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

[samsensam]

On 8/20/2020 at 9:12 PM, PatOngo said:

GREED!

 

some people never miss a thai bashing opportunity, however random and inaccurate.

[HauptmannUK]

Having worked in the motor industry and also for the UK government on technology transfer project I can tell you that in many countries the selling price of a vehicle is only loosely related to manufacturing costs. Price tends to be pitched according to market conditions - maturity of the market, degree of competition, sales tax bands etc.  For example in the LHD EU markets it is relatively easy for new vehicles to circulate between countries and so ex-factory prices and specifications tend to be similar.

Thailand is a relatively closed and protectionist market (difficult to import and register a car from, say, Malaysia, high import taxes etc) and not particularly competitive. There are also various market-distorting taxes, tariffs and regulations. So its quite a mess and probably not worth trying to overthink it and rationalise their pricing.

Pickups tend to be relatively cheap because of low sales tax on working vehicles. Profits on cars like the Fortuner must be huge. The Fortuner is an unsophisticated PPV (Pickup-based Passenger Vehicle) designed for emerging markets, based on the IMV platform and very cheap to manufacture.

One disappointing aspect is the generally low safety spec of Thai-market cars. For example most small cars in the West now come with side airbags, stability control etc.  Not so in Thailand. 

[Ireland32]

On 8/20/2020 at 11:32 PM, 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?

 

 

Bottom of range Fortuner , you have to spend 1.7 to get its Luxury model for a truck that is 

[Ireland32]

1 hour ago, HauptmannUK said:

Having worked in the motor industry and also for the UK government on technology transfer project I can tell you that in many countries the selling price of a vehicle is only loosely related to manufacturing costs. Price tends to be pitched according to market conditions - maturity of the market, degree of competition, sales tax bands etc.  For example in the LHD EU markets it is relatively easy for new vehicles to circulate between countries and so ex-factory prices and specifications tend to be similar.

Thailand is a relatively closed and protectionist market (difficult to import and register a car from, say, Malaysia, high import taxes etc) and not particularly competitive. There are also various market-distorting taxes, tariffs and regulations. So its quite a mess and probably not worth trying to overthink it and rationalise their pricing.

Pickups tend to be relatively cheap because of low sales tax on working vehicles. Profits on cars like the Fortuner must be huge. The Fortuner is an unsophisticated PPV (Pickup-based Passenger Vehicle) designed for emerging markets, based on the IMV platform and very cheap to manufacture.

One disappointing aspect is the generally low safety spec of Thai-market cars. For example most small cars in the West now come with side airbags, stability control etc.  Not so in Thailand. 

I just purchased Rocco for 1.2 it’s got fromt and side 

[Ireland32]

2 hours ago, mrmicbkktxl said:

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

Almost Criminsl

[PatOngo]

2 hours ago, samsensam said:

 

some people never miss a thai bashing opportunity, however random and inaccurate.

It's pretty easy! How many did you hug today? Thai has a capital T, show some respect!

 

 

 

 

Edited August 22, 2020 by PatOngo

[josephbloggs]

On 8/21/2020 at 3:12 AM, PatOngo said:

GREED!

Brilliant PatOngo, well done!  Must have taken you an age to think that one up.

 

It's tax though, but never mind, you just enjoy shouting "GREED" if it makes you happy.

[HauptmannUK]

6 hours ago, Ireland32 said:

I just purchased Rocco for 1.2 it’s got fromt and side 

I did say *small cars*. Thai market small cars are very light on safety kit. 

[PatOngo]

6 hours ago, josephbloggs said:

Brilliant PatOngo, well done!  Must have taken you an age to think that one up.

 

It's tax though, but never mind, you just enjoy shouting "GREED" if it makes you happy.

Greed greed greed...there, I feel much better!......But hey, the Thai's are'nt greedy, are they? Did you ever buy new cars in Thailand, JB? Did you ever pay income tax? Did you ever educate kids to the best level in Thailand?..........Did you ever visit a National Park or the Royal Palace in Thailand? Greed is just in my imagination, right? It did take an age to come up with this, JB, years of experience!

 

 

Edited August 22, 2020 by PatOngo

[elgenon]

On 8/20/2020 at 12:49 PM, 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

Isn't there scale since they export them?

[josephbloggs]

7 hours ago, PatOngo said:

Greed greed greed...there, I feel much better!......But hey, the Thai's are'nt greedy, are they?

Not the ones I know, not at all.  And Toyota is a Japanese company.   Really not sure what the rest of your post is about either, but let's play along.

 

Quote

Did you ever buy new cars in Thailand, JB? 

