Why are Toyota Cars, which are Manufactured in Thailand So Expensive?

[Banana7]

Looking at 2020 Toyota Corolla Altis Hybrid High its list price is 1,099,000 baht in Thailand.

A 2021 Toyota Corolla Hybrid in USA, lists for $23,400, which is 732,420, using 31.3 baht = 1 USD

The body of these cars looks looks exactly the same. The USA model has enhanced features like heated mirrors, etc.

 

Basically Thailand built cars are about 50% more expensive than USA built cars. This comparison doesn't include price increases in Thailand for the 2021 model. Every year prices go up. The USA price doesn't include sales tax (some states have none) and delivery (about $800).

 

USA workers are unionized, have more fantastic benefits, much better than Thais and USA workers have much higher wages than Thai workers.

 

Why are Thai built cars so expensive?

 

 

[dimitriv]

I checked prices for the Toyota Fortuner. It starts at 1.3 million TBH, which is very cheap compared to prices of similar cars in Europe. Did you check other models? Is your example really made in Thailand or imported?

 

 

Edited August 20, 2020 by dimitriv

[Banana7]

15 minutes ago, dimitriv said:

I checked prices for the Toyota Fortuner. It starts at 1.3 million TBH, which is very cheap compared to prices of similar cars in Europe. Did you check other models? Is your example really made in Thailand or imported?

 

 

All VIN plates I have checked on Toyota Corolla cars in Thailand are made in Thailand.

Also, I know the Camry are much more expensive in Thailand than in Canada.

Fortuners are classified as trucks and they are built on the Hillux frame.

This thread is about cars not trucks. Big difference between cars and trucks.

Edited August 20, 2020 by Banana7

[jackdd]

Because Toyota calculated that by selling it at this price they make the most profit.

[Upnotover]

Because if they tried to sell in US at Thai prices they couldn't.  It's just a market, nothing to do with costs.

[eppic]

Whelp, it's something like this:

 

1. Import duties (tax)

2. Excise tax and VAT

3. Lack of scale

 

Auto manufacturers are subject to local content laws in virtually all developing countries.

 

Vehicles can be assembled in a variety of "kits" such as CKD (complete knockdown) or SKD (semi-knockdown).  The amount of local content varies by the type of kit and some other factors, such availability of acceptable quality locally sourced parts.  The more parts sourced outside the country, the lower the local content, the higher the import duties.  Of course, the manufacturers don't want basically all parts to be imported then quickly slapped together with minimal local labor. Then there are excise taxes that vary by type of vehicle and engine size

 

So:

fully imported vehicle (completely built up or "CBU") = VERY VERY expensive, can be 2-3 times US/Europe prices

SKD = VERY expensive due to limited local content

CKD = moderately expensive depending on how man parts can be sourced locally.

 

Cheap labor is not really a big factor in the equation, this is dwarfed by taxes.

 

With local content requirements, local suppliers are typically very inefficient compared to global suppliers, so costs go up.

 

Another reason is because of the capital intensity of the business, plants most have reasonably high volume to produce at a profitable level. 

 

So, US/European/Japanese/Korean cars will almost always be more expensive in developing countries than the OEM home country, although some OEMs are willing to sell at a loss for a period of time to gain market share or far what is often foolishly called "strategic reasons"

 

There you have it

Edited August 20, 2020 by eppic

[PatOngo]

GREED!

[kokesaat]

You can get the answer to this question by visiting any new dealer in Thailand.  Look at the price sticker pasted on the window. My 2018 Revo had a 4% VAT added to the sales price.  Most all the cars have VAT rates between 10-20+%, mostly depending on size of engine.

https://www.mazars.co.th/Home/Doing-Business-in-Thailand/Tax/New-Excise-Tax-Rates-on-Cars

 

I'm of the opinion that the best vehicle deals are on trucks, where the price seems competitive (or better) than US prices.  My Toyota REVO drove off the lot for 745,000 Baht with one year full coverage insurance, Toyota bedliner, Toyota window film, floor mats, and a few promotional freebies thrown in.  I've driven a few Toyota Tacomas in the US and I feel the Thai Revo is as good a truck, especially for the price.

[richard_smith237]

All governments need tax to operate.

 

Thailand suffers terribly from a lack of people paying income tax. 

