with cars tumbling 41.4% to 369,839 and faring worse than the commercial sector, which dropped 26.8% to 511,993.
Toyota, which dominates the Thai automotive landscape and provides market data and forecasts considered official, outperformed the overall market to end 2014 with 327,027 deliveries, down 26.6%, but also saw its market share inch up to 37.7%.
The growth came at the expense of Honda, which relinquished its position as Thailand’s top-selling car brand as its 2014 sales retreated 50% year-on-year.
“We achieved No.1 in the passenger car market” in 2014, Toyota Thailand President Kyoichi Tanada says at the news conference. “In 2013 Honda beat us, but only by 3,000 units. Now we're back to normal, restoring normalcy.”
The Toyota result was driven by car sales, which dropped 20.2%, half the rate suffered by the overall market. That was fueled by demand for the new B-segment Vios, C-segment Altis and Yaris eco-car. The Camry continued to enjoy steady demand.
Toyota commercial-vehicle sales underperformed the market, sinking 41.0% from 2013, but the automaker nevertheless retained its lead in the segment.
The automaker predicts the Thai market will shake off its recent struggles and see a modest 4.3% rise in sales in 2015.
“We expect the first half of the year to the middle of the year to be the same (as 2014), but the second half will be better this year,” Tanada tells reporters.
Toyota predicts overall 2015 sales of 920,000 units, including 397,000 cars, up 7.4%, and 522,800 CVs, up just 2.1%. It forecasts a 2.0% uptick to 379,000 units in the key pickup sector. With the inclusion of pickup-derived passenger vehicles such as Toyota’s Fortuner, Chevrolet’s Trailblazer and Isuzu’s MU X, deliveries should climb 1.6% to 427,000.
Near term, Tanada says: “1.2 million (deliveries) is possible to have in 2018 as Eco-Car Phase 2 will come out and customers might come back and buy more than 1.2 million cars. In the future, in cooperation with the government, we can reach 1.5 million.
“The trend is improving,” he continues. “In Bangkok there are two persons for every car (and) upcountry there are 10 persons for every car, so (there is) room to improve. Sales could even reach 1.5 million in the future.”
Next year, Thailand will adopt a new excise duty tax based on carbon-dioxide emissions and meant to bring the country more into line with global patterns. That’s widely expected to raise car prices and should stimulate demand during the closing months of 2015 as buyers take advantage of current prices.
Tanada dismisses the notion that low oil prices will spur demand, saying purchases are based on many factors and the cost of fuel isn’t a big priority.
In terms of exports, Toyota’s were roughly flat in 2014 with 425,730 completely built-up units, but at the news conference the automaker unexpectedly predicts a sharp contraction this year.
“We expect exports of passenger sedans to decrease as the global situation isn’t that well,” says Wichien Emprasertsuk, executive vice president-Toyota Thailand. “We want to increase our export units of the new (Hilux Vigo) pickup and if the pickup can increase (exports) overall, volumes will be the same as last year.”
While Toyota confirms there will be no new investments in Thailand this year, it is gearing up for establishment of the ASEAN trade coalition. The end of cross-border taxes will lead to growth in all 10 member countries, Tanada says, noting Toyota Thailand wants to cement its position as the leading automaker in the Mekong Delta region.
“We don’t have Toyota in Myanmar and Laos so we take these two opportunities to expand, and expand in Vietnam, and we will take care of them from our center here,” he says, adding the automaker also expects expansion in Indonesia.
“Now we are charged 50% (duty) by Vietnam but in the next few years we won't, so the market will expand,” Tanada predicts. “Cambodia will still be very small but we have to prepare for the future.”
