Show organisers want VAT cut to boost auto sales

Organisers of the annual Bangkok International Motor Show have urged the government to consider temporarily reducing value-added tax to help boost auto sales.

Earlier the Joint Committee on Commerce, Industry and Bangkok disagreed with the auto industry's plea for an interim 3-percentage-point cut in the excise tax.

Jaturont Komolmis, vice chairman of the Bangkok International Motor Show organising committee, told reporters yesterday that auto-makers employed as many as 750,000 workers, and up to 20 per cent of them could lose their jobs due to the slump in auto demand.

"No matter which way, the government should help prevent these people from being laid off due to the decline in auto sales and exports," he said.

Governments in Singapore, Malaysia, India and China have announced tax-cut measures to save their auto industries, he said.

"Singapore does not assemble automobiles or hire any workers, but they still lowered the tax to help the auto sector," he said. "These cuts are only temporary, and will be lifted as soon as the situation improves."

A reduction of the VAT for auto sales from 7 per cent to 4 per cent would be helpful, he said.

"Today whenever a vehicle is sold, whether it is brand new or second-, third- or fourth-hand, there is 7-per-cent VAT, which is redundant," he said.

A revision of VAT rates does not have to be passed by the Cabinet, and could be implemented right away, he added.

Prachin Eamlumnow, chairman of the organising committee, says consumers had been holding off purchases of cars on news that there could be an excise tax cut.

"But it turns out that they can't do it, which means that those who do plan to buy a vehicle don't have to wait any longer," he said.

This will help auto companies taking part in the show to maximise sales.

Prachin said that last year 15,000 orders were placed at the show and he expects a 10-per cent increase this year.

"With the sales slump in January and February, as well as March, which is usually a low sales month since consumers wait for motor show offers, automobile companies will do everything in order to boost sales at the show because this is their last chance," he said.

"The economy may not be good, but we are confident that the show will surely help stimulate the auto market significantly," he added.

As much as Bt20 billion is expected to change hands thanks to the event, and most of that will come from sales of vehicles rather than accessories, which should fetch about Bt2 billion-Bt3 billion.

Last year the show welcomed 1.5 million visitors, and Prachin expects attendance to be up this year.

"We expect 1.6 million to 1.7 million visitors will come, as we have extended the show by two days," he said.

This year the show runs from March 26-April 6, with March 24 and March 25 reserved for VIPs and the press, respectively.

Jaturont said several concept vehicles would be displayed at this year's show as usual, although exhibitors have requested him not to disclose the details to the media.

Among the highlights is the Mercedes-Benz E-Class coupe, also known as the ELK, which will make its right-hand-drive world debut, while BMW will stage a world premier for the Z4 roadster at the show.

The Z4 will be shown in Bangkok before Germany, where the global launch will be staged in May, he said.

There will also be a Lotus Two-11, which was first unveiled in Geneva with only its carbon-fibre body. The car to be shown in Bangkok will be complete with engine and chassis, he said.

The most expensive car will be the Bt35-million Aston Martin DBS, which will be exhibited by Master Car Rental rather than the official importer. The car will be offered for rent for those who want a supercar experience.

Kasikorn Leasing and Krungthai Leasing will offer financing for auto buyers at the show.

Prachin said that more than Bt200 million will be used to stage this year's event, which marks the 30th anniversary of the Bangkok International Motor Show.

The price for show space has been raised by 5 per cent, while the admission charge has gone from Bt80 to Bt100.