The B segment is not currently as well-positioned as that for larger-engine multi-purpose vehicles and consumers are not hurrying to buying this category of vehicle, hence an improvement in sales may have to wait until this time next year, when consumers hopefully will be more confident about political stability, Anuchart Deeprasert, chairman of the association, said recently.
B-segment demand will be supported by first-time car-buyers who can sell their vehicles after holding ownership for at least five years under the conditions imposed by the Excise Department when the government scheme was introduced four years ago.
Sales of larger-engine autos – pickup-based passenger vehicles and sport utility vehicles – saw impressive year-on-year growth in the first half of the year.
PPV sales surged 109 per cent to 32,130 units, while SUV sales grew by 16 per cent to 18,322 units, reflecting the fact that consumers in the middle to upper segments of the market can still afford higher-priced vehicles despite the ongoing economic uncertainty, he said.
For eco-car and B-segment vehicles, sales in the first half dropped by 6 per cent and 12 per cent respectively from the same period last year, but sales of both types are expected to be rebound in the second half of 2017.
The association expects overall domestic car sales in the second half of this year to come in at around 400,000 units, against 360,000 units during the first six months, as auto-makers will launch new minor-change models to enhance the range of options available to consumers and boost sales during the final two months of the year, the association chief said. These minor-change offerings will, however, be seen more at the high end of the market and apply to larger-engine vehicles rather than small-engine ones, as individuals in the middle to upper segments have sufficient purchasing power to change cars at this time, he added.
The overall auto hire-purchase market should see its first expansion for four years in 2017, with the association forecasting growth of 3-5 per cent in line with the country’s expected economic growth, assuming continued political stability.
As to this year, new auto lending is expected to drop by 3-5 per cent, Anuchart said, adding that the banks were still applying tighter criteria in an effort to acquire better quality customers and prevent a rise in their non-performing loans.
In the past, hire-purchase lenders allowed car buyers to make a down payment of 10-15 per cent of the vehicle’s price, but the requirement is now 20 per cent, while pricing promotions have been toned down considerably as both dealers and hire-purchase lenders do not believe they do much to enhance purchasing power in the current economic climate, he explained.-