Factors that can help independent importers survive

So I told him, as a friend who grew up with him, that I have never hated the car-import business, and that I am the only one in the industry to never use the term “grey market”. I refer to them as “independent importers” every time because I consider this business legitimate and not a business that is half right, half wrong.

However, I would divide this business into two groups. First, there are those who import the vehicles legally and maintain a high level of responsibility. Second, there’s the group that imports vehicles by using legal loopholes or do not give buyers the true information regarding the vehicle. They also do not take responsibility for the vehicle after it has been sold, and abandons customers who have to solve any problem by themselves. This is the group of importers that I do not support and do not want to see in the Thai automobile market.

In my point of view, there are factors that help independent importers to survive in the highly competitive and lucrative market. I call them “7P”, which are as follows:

PRODUCT – This means that they offer different products compared to the official distributor. Independent importers are often able to offer fresh new vehicles that have been launched in advanced markets before the official distributor. This attracts customers with high purchasing power who follow the movements in the global market and want only the latest models. However, they are unable to wait for the official distributor, who has to go through various official procedures before being able to launch a new product, to bring in the vehicles.

PRICE – This refers to the retail pricing that independent importers, who have much lower operating costs, are able to offer. Many times even when the official distributor retaliates by setting similar prices, the independent importer usually offers a higher level of equipment.

PERCEPTION – This is very important in the Thai market, because consumers here always think that vehicles made in Thailand are inferior to those manufactured abroad. They also believe that even though the products may come from the same origin, those that are shipped to Thailand have inferior quality to those sent to developed markets such as Japan, Europe or the US.

This perception rings true even for vehicles that are made in Thailand. A large number of consumers believe that vehicles made for the domestic market are inferior to those that are made here but destined for more advanced markets like Japan.

This makes consumers more confident in vehicles that are sold in other parts of the world. And no manufacturer has attempted to seriously change the attitude of the consumers in this respect.

POLITICS – When I say politics, I am referring to Thai politicians. As long as politicians still like to purchase vehicles from independent importers, or even worse, like to use loopholes in order to get lower prices than legitimately imported vehicles, this problem will remain difficult to solve.

We can check on this by looking at the vehicles that the Cabinet members as well as other MPs own and use, and we will find that there is a very high percentage of imported vehicles.

PROFIT – The profits obtained from the imported car business is another factor that has enabled the number of players to grow dramatically, especially with the strengthening of the baht. The profits are high enough for independent importers to station employees overseas or appoint representatives to search for and ship back vehicles.

POWER – This means that the official distributor lacks the power to defend its market. Some even have individuals in the organisation who help the independent importers, while some have dealers who openly offer service to independently imported vehicles.

In some cases, the official distributor may not have a strong relationship and marketing budget, when compared with direct and indirect financial support from independent importers with strong relations or incentives.

PRODUCER – This refers to the manufacturer or the parent company that sometimes seems not to care too much about this problem. Their policy is that no matter if the car is white or black, if it can cat mice, then it is a good cat. This means that they don’t care where the customer purchases the vehicles, as long as its one of their own.

They might even think that having independent importers will help pressure the official distributorship in that particular country to work even harder.

These are the 7Ps that I personally think are the root to the business conflict between independent importers and official distributors in Thailand.