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Domestic car sales suffering but exports shoring up industry

The prolonged political unrest in Thailand could hurt the Kingdom's automotive industry but an increase in automobile exports has provided some stability for the industry, observers say.

Dushyant Sinha, Frost & Sullivan's automotive-practice Asia-Pacific associate director, said the political unrest had hurt the car industry by lowering demand.

"A more direct impact is on consumer confidence, which when coupled with general uncertainty and tighter financing has adversely impacted consumer spending," Sinha said.

"On a more indirect level, the ensuing weak economic performance is going to impact demand for commercial vehicles, including pickups."

Surapong Paisitpattanapong, vice chairman and spokesman for the Federation of Thai Industries' Automotive Industry Club, said lower consumer confidence and the termination of the government's first-car tax scheme had affected the industry's production rate and domestic sales.

"Car production in April was lower than in the same month last year because manufacturers no longer produce cars to feed the first-car scheme," he said.

He said 126,730 vehicles were produced last month, 25.64 per cent fewer than in April last year and 30.11 per cent lower than this March.

Total production from January to April was 644,222, which was 27.77 per cent lower than the same period in 2013.

Surapong said lower domestic demand because of the political uncertainty, a slumping economy, high household debt and strict loan regulations imposed by commercial banks led to lower automobile sales.

He said the total number of domestic sales in April was 73,242, a decrease of 33.2 per cent year on year and 12.78 per cent lower than March's figure because of fewer trading days in the month.

However, despite lower domestic sales, automobile exports in all sectors - including ready-made cars, engines, other parts and spare parts - were flourishing.

Surapong said the export volume of cars had increased more than last year for three months in a row because of the global economic recovery.

He said 69,804 ready-manufactured cars had been exported in April, an increase of 2.34 per cent year on year but 38.39 per cent lower than March, again because of fewer operating days.

The export value of cars totalled Bt33.08 billion last month while that for engines, components, and spare parts totalled Bt2.32 billion, Bt15.48 billion and Bt1.53 billion respectively. This represented increases of 19.35, 6.81 and 26.36 per cent respectively year on year.


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