Thai Automakers Expect to Break 4-Year Slump in 2017

Toyota Thailand says a fourth straight difficult year saw the Thai market fall 3.9% to 768,788 sales in 2016, but predicts the result will rise 4.1% this year to 800,000.

The automaker’s Thai subsidiary, which collates the country’s monthly auto sales, says commercial-vehicle deliveries fell 2.3% to 488,961 units last year, while car volume dropped 6.5% to 279,827 units.

Within the CV segment, the important 1-ton pickup market fell 0.7% to 394,127 units.

Toyota Thailand President Kyoichi Tanada says it was a tough year for the market despite government measures to stimulate economic growth. These were offset by forward purchasing ahead of an excise-tax restructuring.

The industry also still was recovering from the effects of the 2012 first-time car-buyer scheme that sent sales at subsidized prices soaring, but with a provision the vehicles could not be sold for five years.

The end of that 5-year restriction should help sales show their first year-on-year increase in five years, Tanada says.

This year’s growth forecast sees car sales jumping 12.9% to 316,000 units and CVs falling 1.0% to 484,000 units, including a 3.1% drop in 1-ton pickup deliveries to 382,100 units.

Last year ended with December sales down 14.4% at 86,858 units.

Toyota dropped 1.8% to 28,041 units last month, well ahead of Isuzu, down 22.4% at 15,516, and Honda, off 17.5% at 10,342.

Toyota retained its market dominance in 2016, despite its 12-month deliveries dropping 7.9% to 245,087 units. Isuzu was a distant second, down 0.8% at 143,170 units, followed by Honda, off 4.3% at 107,342.

The car market saw Toyota deliveries tumble 17.2% last year to 87,271 units, ahead of Honda, up 0.2% at 78,132, and Mazda, up 4.2% at 27,375.

The CV market saw Toyota sales slip 1.7% to 157,816 units in 2016, with Isuzu off 0.8% at 143,170 and Ford spiking 23.3% to third place with 39,997 units.

Within that result, Toyota’s 1-ton pickup sales rose 1.7% to 148,494 units, ahead of Isuzu, up 1.8% at 128,864, and Mitsubishi, up 11.4% at 39,176.

Ford led the non-Japanese contingent with full-year sales up 12.4% at 40,972 units, well ahead of Chevrolet, which fell 14.5% to 14,931.

Toyota sees its own sales rising 8.1% to 265,000 units this year. This includes a 26% jump in car sales to 110,000 units and a 1.8% fall in CV deliveries to 155,000, including 147,000 1-ton pickups.

Tanada says the automaker estimates it will export 282,100 completely built-up units.

Mazda Thailand, claiming its 8% growth rate to 42,537 units was the highest among Japanese brands last year, says it aims for an 18% sales increase to 50,000 units with the release of six new models covering all market segments.

Mercedes-Benz, which fell 7.8% to 11,844 units last year, sees better times ahead as it expands its Thonburi assembly plant 37% to 1,991,323 sq.-ft. (185,000 sq.-m) to meet rising demand for its plug-in hybrid vehicles in Thailand.

The plant, which produced its 100,000^th Thai-assembled Mercedes-Benz vehicle in

December, builds four plug-in hybrids – the Mercedes S500e, E350e, C350e and GLE500e.

But Mercedes-Benz and BMW, with sales off 9.6% last year at 7,923 units, likely will face stronger competition in the country’s luxury-car segment with Audi naming a new local distributor. The Volkswagen-owned brand sold just 115 units in Thailand last year.

Meantime, Surapong Paisitpatanapong, a Federation of Thai Industries Automotive Industry Club spokesman, says new investments in the automotive sector are unlikely this year and next, as existing production is enough to serve both domestic and export markets.

Manufacturers are running at 60% to 70% of total production capacity of 2.85 million units a year, he says, adding, “Once their capacity utilization reaches 80%, new investments are likely to be reconsidered.”

The club predicts Thai output will reach 2 million units this year, with 800,000 domestic deliveries augmented by exports of 1.2 million units.