News Room - Business/Economics

Posted on 18 Jan 2008

Thailand automakers expect rebound

Overall sales expected to grow 11% in 2008

The local automobile market is expected to recover this year after two years of declines. ''We believe the elected government will help restore economic and political stability that will help boost consumer confidence and spending this year,'' said Toyota Motor Thailand Co president Mitsuhiro Sonoda.

Overall vehicle sales in 2008 are projected to grow 11% to 700,000 units, of which 217,000 units would be cars and the remaining 483,000 would be commercial vehicles including the best-selling one-ton pickup trucks.

Mr Sonoda praised the government's efforts to promote fuel-efficient cars by cutting E20 fuel taxes. ''But world oil prices, which recently climbed to more than US$100 per barrel, will affect the market,'' he said.

The 1997 financial crisis caused local sales to plunge to 144,065 vehicles, a record low, in 1998. The market then picked up gradually every year and peaked in 2005 at 703,432 units.

However, the market fell in 2006 by 3% to 682,161 units as consumers were reluctant to buy new vehicles after the military coup that toppled the Thaksin administration.

Vehicle sales last year fell 7.5% from 2006 to 631,251 units. There was an 11.3% drop in the car market to 170,117 units and a 6% fall in the commercial vehicle segment to 461,133 units including 9.8% in the one-ton pickup truck market to 405,865 units.

''Although 2007 was a difficult year for the automobile industry, sales volume compared quarter by quarter, showed signs of improvement,'' Mr Sonoda pointed out.

In the first quarter, he said, auto sales dropped by 19.7% year-on-year but in the second quarter the decline became smaller, at 6.4%. In the third quarter, growth of 3.3% was visible for the first time of the year, followed by more growth in fourth quarter.

Mr Sonoda added that the past year was successful for Toyota. The company was able to finish the year with a 44.7% market share and sales of 282,088 units _ slightly lower that the year before.

Toyota also finished the year as the top brand in the local automobile market in both the car and commercial vehicle segment, especially in the one-ton pickup truck market where it secured a top position for the second consecutive year with sales of 158,348 units for the Hilux Vigo commanding a 41.4% market share.

Mr Sonoda said Toyota's sales target for 2008 was 310,000 units, up 9.9% from 2007, with a market-share target of more than 44%.

Toyota also led in auto exports, with a value of 99.56 billion baht for 237,774 fully built vehicles last year. Toyota also exported 28,216 containers of assembly kits worth 39.18 billion baht and 2.29 billion baht worth of assembly tools, equipment and parts. It exported 141.02 billion baht worth of automobile products last year, up 17.5% from 120.05 billion in 2006 despite the strong baht.