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Published on December 20, 2007

After a troubled and unstable year, Thailand's auto companies are accounting for an annual performance that, for many, has not been as bad as feared. Most have recorded a drop in sales, although a few are claiming increased sales.

"We expect the situation to get better next year, after the election," said Honda Automobile Thailand's general manager Pitak Pruittisarikorn. "This year there were many problems, although the market has not been as hard-hit as expected. The drop in total sales, year on year, might not reach the 10-per-cent figure that was forecast in the middle of the year. The total market is expected to reach 630,000 units, and Honda expects a 10-per-cent market share, which means we sold about 63,000 units."

The first half of 2007 saw a 12.6-per-cent drop in sales. However, the sentiment has been more positive in the second half.

Pitak said the total market was expected to reach 700,000 units next year, although it depended largely on the state of the country's politics. Honda hopes to hold onto its 10-per-cent share.

"The 5-per-cent decrease in excise duty for vehicles that are E20-capable [able to use gasohol with 20-per-cent ethanol] will help boost sales of passenger cars. All Honda models are now E20-capable, except for the Jazz. The decrease in duty will bring a price difference of between Bt30,000 and Bt110,000, depending on the model. Many other makes have already launched E20-capable vehicles and some are likely to launch them next year, which will create more interest in this segment," Pitak said.

The latest vehicle to join Honda's product offensive in Thailand is the new Accord, which is capable of running on E20 fuel. The Accord comes with 2-, 2.4- and 3.5-litre engine options. In the past two months, since the Accord has been open for purchase bookings, more than 1,500 orders have been placed, and more than half of them are for 2.4-litre version.

"With the high number of bookings, we might have a delay in providing vehicles to our customers," Pitak said.

Honda's current plans are to produce more than 28,000 Accords in Thailand, although only 10,000 of them will be for domestic sales. The rest will be exported to countries in Asia and Oceania.

Pitak said to avoid too many back orders, Honda would make changes to its production line to increase its output.

Honda plans to release two new models next year, although they have not yet been named. However, since the Jazz is the only model that does not currently come with E20 capability, it is safe to assume that this will be the first newcomer. It is likely to be followed by a new City.

"Our focus is to be a brand that customers are happy to own," Pitak said. "High customer satisfaction, latest technology, good after-sales service and new-age design are the things we are constantly striving to achieve."

Pitak said Honda was still in the process of developing its eco-car, but it will roll out onto the Kingdom's roads within two years.

The government's eco-car programme offers special incentives to carmakers to produce cars with engines of up to 1,300cc and fuel consumption of less than 5 litres per 100 kilometres. The cars must also meet Euro 4 emissions standards, which limit carbon-dioxide emissions to 120 grams per kilometre.

At least half of Honda's eco-cars will be marketed locally and the rest exported to Asean, Asia-Pacific and European countries.

Earlier this year, Asian Honda Motor announced plans to invest Bt6.2 billion in a second manufacturing plant in Thailand as part of its bid to win government backing to build eco-cars here. The plant is being built in Ayutthaya province, where Honda's first factory is located, and is expected to double the company's annual production capacity to 240,000 vehicles a year. Production at the new factory is scheduled to start next October.

Vijo Varghese

 The Nation