First-car scheme: makers, banks stand to gain
Carmakers, auto-parts makers and banks will likely gain from the government's first-car scheme.
The Cabinet yesterday approved government rebates for up to Bt100,000 in excise tax on the first purchase of a car or pickup truck from this Friday to the end of next year.
Under the rules, the rebates will available after the first year of ownership, the vehicle must cost less than Bt1 million and it cannot be sold within the first five years.
Kim-Eng Securities (Thailand) said this programme was good news for car and auto-parts suppliers and banks with auto-loan portfolios.
Thanachart Capital is likely to be the biggest winner, as it has the largest customer base and market share. Others likely to benefit are Tisco Financial Group, Siam Commercial Bank, Kiatnakin Bank and Bank of Ayudhya.
The faster-than-expected effective date could help ease concerns over car-purchase postponements. Domestic car sales would likely be greatly stimulated by this programme.
Domestic new-car sales stayed at 505,000 units in the first seven months of this year, with more than 900,000 units expected to move for the whole year, the brokerage said, adding that next year's estimate could rise to a million cars.
However, car sales might slow down late this year as buyers might need to delay their car-purchase plan to take advantage of the rebate next year, Kim-Eng said.
An analyst at Finansia Syrus Securities said the measure could prompt carmakers to expand their production capacity with faster launches of new models, which would likely be positive for parts makers.
This year, car production is expected to reach 1.9 million units, higher than the target of 1.8 million. About 1 million units are earmarked for export and the remaining 900,000 for local sales, the analyst said.
Next year's car production is likely to be 2.2 million to 2.4 million units, higher than the forecast of 2 million, on expectations of more than a 50-per-cent increase in domestic sales.
Auto-parts makers including Aapico Hitech, Interhides, Somboon Advance Technology and Thai Stanley Electric will likely get more orders as car production shifts up a gear, he said.
A firm that could enjoy a windfall from this programme is Bangkok Expressway, as traffic congestion as a result of more cars on the road could force drivers to use tollways more, the Finansia Syrus analyst said.