Yes, several of them over the years.  And just bought one recently in February.  I have bought a couple that were assembled in Thailand, but most were imported.  And all of them cost way more than I would have paid for the same car in the the UK.  This is all down to taxes and I chose to pay them.  Do I wish the taxes were similar to the UK? On this matter yes, absolutely!!  I can't afford the car I actually want (but I could in the UK).  On other matters, no (20% VAT?).  Is it "THAI GREED"?  No - it is an important revenue source for the government, and imagine how many cars would be on the road without those taxes!
 

Quote

Did you ever pay income tax? 

Not sure what income tax has to do with anything, but yes, been paying income tax here for 25 years.  And I pay less than I would in the UK and many other countries.  THAI GREED!!    What's your point?
 

Quote

Did you ever educate kids to the best level in Thailand?

Yes, I send both my kids to international school.  And yes I pay for it, so what?  They could have a free Thai education.  Private schools in the UK are expensive too.  Your point?  Private schools charging money is THAI GREED??
 

Quote

Did you ever visit a National Park or the Royal Palace in Thailand? 

Yes.  Used to be able to get in for the Thai price using my driving license, but not any more.  Do I like the dual pricing?  No, not really.  Does it bother me?  Not really, it's not a big deal to me and certainly not worth getting worked up about.  If I want to go, I pay.  If I don't think it's worth it, I won't.  Does it make me all angry and bitter?  Nope.

 

Quote

Greed is just in my imagination, right? It did take an age to come up with this, JB, years of experience!

Mostly it is, yes.  You see greed where I see taxes.  And you let yourself become so consumed by it that it affects your perception of everything - just like the people who see scams everywhere where they don't exist.  

[PatOngo]

9 minutes ago, josephbloggs said:

Not the ones I know, not at all.  And Toyota is a Japanese company.   Really not sure what the rest of your post is about either, but let's play along.

As they say JB, opinions are like buttholes, we all have one, I can respect your opinion!

 

 

Edited August 23, 2020 by PatOngo

[Youlike]

On 8/20/2020 at 6:19 PM, Banana7 said:

Why are Thai built cars so expensive?

 

Thailand has a different tax-system...most people don't pay any tax by the way.

When you're that rich that you can buy a car the taxman comes by and puts it on the new price of said car...that way it's impossible for the thai to evade tax and it won't hurt the poorer people.

[ujayujay]

All Carprices in Thailand includes Eco Taxes. For your Corolla it is +20%. So calculate again????

[bkk6060]

A Camry seems like a total rip here.  And many people in the US especially California lease cars.  You can lease a new Camry now including tax for around $250 a month.  Buy a Camry for 750,000 b.

A Lexus loaded lease for around $400.

Lots of people driving around in nice cars but they never really own them.

 

 

[DavisH]

On 8/22/2020 at 3:09 PM, Thomas J said:

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 

Adjust for resale and servicing costs after 10 years and I bet the difference shrinks to nothing. 

[DavisH]

On 8/22/2020 at 5:42 PM, Ireland32 said:

I just purchased Rocco for 1.2 it’s got fromt and side 

Even a honda city now has front and side airbags, and several other small cars have the same. 

[HauptmannUK]

5 hours ago, DavisH said:

Even a honda city now has front and side airbags, and several other small cars have the same. 

True that they are getting better but they are still mean with the safety kit in Thailand. In the UK all small cars have electronic stability control since 2014 and almost all have 6+ airbags.  Even the new Thai-market City has only four airbags as standard.  The Suzuki Ciaz has no stability control and only two airbags. Given the lethal nature of Thai roads its disappointing.

[shy coconut]

As has been stated earlier, local taxes will inflate the price.

 

Cigarettes are 3 times more expensive in the UK as the government

choose to tax them at a far higher rate than Thailand.

 

[dimitriv]

6 hours ago, HauptmannUK said:

Given the lethal nature of Thai roads its disappointing.

 

There is nothing wrong with Thai roads, unless you drive a motorcycle. 

 

 

[TigerandDog]

Not just Toyotas. All the small eco cars that are manufactured here and exported to Australia ( Nissan March, Suzuki Swift etc ) and manufactured to Australian road safety standards are actually between AUD $3000.00 - AUD $5,000.00 dollars cheaper in Australia than the same model cars here in Thailand which are not up to the same road safety standards ( e.g. in Thailand only top of the range models have front windscreen demisters. Thai road standards do not require this, even though it's an absolute necessity in the north during wet season and the colder months Nov -  Dec ).

[Pattaya Spotter]

You think cars are expensive in Thailand...good thing you don't live in Australia.