Thai car sales plunge; luxury market hit amid economic woes

[webfact]

 

Mercedes-Benz (Thailand) reports a significant decrease in domestic car sales, affecting even the typically robust premium car sector. The struggling Thai economy and banks’ stricter auto lending policies due to high household debt, are impacting car manufacturers across all sectors. This includes the luxury market, which generally leverages higher purchasing power.

 

 

“The automotive industry has been hard hit by this year’s economic slowdown, making it challenging for manufacturers to boost sales. This includes both general passenger and luxury cars,” says Martin Schwenk, President and CEO of Mercedes-Benz (Thailand).

 

Schwenk predicts that total car sales in Thailand will fail to reach the 750,000-800,000 units target in 2024. Compared to last year, which saw domestic car sales hitting 775,780 units (an 8.6% year-on-year fall), according to the Federation of Thai Industries (FTI).

 

“The industry is immersed in fierce competition and under immense pressure, making it hard to project Mercedes-Benz’s sales volume for 2024,” adds Schwenk.

In 2022, there were 13,118 Mercedes-Benz cars registered; the total luxury car sector’s sales hitting 43,553 units.

 

However, according to the FTI, domestic car sales in April this year plummeted by 21.5% year-on-year to 46,738 units, primarily due to delayed government spending, stricter bank lending criteria for car loans, and weaker buying power.

Between January and April, car sales saw a steep drop by 23.9% year-on-year to 210,494 units.

 

Despite the general drop in car sales, Mercedes-Benz Thailand identifies a silver lining in the growing electric vehicle (EV) industry, which is witnessing government support. Most recently, the company renewed a decade-long contract with Thonburi Automotive Assembly Plant Ltd, its longstanding partner in car assembly and battery production.

 

“We are entering a new era as the first premium car brand to produce batteries and assemble EVs. We will start with the EQS 500 4MATIC AMG Premium,” declares Schwenk.

 

The Samut Prakan-based assembly plant has manufactured over thirteen models of Mercedes-Benz automobiles, including A-Class, C-Class, E-Class, and S-Class vehicles.

 

Schwenk shows no worry over the entry of Chinese EV manufacturers into Thailand, pointing out that they target different market segments.

 

Globally, Mercedes-Benz focuses on producing plug-in hybrid EVs, outlining plans to phase out internal combustion engine-powered cars by 2025.

 

by George Anderssen
PHOTO: The Mercedes-Benz Model EQS

 

Source: The Thaiger 2024-06-08

 

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[spidermike007]

Never forget, the nation endured 9 long years of the Prayuth Decimation. The economy will feel the effects of their policies for years to come. 

 

Never, ever allow an army to rule the nation. 

[lordgrinz]

7 minutes ago, spidermike007 said:

Never forget, the nation endured 9 long years of the Prayuth Decimation. The economy will feel the effects of their policies for years to come. 

 

Never, ever allow an army to rule the nation. 

Or the army's bootlickers, Pheu Thai. 

[hotchilli]

The middle class was hit hard, they were the one's buying most things.

 

[decca60]

And taxing long term  residents will surely help the recovery........

[Almer]

12 minutes ago, decca60 said:

And taxing long term  residents will surely help the recovery........

Any tax I have to pay like others will be less doesn't in the community

[soalbundy]

2 hours ago, spidermike007 said:

Never forget, the nation endured 9 long years of the Prayuth Decimation. The economy will feel the effects of their policies for years to come. 

 

Never, ever allow an army to rule the nation. 

Falling car sales is a universal problem, everyone is getting squeezed, in the US they are almost giving 2nd hand cars away but still cant find customers.

[Keep Right]

There is little incentive to buy a luxury car now as many manufactures are going the way of EVs. How boring.

[Srikcir]

5 hours ago, webfact said:

This includes both general passenger and luxury cars

And within such categories include EV's.

Goodbye Thailand to the Hub of EV's.

Meanwhile Vietnam remains focused on EVs for sustainable growth

https://vir.com.vn/

 

[Ben Zioner]

33 minutes ago, soalbundy said:

Falling car sales is a universal problem, everyone is getting squeezed, in the US they are almost giving 2nd hand cars away but still cant find customers.

