Thailand 2013 LV Sales Drop Amid Political Turmoil

New-vehicle sales fell 7.4% to 1.33 million units in Thailand in 2013 and are projected to tumble 12.2% to 1.16 million this year.

Toyota Thailand, which compiles industry data, says the escalating political violence in the Southeast Asian country has its parent rethinking investing up to TB20 billion baht ($609 million) in the country, and even cutting production.

Toyota Motor Thailand President Kyoichi Tanada spoke after deadly bombings in the south, increasingly violent anti-government protests in Bangkok and warnings from the U.S. State Department for Americans to avoid protest sites and large gatherings.

A concert by veteran American entertainer Frankie Valli was canceled and the movement of armored personnel carriers into Bangkok – for training purposes, the army says – sparked rumors of a possible military coup.

The government on Tuesday declared a 60-day state of emergency in Bangkok and surrounding provinces, giving police broad powers to detain suspects, impose a curfew and limit gatherings. Authorities say the decree is meant to prevent an escalation of the 2-month-long protests that have immobilized parts of downtown Bangkok.

Tanada says Toyota, the largest automaker in Thailand with nearly 800,000 sales in 2012, plans to increase this by 200,000 units a year over the next three to four years.

But Reuters reports this now is uncertain.

“If the unrest affects economic growth, Toyota may cut its production in Thailand while it assesses the situation,” Tanada says during a news conference reviewing 2013 sales results. “After the shutdown, we (now) have fewer visitors going to our showrooms. We are ready to cut down our car output if we are affected by the political situation.”

The protesters are seeking to shut down Bangkok as a way to remove Prime Minister Yingluck Shinawatra and replace the government with an unelected people’s council. Yingluck already has assumed a caretaker mode and scheduled a general election for Feb. 2, a move the protesters oppose.

Thai automakers ended the year with December sales slumping 21.3% to 113,917 units.

For all of 2013, new-car sales fell 6.1% to 631,221 units and commercial-vehicle deliveries declined 8.4% to 699,447, with the important 1-ton pickup segment down 11.7% to 588,115.

Toyota says the 2013 result topped 1 million units for the third year in a row as a result of rising market demand and the launch of new entries by several automakers.

Tanada predicts the Thai market this year will see car deliveries slip 16.5% to 527,000 units and CV sales drop 10.9% to 623,000, with 1-ton pickups off 11.4% to 521,000.

Toyota’s 2014 sales target for the domestic market is 400,000 units, down 10.2%, with cars slipping 3.2% to 184,000 and CVs retreating 15.4% to 216,000, including 199,000 1-ton pickups, backsliding 15.9% compared with last year.

If the political situation calms down, Tanada says Toyota aims to raise the number of its dealerships to 450 from 390 now. “From our entire business plan, we believe this year Toyota would definitely regain No.1 in all segments,” he says.

That’s a reference to its surprising second-place finish in the car segment, behind Honda, which won the sales crown as deliveries jumped 18.2% to 193,185 units, while Toyota demand dropped 15.4% to 190,101. Nissan was a distant third, down 26.4% from prior-year to 76,131.

Toyota saw CV deliveries fall 12.3% to 255,363 units, but it was comfortably ahead of Isuzu, slipping 3.3% to 206,233, and Mitsubishi, contracting 30.8% to 60,222.

The 1-ton pickup segment saw Toyota on top despite falling 12.2% to 236,751 units, ahead of Isuzu, down 6.0% to 183,079 units, and Mitsubishi, off 30.8% at 60,222 units.

It was Honda’s first time as Thailand’s full-year car-sales leader.

Executive Vice President Pitak Pruittisarikorn attributes the market leadership, on the eve of Honda’s 50th anniversary in Thailand, to its commitment to consistently deliver innovative vehicles that meet customer lifestyles, diverse marketing activities and service enhancement and raising the number of service centers to 200.

“We express our deep gratitude for the confidence and encouragement that all Thai customers and related parties have always given to us, even when we faced the major flooding in late 2011,” he says in a statement. “This enabled Honda to return to strength rapidly and achieve the No.1 position in the 2013 Thai passenger-car market.”

Among non-Japanese automakers, Chevrolet led the market with 2013 deliveries falling 25.3% to 56,389 units, ahead of Ford, down 6.6% to 51,223.

The Federation of Thai Industries’ Automotive Industry Club reports vehicle exports for December showed a 1.9% year-on-year uptick to 87,961 units, leaving the full-year result up 9.9% to 1.13 million.

Club spokesman Surapong Paisitpatanapong tells the Bangkok Post vehicle production rose 9.1% last year to 2.46 million units, making Thailand one of the world’s top 10 auto-producing countries.

But Surapong says the industry’s reliance on exports likely will increase this year because of the political situation.

“The present political turmoil is an indirect negative factor for domestic sales, weakening people's spending sentiment,” he says. “Many car makers have been adjusting their sales plans to serve more exports, driven by increasing demand from global markets.”