Thailand’s Auto-Sales Juggernaut Loses More Steam

New-vehicle sales in Thailand continued to plunge in July, diving 29.2% to 69,527 units and  dropping the once-mighty market down 39.2% year-to-date to 510,438.

Toyota Thailand, which collates data for the industry, released the results the same day army chief and coup leader Prayuth Chan-ocha had himself unanimously elected prime minister by his handpicked National Legislative Assembly.

Senior Vice President Wutthikorn Suriyachantanano sees the automotive market stabilizing in August, noting political stability has improved in tandem with the country’s economic recovery.

He says the launch of new models as well as the 8-day Bangkok auto show running through Aug. 24 are helping grow the car market. However, he notes, the market needs time to adjust to expiration of the government's first-car-buyer stimulus measures.

Toyota data shows new-car sales fell 37.5% in July to 29,677 units, while commercial-vehicle deliveries dropped 21.5% to 39,850, including the 1-ton pickup segment down 20.7% to 32,899.

Suriyachantanano says last month’s sales skid can be attributed to the psychological impact of the political turmoil earlier in the year on consumer spending and the resulting economic slowdown.

Toyota led the overall market in July with deliveries down 26.7% year-over-year to 25,040 units. Isuzu followed, dropping 14.9% to 12,532, ahead of Honda, slipping 46.8% to 8,538.

The sector saw Toyota sales fall 19.7% to 11,258 units, ahead of Honda, tumbling 46.2% to 8,043 and Nissan, slumping 49.8% to 2,271.

Toyota topped the CV segment despite a 31.6% year-on-year decline to 13,782 units, followed by Isuzu, retreating 14.9% to 12,532, and Mitsubishi, rising 12.5% to 3,517. Within the segment, the important 1-ton pickup market saw Toyota drop 29.6% to 12,945 units, Isuzu fall 8.2% to 11,474, and Mitsubishi increase 12.5% to 3,517.

Year-to-date, car sales plummeted 46.6% to 213,397 units, while the CV market backslid 32.4% to 297,041.

At the 7-month mark, Toyota topped the sales table with deliveries down 30.4% compared with year-ago to 189,037 units, followed by Isuzu, down 29.2% to 95,690, and Honda, sinking 62.2% to 55,821.

Toyota was No.1 in car sales despite a 22.6% falloff to 87,698 units, ahead of Honda, slipping 62.2% to 50,065, and Nissan, tumbling 59.6% to 19,420.

Toyota also topped the CV segment, dropping 35.9% to 101,339 vehicles, with second-place Isuzu gaining some ground with a 29.2% decline to 95,690. Despite July’s gains, Mitsubishi deliveries fell 41.4% from like-2013 to 21,435.

The year-to-date 1-ton pickup segment saw Toyota drop 34.8% to 95,537 units, Isuzu slip 26.0% to 88,711 and Mitsubishi contract 41.5% to 21,435.

Ford again set the pace among non-Japanese manufacturers, with July sales slowing 18.3% to 3,046 units for a 7-month total off 25.6% to 23,168.

Chevrolet followed, slumping 51.5% in July to 2,029 units, leaving its year-to-date total down 51.1% to 16,463.

On the production front, the Bangkok Post newspaper reports automakers are ramping up builds for export in the second half to counter declining local sales and achieve their target of 1.2 million vehicles shipped this year.

Federation of Thai Industries automotive industry club spokesman Surapong Paisitpatanapong tells the newspaper output is expected to approach 180,000 units a month during the fourth quarter.

The club says July production fell by 24.9% year-on-year to 151,339 units, with the 7-month total dropping 28.5% to 1.1 million.

Export production in July rose 10.2% from year-ago to 94,616 units to push the 7-month result up 4.5% to 654,542.

Surapong says despite pressure from a strengthening baht, the club’s full-year export target of 1.2 million units is expected to be met thanks to strong demand for pickup trucks.

Elsewhere, the Bangkok Post reports a seminar hosted by the Thai Automotive Journalists Assn. hears Indonesia is challenging Thailand’s standing as the biggest automotive market in Southeast Asia.

ASEAN Automotive Federation data shows Thailand last year produced 2.46 million units to Indonesia’s 1.2 million.

“Indonesia is expected to become Thailand’s archrival once the ASEAN Economic Community is integrated in late 2015,” FTI automotive industry club Chairman Ong-arj Pongkijworasin tells the seminar. “Indonesia's government has a road map to produce 4.18 million vehicles by 2025.”

Thailand sold 1.33 million units last year, down 7%, while Indonesian sales rose 10% to 1.22 million.

“Indonesia has been trying to develop its vehicles in a similar way to Thailand, be they eco-cars, which are called low-cost green cars, multipurpose vehicles, sport utility vehicles, small sedans, trucks or hybrid vehicles,” Ong-arj says.

He says Indonesia is expected to manufacture 1.6 million units by 2015 and 2.6 million by 2016.

However, Indonesia has cut its production forecast this year to 1.3 million vehicles from 1.4 million due to slowing demand in the country.

“The automotive industry of Indonesia has had a compound average annual growth rate of 15% since 2010, while Thailand has had only 10%,” Ong-arj says.

Thailand has 18 automakers with maximum combined production capacity of 2.85 million units.