Completely, buying a new car will be the first item cancelled  by anyone threatened by the new tax rules. Holidays will be shrunk too..

Edited June 8 by Ben Zioner

[Eloquent pilgrim]

9 minutes ago, Ben Zioner said:

Completely, buying a new car will be the first item cancelled  by anyone threatened by the new tax rules.

 

Absolutely; my Mazda CX3 is now 4 years old, and I am ready to replace it with a Mazda 3 or maybe a CX5, but I am not transferring £20 odd k from the UK until I know that the Damocles sword hanging over it of having to pay tax on it, has been well and truly removed. Gonna keep the funds in an easy access account in the UK @ 4.8%

 

…. this is something that the car industry in Thailand should be having a serious conversation with the government about; especially as so many foreigners buy new cars rather than risk the second hand market.

 

 

 

[Ben Zioner]

1 hour ago, Eloquent pilgrim said:

 

Absolutely; my Mazda CX3 is now 4 years old, and I am ready to replace it with a Mazda 3 or maybe a CX5, but I am not transferring £20 odd k from the UK until I know that the Damocles sword hanging over it of having to pay tax on it, has been well and truly removed. Gonna keep the funds in an easy access account in the UK @ 4.8%

 

…. this is something that the car industry in Thailand should be having a serious conversation with the government about; especially as so many foreigners buy new cars rather than risk the second hand market.

 

 

 

Yes, the worst hit will be the local economy of Isaan. I have been a fairly reckless big spender, if they tax me it will be for about 800k a year. So I'll keep doing the things I like, but differently of course. But local business will lose that amount, so that's 2 or 3 jobs. Repeat by a few thousands, possibly tens of thousands. I hope people will see who to blame, but I am pessimistic.

Edited June 8 by Ben Zioner

[spidermike007]

1 hour ago, soalbundy said:

Falling car sales is a universal problem, everyone is getting squeezed, in the US they are almost giving 2nd hand cars away but still cant find customers.

That is just patently untrue, a friend of mine is a car broker, and he did say that luxury cars are hard to resell, but that virtually anything he gets under $15,000 sells within a week or two. 

[MeePeeMai]

We are heading into a worldwide recession/depression it would seem.  All economies are now, or will soon be on the downhill slide.

Edited June 8 by MeePeeMai

[soalbundy]

1 minute ago, spidermike007 said:

That is just patently untrue, a friend of mine is a car broker, and he did say that luxury cars are hard to resell, but that virtually anything he gets under $15,000 sells within a week or two. 

I can only relate what I saw on youtube, a man who bought 2nd hand cars at auctions to sell on to 2nd hand dealers, he said, and showed cars, he bought at absolutely cut price but he had trouble selling them on because the dealers couldn't find customers. The cars at auction were from people who couldn't keep up with the payments but the bank didn't want to take possession as the price they would get was to small for the trouble. Some of the cars looked really good and he bought them for like $4,000

[Chongalulu]

The mercedes guy is delusional. Chinese cars are going to decimate European manufacturers. Why else does he think USA are about to put a 100% tariff on Chinese cars and the EU considering increasing theirs too. Thailand won't do it so he's even more exposed. China isn't just going to produce cheap and cheerful only.

[fvw53]

4 hours ago, spidermike007 said:

Never forget, the nation endured 9 long years of the Prayuth Decimation. The economy will feel the effects of their policies for years to come. 

 

Never, ever allow an army to rule the nation. 

It seems we need to expand to "economy" what former French president General de Gaulle said about the contribution of "military justice" to French "justice" ....the same as the contribution of "military music" to French "music"

[BangkokReady]

5 hours ago, spidermike007 said:

Never forget, the nation endured 9 long years of the Prayuth Decimation. The economy will feel the effects of their policies for years to come. 

 

Never, ever allow an army to rule the nation. 

 

Things seem to be getting worse, not better, though.

[trainman34014]

New and Used Cars in Thailand are way overpriced and always have been.  This article seems to point to Rich people who can afford a Mercedes needing credit to buy one; doesn't make too much sense to me.

[The Theory]

4 hours ago, soalbundy said:

Some of the cars looked really good and he bought them for like $4,000

But he won't sell them easy, because he priced them too high for a big $$$.
Keep them for ever. 
 

