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Published on July 18, 2007

The Thai auto market has seen better times, and there is still no clear end in sight to the current economic slow-down. To boost their sales and ensure that profits do not fall too low, auto-makers are beginning to try new methods of generating income.

Ford Thailand, for instance, hosted Ford Mega-Exciting Day from July 6-8, during which it sold off many of its demonstration cars used by dealerships as test-drive vehicles for customers.

"When the market is up, companies generally focus on selling new cars, but things have slowed a bit this year," says Saroj Katfuengfoo, vice president for sales and marketing. "Our Mega-Exciting Day allowed customers to buy cars at prices almost 15-per-cent less than showroom prices, and they'd barely been used for three months. We have an internal policy that all test-drive vehicles must be well serviced and changed out within three months."

Ford also used the occasion to launch a limited edition of its Ranger pickup called the Wildtrak. Features of the special version include strato-blue paintwork, roof rails, a sports bar, box rails, a Wildtrak sticker and scuff plate. The Wildtrak sells for Bt917,000 and is limited to 100 units. It was launched in Europe two weeks before its Thai launch, which was timed to coincide with Ford Thailand's 11th anniversary.

"Previously, SUVs were the 'in thing', and there are many who still follow this tradition. But we believe there are people who want a sort of sports truck with a new sporty image.

The Wildtrak will suit these people, who want comfort and yet the rugged appeal of a truck, and many more have homes upcountry they visit on weekends. All accessories added to the Wildtrak have been tested for safety," Saroj says.

After measuring the customer response to the Wildtrak, Ford will consider more special editions, he says.

At its Mega-Exciting Day, which was held at Robinson Ratchada Ford, the company sold 108 vehicles: 42 demonstration units and the rest new models.

Another of Ford's strategies is an offer to existing Ford-owners to turn in their old cars as partial payment for new ones. Saroj says that as automotive technology improves, vehicles can remain in good condition after five or six years of use, and customers are unwilling to part with them without an incentive. The company claims the idea also boosts customer faith in the second-hand value of Ford vehicles.

Current sales incentives include low interest rates and even a no-down-payment scheme, which means the customer must instead pay instalments for seven years.

"All of these incentives and promotions will exist only for a short time," Saroj says. "The market was overestimated last year, and auto companies have an imbalance in stock, so they're focusing on low-margin strategies that will quickly dispose of stock. Customers should take advantage of this if they're considering buying a car."

First-half auto sales in Thailand dropped 14 per cent year on year, and Saroj says apart from the loss of consumer confidence in the economy, two main problems have contributed to the poor performance.

First, finance companies have become stricter in choosing their customers. This is mainly a result of losses suffered because of relaxed policies last year, which saw many finance companies repossessing vehicles from customers.

Second, customers are now willing to hold on to older cars that are performing well, because auto companies have not been offering them incentives like Ford's buy-back policy. The only choice for customers has been to sell their vehicles to second-hand car tents.

"The third quarter is likely to look the same way as the past two," Saroj says. "But, as consumer confidence increases, the fourth quarter is likely to see better sales, and the Bangkok Motor Expo will have auto companies introducing many more promotions."

It is expected that 600,000 new vehicles will be sold in Thailand this year, down 11.76 per cent from last year's 680,000 units.

Vijo Varghese

The Nation

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