Thai Auto Sales Are Expected To Fall Slightly As Market Returns To Normalcy Following Boom: Toyota Executive

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An employee works at an assembly line in the Toyota manufacturing plant located in Chachoengsao province, east of Bangkok November 7, 2012.

Thai auto sales are expected to fall by 9.5 percent this year to 1.3 million vehicles, despite record first-half sales, according to Kyoichi Tanada, the president of Toyota Motor Corp. (NYSE:TM) in Thailand, as the market returns to normal after an industry boom.

Tanada told journalists at Toyota’s mid-year press conference Wednesday that although a record 740,795 vehicles were sold in Thailand during the first half of 2013, a 22.1 percent year-on-year growth, the market is expected to decline during the second half of the year, the Nation, a Thai news outlet, reported.

In a program called First Car Buyer, the government offered cash rebates of as much as Bt 100,000 ($3,217.50), which led to a boom in the country's auto industry. Last year, more than 1.4 million vehicles were sold there.

The record-high sales number for the first half of 2013 in part resulted from back-order deliveries from 2012 orders. Since May, however, the market has started to show signs of slowing down, and this is expected to be the trend for the rest of the year, Tanada said.

Auto sales in Thailand are expected to stabilize at 1.2 million units during the next few years, according to Tanada.

"Although there is a decline compared to last year, the Thai economy is not in a bad condition, so as much as 100,000 vehicles could be sold per month during the second half of the year," Tanada said.

In 2015, when member states of the Association of Southeast Asian Nations (ASEAN), which includes the region’s biggest economies such as Indonesia, Thailand, the Philippines and Vietnam, form a single market and production base under the ASEAN Economic Community, sales are expected to rise.

In 2016, a large number of buyers will rush to buy vehicles before the new carbon-dioxide excise tax takes effect, which could affect the prices of automobiles such as pickup trucks, according to the Nation.

Suparat Sirisuwannangkura, Toyota Thailand's executive vice president, said the 150 grams-per-kilometre CO2 limit could be achieved by passenger cars, but the stringent limit is more difficult for diesel-powered pickup trucks.

"In 2016, the prices of pickup trucks are expected to increase due to the higher excise tax than the present 3 percent, and in 2015 many customers will rush to place orders before the year ends," Sirisuwannangkura said.

Toyota plans to produce a total of 450,000 vehicles in Thailand this year, along with exporting another 438,000 to the global market. Total Toyota exports from Thailand, which include automobiles and original equipment manufacturer parts, are expected to reach Bt 251 billion this year.

The company’s new Vios will be instrumental in helping it achieve its targets this year. The car will be Toyota’s first passenger car to be exported from Thailand to countries outside the ASEAN region.

"Apart from the ASEAN region, the Vios will be exported to the Middle East as well as South America, totalling 58 countries," said Toyota Thailand executive vice president Wichien Emprasertsuk, adding that as much as half of Vios production, 20,000 units per month, will be exported, according to the Nation.

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