 

Edited June 8 by The Theory

[mommysboy]

3 hours ago, BangkokReady said:

 

Things seem to be getting worse, not better, though.

 

The repercussions of poor economic management are felt years and decades later. Thailand is experiencing the effects of low investment over the past decade, and will continue to do so for a long time yet.

 

Armies don't grow economies.

[BangkokReady]

5 minutes ago, mommysboy said:

The repercussions of poor economic management are felt years and decades later. Thailand is experiencing the effects of low investment over the past decade, and will continue to do so for a long time yet.

 

Can you explain a little, please?  Thai GDP has apparently been going up steadily with no real change during the coups.  The only noticeable blips have been the 90s financial crisis and covid.  GDP actually started to go down before the last coup, then up again afterwards up until covid.

[Celsius]

1 hour ago, trainman34014 said:

New and Used Cars in Thailand are way overpriced and always have been.  This article seems to point to Rich people who can afford a Mercedes needing credit to buy one; doesn't make too much sense to me.

 

Rich people don't buy a Merc. My comdo building is full of BMW and Benz cars and most people are middle class.

[spidermike007]

15 hours ago, Chongalulu said:

The mercedes guy is delusional. Chinese cars are going to decimate European manufacturers. Why else does he think USA are about to put a 100% tariff on Chinese cars and the EU considering increasing theirs too. Thailand won't do it so he's even more exposed. China isn't just going to produce cheap and cheerful only.

The exact description of an MG. Recently rented one on a vacation, and was struck by how cheap and unadorned the vehicle felt. 

[lordgrinz]

14 minutes ago, spidermike007 said:

The exact description of an MG. Recently rented one on a vacation, and was struck by how cheap and unadorned the vehicle felt. 

 

I am happy with my MG ZS, at 730,000 baht I'm also not losing any sleep over my purchase. It would be twice that for a Mazda CX-5. 

[JBChiangRai]

24 minutes ago, spidermike007 said:

The exact description of an MG. Recently rented one on a vacation, and was struck by how cheap and unadorned the vehicle felt. 

 

It helps if you say which model

[Moonlover]

18 hours ago, MeePeeMai said:

We are heading into a worldwide recession/depression it would seem.  All economies are now, or will soon be on the downhill slide.

True and I blame the Covid crisis and it's going take a long time to recover.

[rickudon]

In Udon Thani, seeing an explosion of Chinese EVs. When i go to pick up my daughter from school, at a back gate where only about 40 cars go, i see 2 or 3 EVs every time; all the cheaper ones around 500,000-700,000 baht. A year ago, none.

[KhunLA]

18 minutes ago, rickudon said:

In Udon Thani, seeing an explosion of Chinese EVs. When i go to pick up my daughter from school, at a back gate where only about 40 cars go, i see 2 or 3 EVs every time; all the cheaper ones around 500,000-700,000 baht. A year ago, none.

Smart people, and hard to beat for knocking around town, or even O&A.    Especially considering the made in TH, entry level ICEV aren't really that inexpensive any more.   Starting at 600k, and topping out at 799k, except for the Nissan March.   

 

Suzuki is throwing in the towel, so scratch their Celerio, Swift, and couldn't even sell many Ciaz at a silly discounted price.

 

Neta V @ 550k, usually on sale for 500k.   MG4 @ 699k, and EP a bit more @ 771k.   Low operating & maintenance cost, and simply plugging in at home.  No more Q'ing up at petrol station.

 

Haven't paid attention, but think some BYDs are in the 700k range.  Gem just picked up the Atto 3, and really liking it.

 

I'm actually surprised how many I see down here, for  small town, and not the weekenders.  Local folks, and full make/mode range, Tesla, Neta, MGs, & BYDs.  An Ora Good Cat occasionally.  Even a Fomm One, and just down the road from us.

 

So far, just the MG dealer here.  Have another at Hua Hin, along with BYD & GWM.

 

 

Edited June 9 by KhunLA

[daveAustin]

Locals worried about impending tax issues and bunging too much money around?

People will go for the plastic battery things but you'll always have the flash Merc buyers despite the excessive tax on luxury motors... suppose that makes them even more appealing for the 'look at me' crowd.