By GREG LOWE
THAILAND’S domestic auto sales are expected to plunge another 15.4 per cent this year, says the country’s biggest car maker. But industry observers reckon the decline could be worse.
While the country’s economic fundamentals remain sound and its low-car ownership rate offers strong sales opportunities, the effects of the global downturn will cause the market to shrink in 2009, says Toyota Motor Thailand.
‘We foresee the domestic automobile market at 520,000 units, down 15.4 per cent from last year,’ said Mitsuhiro Sonoda, president of Toyota Motor Thailand. ‘This will comprise 205,000 passenger cars and 269,000 one-tonne pick-ups.
‘The forecast of 520,000 units comes from the trend in the fourth quarter of last year, which we feel will continue throughout 2009.’
Despite passenger car sales surging 33.3 per cent last year, overall domestic sales eased 2.5 per cent to 615,270 units, after high diesel prices knocked the bottom out of the lucrative one-tonne pick-up market, which fell 17.6 per cent to 334,282 units. Pick-up trucks account for 70 per cent of all vehicles produced in the country, with 63 per cent exported, says the Thai Federation of Industries.
Industry forecaster CSM Worldwide predicts 2009 total production to fall 24 per cent to 1.05 million to 1.10 million units. It reckons export and domestic sales will decline 28 per cent and 18 per cent, while export/domestic sales production will adjust to 55/45 per cent.
‘Pick-ups will be most affected,’ said Hajime Yamamoto, director of CSM Worldwide Thailand. ‘For production, we expect a 30 per cent drop for pick-ups, with a less-than-10 per cent drop for small cars, as domestic demand is still strong.’
‘Recovery will be in 2011 for production, as we expect major eco projects start full production despite delays by some OEMs,’ he said. ‘Honda seems to be less affected, whereas Toyota and other pick-up manufacturers face a bigger impact. Toyota’s Mr Sonoda said: ‘We expect our sales to total 221,000 units in 2009, a similar drop to the industry of 15.7 per cent from last year. We aim to maintain our market leadership in the passenger and commercial categories and achieve a 42.5 per cent market share.’
Siam Nissan Automobile predicts its sales to contract to 25,000 from 28,000 last year, though it has aggressive plans to boost its annual production capacity to 200,000 units in 2010 with the launch of its Thai Eco-Car project.
GM Thailand’s sales grew 9.9 per cent to 23,343 units last year, above the company’s average 9.4 per cent growth in the Asean region. Thailand accounted for more than 70 per cent of GM’s total regional sales. The company won’t release its 2009 forecast, citing ‘uncertainty in domestic and export markets’.
The auto industry contributed 8.4 per cent of Thailand’s gross domestic product in 2007 and is the country’s third-biggest export earner.
Thailand is the world’s 14th largest auto maker by production, according to CSM Worldwide. Last year it produced 1.4 million vehicles, with exports comprising 60 per cent of total vehicles produced, prior to the global slowdown.
Published January 21, 2009
© The Business Times