Govt's first car scheme speeds along

The government’s First Car Buyer Programme has been surprisingly popular, with as many as 145,000 vehicles being purchased so far under the scheme. 

Tax rebates for these vehicles amount to as much as Bt11 billion, and it is expected that by the end of the year the target of 500,000 vehicles and Bt30 billion in tax rebates will be achieved. 

As many as 10,000 applications are being received every month, up from 100 per month when the programme first started last year. Passenger cars make up 80,400 units (Bt7.336 billion in taxes), pickup trucks 32,000 (Bt532.6 million) and double-cab pickups 31,600 (Bt2.482 billion). 

Indeed, what will follow is the number of vehicles on our roads. The Traffic Control and Command Centre says the large amount of new vehicles on the roads, when added to existing vehicles and roads that are not being broadened, is causing more traffic problems. According to figures from the Land Transport Department, from May to July, average vehicle registrations have jumped from 20,000 vehicles per month to as many as 50,000 vehicles per month. 

From January to July this year, 582,279 new vehicles were registered at the Land Transport Department, compared to 811,352 for the whole of 2011. 

 

2.5 MILLION VEHICLES IN 2013 

The delivery extension of the First Car Buyer Programme has also provided a turbo boost to the auto industry. 

Suparat Sirisuwannangkura, chairman of the Automotive Industry Group, Federation of Thai Industries (FTI), said a large number of used cars and pickups have been sold in the provinces and neighbouring countries at lower prices since their popularity has dropped significantly due to the First Car scheme that offers tax rebates of up to Bt100,000. 

“This price difference has allowed a segment of consumers, who previously could afford only motorcycles, to consider purchasing automobiles instead, particularly the eco-car. Meanwhile, the tax rebate has made the cost of purchasing a brand new car to drop to the same level as a used car. This has caused many people to turn away from used cars,” he said. 

However, many of these customers are not financially ready to purchase automobiles, Suparat pointed out. 

“But because of the sizeable rebate, they must make a purchase within this year as the First Car Buyer Programme expires by the year-end. This group of people, especially first-time jobbers, may encounter financial difficulties in the future,” he said. 

Meanwhile, auto production in Thailand is expected to reach 2.4 million-2.5 million vehicles (1.4 million-1.5 million domestic and 800,000-900,000 export) in 2013, as auto manufacturers have all invested in raising their production capacity to meet an increase in the demand for both the domestic and export markets. 

A large number of automobiles (200,000 to 300,000) purchased under the programme would be produced next year, since the present capacity is unable to respond to all the demand. The government’s financial and credit measures are also expected to help the public maintain financial liquidity, Suparat said. 

“The government’s economic stimulus, which is injecting huge amounts of cash into the system, is expected to help boost auto sales growth further in 2013, especially for pickups and eco-cars,” he added. 

Auto exports have yet to face difficulties, although many countries are starting to feel the knock-on effects of the European financial crisis. Orders are still flowing in, especially from the Asean region, the Middle East, Australia, Africa and South America. 

Most importantly, the FTI is confident that the positive factors will enable Thailand to gear up into becoming one of the world’s Top 10 auto producers right away, with production capacity of 2.7 million vehicles per year. 

Meanwhile, the production target for 2012 has been raised to 2.2 million-2.3 million vehicles. During the first seven months of this year, production grew by more than 36 per cent to 1.27 million vehicles. 

 

SCHEME DRIVES MARKET UP BY 80% 

Toyota Motor Thailand senior vice president Vudhigorn Suriyachantananont said auto sales in July reached a record 131,646 vehicles, up 80.6 per cent. 

This is made up of 64,430 passenger cars (another monthly record), up 99.6 per cent and 67,216 commercial vehicles, up 65.5 per cent. 

The pickup market, which is part of the commercial vehicle market, reached 58,868, up 68.1 per cent. 

The sales surge is the result of continuously increasing consumer demand due to the government’s stimulus package as well as introduction of many new models. 

Auto-makers have also raised production in order to deliver more vehicles to customers, he said. 

During the first seven months, 738,169 vehicles were sold in Thailand. Toyota was the leader with 289,705 followed by Isuzu with 114,024 and Honda 68,817. 

“August sales were expected to grow after every auto-maker increased production. And from August to the end of the year, the auto market is expected to grow continuously due to clarity on the timeframe for purchasing and delivering vehicles under the First Car Buyer Programme,” he said. 

 

NEW MODELS ZOOM INTO MARKET 

Shortly after launching the Jazz Hybrid, Honda followed up with two more vehciles – the City CNG (Compressed Natural Gas) bi-fuel model and the Freed sub-compact MPV, which is based on the Jazz platform. Nissan launched a replacement for its Tiida model – the Sylphy. Nissan hopes this sedan will help it achieve its sales targets this year. 

Suzuki launched the manual version of its Swift eco-car, which will cater to buyers who want extra performance from the small-engined large-body car. 

Chevrolet actually sped up the launch of the Sonic, powered by a 1.4-litre engine, so that it would qualify for the First Car Buyer Programme. 

Ford has introduced the new Focus, which boasts several market-first features – such as automatic parking assist, an automatic collision prevention system and voice control. 

Mazda is still to launch its CX-5 compact crossover, but has always been active in upgrading existing models with higher equipment levels in order to maintain a high popularity. 

 

SUZUKI UNABLE TO DELIVER 

Suzuki, a newcomer, has been unable to speed up deliveries like other major players as it is enjoying unexpectedly high popularity thanks to its Swift eco-car. 

“Our factory has just been opened this year and time is needed to adjust everything in place. Next year we will definitely be able to produce more vehicles, and our production target for 2013 is as many as 50,000 vehicles. Our target for 2015 is to claim a 5-per-cent market share,” said Suzuki Motor (Thailand) assistant general manager Wallop Treererk-ngarm. 

“Our plant is capable of producing as many as 50,000 vehicles, but there are many factors when adjusting capacity, including planning the workforce or [identifying and appointing] suppliers in advance,” he said. 

Suzuki plans to finish the year with 24,000 vehicles (up from the original 15,000 target) that include 17,000 Swifts. There are 17,000 back orders for the Swift and they are expected to be cleared in the November-December period, Wallop revealed.