FIRST CAR BUYER PROGRAMME
Auto industry gets turbo boost
Vehicle sales could reach 1.3 million this year
The government's "buy your first car now, get the car next year" policy, which has undergone an extension in terms of the vehicle delivery period, is considered the biggest boost in the auto industry's 50-year history.
Industry sources say the government's initial Bt30-billion budget, to be paid back to 500,000 first-time car buyers, can easily be raised to cater to an additional 100,000 buyers, who are expected to speed up car purchases before the government's December 31 deadline expires.
As a result, automobile sales in Thailand could reach 1.3 million vehicles this year, one source said.
The extension for vehicle deliveries under the First Car Buyer Programme has drawn many opinions from the private sector. The Nation reports:
FTI FEARS FALSE DEMAND
Suparat Sirisuwannangura, vice chairman of the Federation of Thai Industries (FTI) and president of the Automobile Industry Club, said the vehicle delivery period extension benefits consumers. It would help the government reach its 500,000-vehicle target previously projected, he said, but added that it was left to be seen whether the number would reach 600,000.
"However, the concern is in cases where more than one order is placed for vehicles by using the names of relatives or nominees. But when it is time for delivery, certain customers may change their minds. Auto-makers are presently adjusting production by reducing manufacture of 1,800cc and 2,000cc models and assembling more models that fit the programme. So if there are more overbookings than actual sales, the auto industry will be chaotic. The marketing department of each company must be prepared," he said.
According to Suparat, auto production is at full capacity (with overtime being introduced), and parts suppliers are also running at full steam.
"It is expected that total auto production will reach 2.2 million to 2.3 million vehicles this year, with 1.2 million vehicles being sold domestically and 1 million being exported."
CARMAKERS PREPARING HIGHLIGHTS FOR YEAR-END
Industry sources said that although auto-makers are concerned with overbookings or problems concerning marketing plans, they must automatically adjust their plans quickly in order to fully participate in the First Car Buyer Programme.
There were reports recently that Toyota Motor Thailand, which initially planned to launch its eco-car in March 2013, may speed up plans and unveil the vehicle at the motor expo in December this year.
Toyota could well start accepting orders for the new model before the year-end, making it eligible for the First Car scheme.
Toyota is the last auto-maker to launch its eco-car following Nissan, Honda, Mitsubishi and Suzuki. The eco-car market is expected to reach 100,000 vehicles this year.
Some say that Toyota's car will be "shared" with the model launched in India, but others say the car is being developed under the Aico project.
However, insiders have recently said that Toyota will develop its eco-car from the Dear Qin concept car, which was unveiled at the Beijing Auto Show earlier this year. The Dear Qin is the prototype of Toyota's Small Car Global Platform.
Meanwhile, other manufacturers are also going on the offensive. Honda, for example, has introduced the Jazz Hybrid, priced at only Bt768,000. The carmaker plans to sell 10,000 Jazz Hybrids during the first year.
Chevrolet has sped up the launch of its Sonic subcompact that replaces the ageing Aveo. The Sonic, initially powered by a 1.4-litre engine and available in both sedan and hatchback body types, is priced from Bt548,000.
Ford, too, has been doing its homework, earlier offering a 1.5-litre version of the Fiesta so that it qualifies for the First Car Buyer Programme. There's presently a 4-month waiting period for the Fiesta as well as other eco-car models.
In the end, it seems the government's First Car scheme is more of a populist policy that's also had the auto industry in its highest gear since it was created more than 50 years ago.
Although benefits include increased sales for carmakers and easier affordability for buyers, we must not forget that the money comes from taxpayers. This could mean that consumers may have to cough up more in taxes in the future to make up for this kind gesture from the government.
We may even have to pay higher road taxes to the Land Transport Department, which has been criticised for running out of licence plates due to the high rate of 50,000 new vehicle registrations per month under the First Car scheme.
The Cabinet has approved the extension of the vehicle delivery and registration period under the First Car Buyer Programme, government spokeswoman Sansanee Nakpong said.
"Those who wish to use their rights can submit additional documents at Excise Department offices within 90 days of vehicle delivery," she said.
According to the Finance Ministry, 93,833 people have applied for a tax rebate from September 16 last year to July 13 this year. For this period, the amount of excise tax for rebate was Bt6.8 billion. However, it is expected that auto demand will rise further during the second half of the year.
"Those who wish to use their rights must purchase or place orders, as well as file an application for the programme by December 31 this year. And after the vehicle is delivered, the buyer must file the required documents at any local excise office in 90 days," she said.
The order for the vehicle must also be placed by the same person applying for a rebate, she advised.
The Cabinet approved the extension after auto companies stated that approximately 425,000 orders this year would qualify for the First Car project but that they would be unable to deliver all vehicles by the December 31 deadline.