From very low tax bracket at low wage level (fair enough) to business and the wealthy pulling every tax avoidance opportunity possible, to priministers changing laws to avoid tax on the sale of a massive telecoms company, thus avoiding massive tax.

 

 

Thailand has significant tax deficits meaning it can;t support public services such as hospitals, police, fire service, there is no ambulance service). This of course leads to graft, especially within the low paid police and military.

 

The extremely low wages combined with a degree of power is a perfect situation for graft to occur. Thats the police and military sorted out. 

What about hospitals.... donations. 

What about fire service... less donations, terribly poor funding.

Ambulance? private hospitals or body snatchers !!!... say no more. 

 

So.. who pays for everything else????  Tax on purchases... Tax on cars is a massive money maker for the government. 

Even rubbish cars are taxed to the hilt.....  the money doesn’t go into driver education, licensing road improvement - it goes into the government coffers (pockets).

 

 

[Bruce Aussie Chiang Mai]

All Thai built cars are also approx 30% cheaper in Australia.

A Corolla Accent Hybrid is 620,000 baht.

????❤???????? but not for cars.

[Rmac442]

Not only Toyota ..the pricing of cars here is like a cartel ..the price is outrageously similar for all similar model types .. 

All assembled cars should be cheaper as imports are cheaper with a strong bt.

Bottom line ..little to do with production cost ..

[Pilotman]

not all the components will be manufactured here, some will be imported and so add to the cost. They are assembled here, which is not quite the same thing.  They are certainly cheaper than in the UK, not by much admittedly. Toyota will price them to attain maximum market penetration while maximizing profit. It's the market place that dictates the price that can be asked. To answer the OP question directly; they are, because they can be.   

[Grumpy one]

6 hours ago, Bruce Aussie Chiang Mai said:

All Thai built cars are also approx 30% cheaper in Australia.

A Corolla Accent Hybrid is 620,000 baht.

????❤???????? but not for cars.

Spot on. just look at Camry prices. Eye watering  ????

[Gulfsailor]

As some posters already mentioned, it’s excise tax. A lot of people in Thailand do not pay income tax. The affluent included. So in stead of hiring 10s of thousands of tax inspectors to check books, the government chooses to heavily tax luxury goods to balance its budgets. That’s why tax on pick up trucks is low, on a passenger car it’s moderate and on a luxury import or super car very high. The same goes for other luxury items such as wine, crystal glassware, air conditioners, perfume and a few others categories, regardless if they are imported or manufactured locally. 

[pineapple01]

Overview the Tax You Paid back home on Your Earnings. A Thai with a mid range but good job pays a pittance. Car Tax here isn't your business. The Government Tax to suit Thai Nationals, not our piddly disgusting pensions.

[Banana7]

12 hours ago, dimitriv said:

I checked prices for the Toyota Fortuner. It starts at 1.3 million TBH, which is very cheap compared to prices of similar cars in Europe. Did you check other models? Is your example really made in Thailand or imported?

 

 

Here is the VIN plate from a Corolla, indicating made in Thailand.

 

 

Edited August 21, 2020 by Banana7

[Hi Tea]

10 hours ago, kokesaat said:

Most all the cars have VAT rates between 10-20+%, mostly depending on size of engine.

Nonsense, VAT in Thailand is currently a flat 7%.

[Hi Tea]

3 hours ago, Gulfsailor said:

A lot of people in Thailand do not pay income tax.

Just like every other country, then.

[richard_smith237]

5 hours ago, pineapple01 said:

Overview the Tax You Paid back home on Your Earnings. A Thai with a mid range but good job pays a pittance. Car Tax here isn't your business. The Government Tax to suit Thai Nationals, not our piddly disgusting pensions.

Someone commenting on a forum designed for discussion that this discussion is none of our business !!! 
 

erm..,, 

[The Deerhunter]

On 8/21/2020 at 7:49 AM, eppic said:

Whelp, it's something like this:

 

1. Import duties (tax)

2. Excise tax and VAT

3. Lack of scale

 

Auto manufacturers are subject to local content laws in virtually all developing countries.

