Thai domestic car sales suffer first fall in two-and-a-half years in June

By Kitiphong Thaichareon and Orathai Sriring

 

FILE PHOTO: Vehicles are seen stuck in traffic along a road in Bangkok, Thailand December 18, 2018. REUTERS/Soe Zeya Tun

 

BANGKOK (Reuters) - Thailand's domestic car sales declined for the first time in 30 months in June, as finance firms used stricter lending criteria after the central bank moved to talk down a surge in auto loans amid concern about high household debt.

 

Sales dropped 2.1% in June from a year earlier after rising 3.7% in May, according to the Federation of Thai Industries (FTI).

 

Thailand is a regional vehicle production and export base for the world's top car manufacturers. The industry accounts for one-tenth of the Thai economy, and has been one of a few growth drivers at a time of falling exports.

 

The FTI attributed the sales contraction to tighter car loan approvals and a high comparative figure last year.

 

"Finance for car purchases is tougher, with very high rejection rates, particularly for smaller cars," said Surapong Paisitpattanapong, spokesman of the FTI's automotive industry division.

 

"The central bank has talked too often about car loans".

 

Car dealers will have to work harder to help clients get loans, or to shift to the high-end market, Surapong said.

 

Although the Bank of Thailand (BOT) has not taken any policy action, the mere prospect of car loan curbs has been enough to tighten the finance spigot to domestic buyers.

 

On Wednesday, BOT Governor Veerathai Santiprabhob said the central bank is discussing with banks and non-bank lenders adjusting their lending process to focus on borrowers' debt-service ratios.

 

Surapong said the FTI's 2019 car sales growth target of 2.4% should still be achieved, as it is conservative.

 

In January-June, sales rose 7.1% from a year earlier, after a 19.5% jump in the whole of 2018, helped by easy auto loans.

 

(Editing by Richard Borsuk)

 

-- © Copyright Reuters 2019-07-18

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I can only surmise those at the top don't need loans and they are the ones that couldn;t give a damn about the average Somchai.

Finance for car purchases is tougher, with very high rejection rates

 

Good news for the typical low paid weak willed Thai who cannot afford the repayments

 

16 minutes ago, webfact said:

Thai domestic car sales suffer first fall in two-and-a-half years in June

 

They had a good run then!!

42 minutes ago, webfact said:

Thailand's domestic car sales declined for the first time in 30 months in June, as finance firms used stricter lending criteria

Good.

Spin this....Thais hold on buying last years models ,waiting for the 2020's to arrive ...cash is flowing ''muan duhrm ''....

1 hour ago, toofarnorth said:

I can only surmise those at the top don't need loans and they are the ones that couldn;t give a damn about the average Somchai.

similar attitudes to what I would find in my home country..

1 hour ago, webfact said:

Thailand's domestic car sales declined for the first time in 30 months in June, as 

Those already brown breaded in crashes are no longer in a position to buy another one .. 

1 hour ago, webfact said:

Car dealers will have to work harder to help clients get loans, or to shift to the high-end market, Surapong said.

Expect to see more BM's and Merc's garlanding power poles , tree's etc or sleeping upside down .. 

I also think the market is oversaturated with cars. Almost every family has got a car, so there should be a turning point at some time. Maybe it came now that slows down the rate of selling cars. The manufactures can't expect the customers to buy a new car every 5 years.

Better to be rejected for a loan on a car that you really can't afford than to be burdened with debt that you can't afford.

37 minutes ago, Thunder26 said:

I also think the market is oversaturated with cars. Almost every family has got a car, so there should be a turning point at some time. Maybe it came now that slows down the rate of selling cars. The manufactures can't expect the customers to buy a new car every 5 years.

70 million people 40 million cars.  

5 hours ago, webfact said:

In January-June, sales rose 7.1% from a year earlier, after a 19.5% jump in the whole of 2018, helped by easy auto loans debt.

 

car sales drop. so did motorbikes.

 

a leading indicator to the local economy?

11 hours ago, nickstav said:

Better to be rejected for a loan on a car that you really can't afford than to be burdened with debt that you can't afford.

But that is common sense thinking.  This is Thailand

+ Big spending farangs are taking their pensions to Vietnam and buying there.

17 hours ago, canopus1969 said:

Finance for car purchases is tougher, with very high rejection rates

 

Good news for the typical low paid weak willed Thai who cannot afford the repayments

Not so good news in the government's new financial stimulus package to lift domestic consumption.

Somkid says:

"It includes fiscal measures and a financial aid package including loans to workers, small business and farmers".

So it looks like car sales will soon be back on track and household debt will continue to rise.

The filthy rich elite and their big businesses depend on this loan money to improve their sales and income.

The new policy is a boost for big business and a kick in the teeth for the battlers. 

And what's the reason !!??? Allways investigate "cause and effect" and taken action after the result !!!!

Quite confusing.

i see talk of stimulating the Thai economy. 

And here I read about tighter loan approvals. 

21 hours ago, Father Fintan Stack said:

You need a work permit and Vietnamese driving license to own a vehicle in Vietnam. 

 

So that rules the pensioners out.

Does the list below mean you have to qualify on all FOUR points?  What are the rules about renting?

 

Foreigners are permitted to purchase a car in Vietnam if they:

• Are living and working in Vietnam
• Possess a valid passport
• Have a visa that is longer than three months
• Have a valid work permit and a Vietnamese driver’s licence

15 minutes ago, Father Fintan Stack said:

Not sure about renting.

 

Work permit definitely required though.

Damn!  I'd just decided to take my pensions elsewhere because of Thailand's ever increasing hassle.  I've liked Vietnam & visited four times.  I don't think I could live there without a car though.

Don't see any mention of lowering taxes to boost sales.
Take this as an axample of pricing:
The Toyota CHR, made in Thailand is priced in Thailand at 1,040,000 baht.
Same car for sale in Australia, made on the same assembly line in Thailand, I priced it recently at just under 700,000baht. Drive away.
What's in the difference? Taxes.

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On 7/18/2019 at 9:21 PM, marcusarelus said:

70 million people 40 million cars.  

Yes  I  think its  good  to let under 18's year old drive  cars