News Room - Business/Economics

Posted on 04 Feb 2008

Economic difficulties could cause car sales to drop in 2008

Concerns about the sub-prime mortgage crisis and possible economic uncertainty may bring down the number of vehicles sold this year, said Pitak Pruetisarikorn, the executive director of Honda Automobile (Thailand) Co.

Honda, the country's second-largest car producer and exporter, shared the same 2008 industry-wide sales forecast as Toyota Motor Thailand Co, the largest local automaker. Both estimated that vehicle sales would increase by 11% from 2007 to 700,000 units this year.

The launch of E20-compatible cars would help boost sales despite the negative factors that are still lingering.

''The auto industry remains concerned about the sub-prime mortgage crisis that may hurt Thai economy and will eventually affect the local auto market,'' Mr Pitak said.

Honda hopes to garner 10% of total vehicle sales estimated this year, or about 70,000 units. The Civic compact sedan will remain Honda's flagship model.

Although higher fuel prices have hurt car sales, Honda is not worried since its car models can all run on E20 gasohol.

Mr Pitak said Honda had no plan this year to expand its dealer network since the existing 140 dealers nationwide can service areas across the country. Still, it plans to strengthen its service quality.

Honda's car assembly plant in Rojana Industrial Estate, Ayutthaya, has a capacity of 120,000 units per year. It will be doubled to 240,000 units in October.

Honda's car exports this year would reach the same level of Honda's local car sales, he said.

Honda has teamed up with government agencies in charge of sports and tourism to organise the Honda Racing Fest, a motor sports event, to reinforce its sporty brand image in Thailand.

President Kenji Otaka said the event was an opportunity for Honda to get closer and bond with its customers, sharing with them its passion for motor sports as part of its customer relationship management strategy.

The Honda Racing Fest will be held five times this year. Two rounds will be staged in two yet-to-be-determined provinces, and the other three rounds would be held at the Bira International Circuit in Pattaya. They are scheduled for April, June, August, October and December.