Small decline in vehicle sales
Growth partnership company Frost & Sullivan is forecasting Thailand’s vehicle sales to decline only marginally in 2016.
Vivek Vaidya, the company’s vice president for mobility in the Asia-Pacific region, said the forecast of a 1.3-per-cent year-on-year drop to 780,000 units was based on the global economic volatility, subsequent challenges to the export sector and persistent high household debt in Thailand.
He said the insufficient growth in Thailand’s gross domestic product of 3.5 per cent, projected over the next five years, was due to low levels of private investment and consumption and global market volatility.
"Lack of high-value-add jobs and productivity constraints, as well as competition for investments from countries such as Vietnam and the pressure to join the Trans-Pacific Partnership, also posed challenges to the Thai economy," he said.
He also said the automotive industry was fast approaching saturation point, with close to 175 vehicles per 1,000 people and the absence of an end-of-vehicle-life policy.
"Rapid urbanisation, averaging 2.3 per cent per annum, and a mismatch between infrastructure growth and vehicle demand continue to restrain vehicle ownership in Thailand," Vaidya said.
He added that the volatility in the export sector was likely to persist this year, putting |further pressure on vehicle-sales growth.
However, he said new models, along with special promotion campaigns, would be central to original equipment manufacturers’ strategies for Thailand this year.
"There is a growing preference for compact SUVs [sport-utility vehicles] and crossovers," he added.
He also said new facelifts and complete model changes were likely to help push sales in key segments, highlighting Honda’s 10th-generation Civic, the Ford Focus facelift, Toyota’s New Innova and the Vios, the new Nissan March, and Mitsubishi Mirage and Subaru Impreza facelifts.
Vaidya said a growing middle class and the government’s eight-year, Bt3.3-trillion infrastructure development programme would further drive demand for vehicles in the short to medium term. He added that the scale of the automotive sector in Thailand, with its significant installed capacity, export orientation and strong linkages with global supply chains had created a self-fuelling natural momentum and economies of scale that aided development of the local market.
