First Car scheme boosts sales at motor expo

This is the 29th time that the Motor Expo, which is staged in December every year and just ended on Monday, has been held.

In the past, these two shows were held at different venues. The Bangkok Motor Show gained wide acceptance during the days that it was held at Suan Amporn, while the motor expo chose to exhibit vehicles at Central Plaza Lat Phrao.

The motor expo later relocated to the Impact Exhibition Centre in Muang Thong Thani, where it is still staged. Meanwhile, after Suan Amporn was seen as too small, the Bangkok Motor show was later moved to the Bangkok Trade and Exhibition Centre (Bitec), and just a few years ago organisers moved it to Impact as well.

On Monday, the last day of this year’s motor expo, the 85,000 orders placed represented the highest ever achieved in an auto exhibition event in Thailand. It is undeniable that the government’s First Car Buyer campaign played a major role in the car-buying frenzy that is taking place.

According to the regulations, passenger cars that qualify for the programme must be locally assembled and have engine sizes of no more than 1,500cc, priced at not more than Bt1 million and must not be sold for a period of five years. Pickup trucks that qualify must also be priced under Bt1 million. Those who sell the vehicles before the end of the five-year minimum ownership requirement must return the excise tax rebate to the government. The sales process of these vehicles must also be completed within January 1, 2013, and the vehicles must be delivered to customers before June 30, 2013.

Since the motor expo is held in December every year, which is a festive and shopping season not only for automobiles but practically everything as every business tries its best to record the maximum possible sales before the year ends. With all sorts of promotions being offered, the motor expo always enjoys very high sales figures every year.

Add that to the sales boom triggered by the First Car Buyer scheme that will end on December 31, it is no surprise that a record 85,000 orders were placed. And if we break up the vehicle categories, we’ll find that vehicles purchased with the First Car Buyer promotion makes up more than 70 per cent of all sales at the show this year.

What I think is worrisome for the First Car Buyer programme is the unique culture and traditions of the Thai people when compared to other people in the world, particularly personal financial credit.

In many countries, especially in Europe or the US, this is considered very important. But in Thailand, this is often taken lightly, and we always see people using other people’s credit or qualifications to purchase goods.

In the past, we have seen many auto companies offering special promotions to particular occupations such as government servants and state enterprise employees. The down payment may be waived or the interest rate may be much lower than usual.

In this case, I may not qualify as a buyer, but I can still buy the car by using the qualifications of my relatives or friends.

What I fear about the First Car Buyer programme is that if I ask Mr A to use his qualifications and purchase a vehicle with Bt100,000 tax rebate, what would happen if I suddenly am unable to continue paying the instalments after the first year and after receiving the rebate in cash?

Apart from having the vehicle repossessed by the finance company, I would also have to pay back the Bt100,000 to the government.

Since I am unable to pay the monthly instalments, I would also likely be unable to pay back the tax rebate, and this will lead to big problems.

The finance company and the auto retailer do not have any problems here as both would have achieved their financial goals (including the repossessing of the car). The car buyer is in fact the one who is in trouble and I am curious whether he will be sued for bankruptcy or anything else. And finally, will the government pardon offenders and write off the tax rebate amount to be paid back?

This is the question that we all want to know from the government that has been very active in launching populist policies.