Fiesta’s Thailand Sales Sag After Exclusion From Rebate Program

Ford Thailand’s September sales fell to a 19-month low, dragged down by a 20% drop in Fiesta deliveries following its exclusion from the government’s rebate scheme.

Alan Harman, Correspondent

October 13, 2011

2 Min Read
Fiesta’s Thailand Sales Sag After Exclusion From Rebate Program

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The Thai government’s first-time-buyers tax rebate plan, designed to boost new-vehicle sales, is doing anything but that for Ford Thailand.

The auto maker says more than 600 customers canceled orders for its Thai-built 1.6L Ford Fiesta subcompact after vehicles of more than 1.5L were excluded from the tax scheme launched in mid-September.

Fiesta at center of Thai tax-rebate flap.

The 1.6L model accounts for 70% of Fiesta sales in Thailand.

The Bangkok Post reports Ford revealed the canceled orders after CEO Alan Mulally met with Prime Minister Yingluck Shinawatra in an unsuccessful effort to include the 1.6L Fiesta in the rebate program. The auto maker complained the rule was arbitrary.

“The canceled orders clearly demonstrate an unintended consequence of the first-car policy,” Ford ASEAN (Association of Southeast Asian Nations) President Peter Fleet tells the newspaper.

Ford Thailand says as a result, its September sales fell 13% from August to 2,332 units, the lowest monthly total in 19 months, while Fiesta sales slid 20% to 1,301 units.

The first-car tax-rebate program also excludes imports. Indian auto maker Tata says trade representatives are determining whether it violates the General Agreement on Tariffs and Trade, General Agreement on Trade in Services or the Agreement on Trade-Related Aspects of Intellectual Property Rights.

Nissan, meanwhile, wants the rebate program expanded to include its new Almera eco-car sedans.

President Toru Hasegawa tells the Bangkok Post eco-cars are unfairly treated because the first-car scheme offers a lower excise-tax rate.

A first-time car buyer of a 1.5L subcompact gets a rebate of up to 100,000 baht ($3,230) based on a tax rate of 25%. The rebate for eco-cars is no more than TB80,000 ($2,584) on a tax rate of 17%.

“The scheme satisfies consumers but distorts market competition,” Hasegawa says. “Nissan is cooperating, but we disagree with the practice.”

Nissan argues its eco-cars, which required an enormous investment, are more environmentally friendly than their 1.5L competitors.

Hasegawa says Nissan expects to sell more than 40,000 Almeras in its first year, but believes the figure would be much higher if the rebate was TB100,000 ($3,230).

The eco-car’s tax rebate now is between TB60,000 ($1,938) and TB84,000 ($2,713), depending on the model.

The Almera, powered by a 1.2L, 3-cyl. engine, is available with both 5-speed manual and automatic transmissions. Prices range from TB429,000 ($13,856) to TB599,000 ($19,347). It will be exported to Australia starting next year.

About the Author

Alan Harman

Correspondent, WardsAuto

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