October Sales Sink in Flood-Stricken Thailand
Executive Summary
Honda dealers reportedly are concerned about losing their businesses because the auto maker’s Ayutthaya manufacturing facility remains submerged with no clear date for resuming operations.
October light-vehicle sales in flood-ravaged Thailand sank 40.5% year-over-year to 42,873 units.
Toyota Thailand, which tabulates sales for the local industry, reports new-car sales tumbled 38.8% to 19,852 units and light-commercial-vehicle deliveries plummeted 41.8% to 23,021.
Within the CV segment, 1-ton pickup sales plunged 44.3% to 18,861 units.
Toyota Thailand Executive Vice President Wutthikorn Suriyachantanano says October’s decline was the biggest in the 13 years since the Asian financial crisis.
He says the flooding didn’t hit all vehicle-assembly plants, but many had to halt production because of parts shortages.
Toyota stopped assemblies Oct. 10 because of a lack of parts and now is aiming to resume some production on Nov. 21.
Despite the steep drop in October, industry year-to-date sales rose 13.6% to 713,842 units.
Wutthikorn says consumers’ purchasing power remains strong, and Thailand can expect growth in investment and consumption.
Still, he says November car sales will be down again because of the flooding. However, he expects auto makers will resume production this month.
“This is a good sign for the overall economic picture of the country,” Wutthikorn says in a statement.
The Federation of Thai Industries says the auto industry expects to produce 1.74 million vehicles this year, missing its production target of 1.8 million.
Federation automobile industry club spokesman Surapong Phaisitpattanapong tells the Bangkok Post that 1.28 million vehicles were built through September and the industry estimates 456,141 units will be manufactured in the last quarter.
Exports are expected to fall 100,000 units short of the initial forecast of 1 million. But the federation says they could total only 700,000 vehicles if parts supplies are not replenished.
Ironically, exports in September hit a record 90,654 units, showing the industry had fully recovered from supply problems stemming from the March 11 earthquake and tsunami in Japan. Thailand’s heavy rains began in July and flooding intensified in early October.
The federation is calling on the Thai government to temporarily allow duty-free imports of cars to help flood-stricken auto makers meet demand.
The newspaper says the cabinet already has approved in principle temporary exemptions from import tariffs on auto parts, machinery, raw materials and completely built-up cars.
The finance ministry is finalizing details of the tax waivers and how long they will last.
Federation Chairman Phayungsak Chartsutthiphol says duty-free imports should be limited in volume for some vehicles, as domestic auto makers would oppose across-the-board duty waivers.
Toyota led October light-vehicle sales with 15,601 units, down 36.4% from like-2010. Honda followed, down 46.6% to 5,274, ahead of Isuzu, down 63.1% to 5,261.
In the passenger-car segment, Toyota deliveries dropped 50.4% to 7,007 units, ahead of Honda, off 47.3% to 4,902, and Mazda, up 23.2% to 2,516.
Toyota led the 1-ton pickup market with 7,344 deliveries, although that was a 46.3% decline. Second was Isuzu, down 64.0% to 4,727, and Mitsubishi, up 28.3% to 3,439.
Despite the October flood disaster, Toyota sales remain up 6.3% year-to-date to 271,218 units for a 38.0% market share. Isuzu follows, up 1.2% at 121,361 and leading Honda, down 14.5% to 78,592.
Toyota’s 10-month new-car sales increased 16.1% to 129,038 units, ahead of Honda, down 13.3% to 73,139, and Nissan, up 62.3% to 38,900.
Commercial-vehicle deliveries through October rose 10.6% to 391,970 units. Toyota ranked first, slipping 1.3% to 142,180; followed by Isuzu, inching up 1.2% to 121,361; and Mitsubishi, jumping 113.7% to 50,093.
Within the LCV segment, Toyota held the 1-ton pickup sales lead after 10 months with 127,810 units, down 0.5% from year-ago. Isuzu followed, down 0.4% to 110,856; and Mitsubishi was third, as deliveries surged 113.7% to 50,092.
Honda dealers across Thailand reportedly are concerned about losing their businesses because the auto maker’s Ayutthaya manufacturing facility remains submerged with no clear date for resuming operations.
“It is still unknown when the plant will resume production, as we need both the floodwater to recede and parts factories to recover,” an unnamed Honda Thailand senior executive tells the Bangkok Post.
Honda is Thailand second-largest passenger-car manufacturer.
An unnamed industry source predicts the Honda plant, with production capacity of 240,000 units a year, will not come back on line until May if the floodwaters do not recede this month.
The auto maker expects its dealer inventories to be exhausted in a month, stranding retailers without cars for up to five months.
Honda is trying to help its dealers by seeking the government waiver of duties on imported foreign-built vehicles, but the newspaper reports rival auto makers argue no one company should receive special privileges.