 

Vehicles can be assembled in a variety of "kits" such as CKD (complete knockdown) or SKD (semi-knockdown).  The amount of local content varies by the type of kit and some other factors, such availability of acceptable quality locally sourced parts.  The more parts sourced outside the country, the lower the local content, the higher the import duties.  Of course, the manufacturers don't want basically all parts to be imported then quickly slapped together with minimal local labor. Then there are excise taxes that vary by type of vehicle and engine size

 

So:

fully imported vehicle (completely built up or "CBU") = VERY VERY expensive, can be 2-3 times US/Europe prices

SKD = VERY expensive due to limited local content

CKD = moderately expensive depending on how man parts can be sourced locally.

 

Cheap labor is not really a big factor in the equation, this is dwarfed by taxes.

 

With local content requirements, local suppliers are typically very inefficient compared to global suppliers, so costs go up.

 

Another reason is because of the capital intensity of the business, plants most have reasonably high volume to produce at a profitable level. 

 

So, US/European/Japanese/Korean cars will almost always be more expensive in developing countries than the OEM home country, although some OEMs are willing to sell at a loss for a period of time to gain market share or far what is often foolishly called "strategic reasons"

 

There you have it

The other thing is that there is high import tax charged on the SKD & CKD kits for the Thai assembler, which is refunded when the completed car is exported.  But not if the car is sold in Thailand. Then there is local tax as well.  So the same car assembled in Thailand costs more in Thailand than when it is exported and sold in Australia, for example

[pineapple01]

Its only a concern to folks who come here and can only get low paid Teaching Jobs. Ferangs who are sent here by US, Euro and Australian companies never whinge here on TV. They dont live in Fan Rooms and enjoy a Life, not an Existence on the Cheap. Its not any Business of Guests here in Thailand what Taxation  they see fit to levy.

[AgMech Cowboy]

TAX is the simple answer. The bigger the engine, the more conveniences, the more luxurious, the more tax. Cheapest prices go to farm trucks with 2 doors (no seat behind the driver), small engines and leaf springs. Still there is a large TAX.

[Rdrokit]

Even cars assembled in Thailand have a tax added. The parts that come into Thailand get an import tax of about 30% so that is one reason as most of the parts are imported then assembled in Thailand. There is also a 7% VAT added on so even though the labor costs are low the added taxes make most of the cars more expensive. 

I just bought a top spec Mazda CX30 at 1,199,000 which is about $38,000 US. The same car in the US is $32,000 and in the US the car has a 2.5 liter engine with AWD and here in Thailand it has a 2 liter engine and no AWD so it's not just Toyota.

 

[Thomas J]

Most everything is more expensive here in Thailand than the USA except for labor which is noticeably cheaper.  

This is the suggested retail price of a Camry in the USA vs the suggested retail price of the Camry here in Thailand At a 31.5 exchange rate that makes the USA Camry 769,387.50 thb.  Not just a little difference but double. Also in the USA cars never sell for their full Manufacturers Suggested Retail Price 

[Guderian]

Why are Toyota Cars which are Manufactured in Thailand So Expensive?

 

 

There, I fixed the title for you, lol.

[unamazedloso]

They have like a gazillion people working for them that dont need to be there. Someones gotta pay them and they like to act like they have a 1st class service to the customers. makes me sick and i dont get it. For this reason i wont buy another Toyota. If i buy a car i dont need phone calls to talk about every couple months.

They dont even offer better engine options or models of interest to me. They suck!!

[Bender Rodriguez]

if made in thailand, only GREED

[Jenkins9039]

Same with BMW.

 

Always thought they were imported, when i bought my most recent one M3 sport, i just thought it was because it was an import, being aware there were some factories in THAILAND for certain brands, to my shock after 6000klm and 4 months later, on deciding to change to another BMW (upgrade) and learning it had already lost 1m+ in costs, i also learned to my horror that it was manufactured in Thailand, thinking it was manufactured in Germany, and having no cost cutting or other for safety.

 

So it does make you question the high increase as domestically built.

 

[Tuvoc]

Yes, our Toyota Fortuner TRD had a list price of 1.7M Baht.  Could probably buy a BMW X5 here in the UK for that. Hugely expensive.

 

Trucks (pick-ups) seem reasonably priced, if one of those appeals to you.

[mrmicbkktxl]

7 minutes ago, Bender Rodriguez said:

if made in thailand, only GREED

BMW X5 assembled in Thailand 5million bt in Thailand, in the USA 1.8 million