New Car Prices And The Current World Economic Crisis

[thaieagle67]

I was recently in the local Mazda showroom looking at the Mazda 3, when i happened to see the brochure for the MX-5. I asked the salesman what was the current price and he was over the moon to tell me that the price will remain the same this year even though exchange rates against the Japanese Yen haven't been good, a quote i saw repeated on their web site!

When I laughed the salesman was most upset until i explained that MX-5's in their most kitted out form will not sell for more than 20 grand in the UK, let alone mainland Europe and the USA. He was shocked once he calculated that Thailand prices and exhange rates pump this up to the equivalent of almost 50 grand (2,549,000.00 Baht at 51 to the GBP), complete madness. He wasn't so keen to talk about a sale after that!

When, with all the current economic problems, will Thailand drop these taxation rates, as they seem to be doing with the larger engine motorbikes that are coming on the market?

[Dave the Dude]

Dream on!

Far to logical for Thailand

It has about as much chance of happening as getting a Police force not funded by 'Tea money'

Dave

[stingray]

First of all: We are not in the UK! Second: They protect theis own market overhere. They want peaple buying cars made in Thailand. Who would buy a car made in Thailand if they would allowed to import cars taxfree? Use common senses. This would heart the local carindustry dramaticly, jobs get lost, etc.

[Grant]

Who would buy a car made in Thailand if they would allowed to import cars taxfree?

Nobody and in short time we'll see a lot of japanise second hand overhere

[thaieagle67]

First of all: We are not in the UK! Second: They protect theis own market overhere. They want peaple buying cars made in Thailand. Who would buy a car made in Thailand if they would allowed to import cars taxfree? Use common senses. This would heart the local carindustry dramaticly, jobs get lost, etc.

I think you have missed my point! I realise we are not in the UK , as i have lived in LOS for over 14 years (the reason I have no common sense!). My point is, why can't the vehicles imported into Thailand be a bit more sensibly priced by reducing the amount of import tax, not cutting it completely. I appreciate that jobs must be protected but why should everyone (Thais included) have to pay 2, 3 or even (in some extreme cases) 4 times over the prices seen in most other parts of the world.

As i mentioned, the price of large capacity motorbikes have come down and with a Green book, so why not a bit of a re-think about cars, as the roads are boring enough as it is with the Japenes only monoply (although i personally like the japanese produced vehicles).

[trogers]

First of all: We are not in the UK! Second: They protect theis own market overhere. They want peaple buying cars made in Thailand. Who would buy a car made in Thailand if they would allowed to import cars taxfree? Use common senses. This would heart the local carindustry dramaticly, jobs get lost, etc.

Using high import taxes to protect jobs will lead to complacency in the long run. That is why there is almost no innovation technology in Thailand, just plain assembly and copycats. Producers will just price their locally assembled mundane products a little lower than it will cost to import one plus high taxes.

I have been here almost 23 years and am still waiting for the first bottle of locally made peanut butter.

[rixalex]

It always used to disgust me but in some ways i've comes to terms with it now. OK, so yes imported cars may well be ridiculously priced, but then if you can afford one at least you can rest a little easier knowing that it's value won't plummet like a stone as in the UK. Swings in roundabouts.

[rixalex]

I have been here almost 23 years and am still waiting for the first bottle of locally made peanut butter.

You are a patient man, i'll give you that!

(P.S. Doesn't it usually come in a jar?)

[Pdaz]

Yep you could hardly call the car industry here 'Thai' This is just a cheap third World assembly area for Japanese, American and Euro car manufacturers. There is very little choice in the market even amongst what is made here anyhow.. Pick-up, 4 door hatch or compact saloon.. Doesn't matter if you pick Isuzu, Toyota, Honda or Nissan.. Pretty much all the products look/cost the same.. Making a Porsche, Audi or Mini Cooper four times the price doesn't really protect anything to my mind.. It just stymies choice and offers little for Thai's to aspire to.. I don't know but I'm guess much of the car/truck production here is for export anyhow. Not to mention the best value car available in Thailand now is the Proton from Malaysia.. Might not be everyone's cup of tea but for around 500,000 Baht it's great value..

[trogers]

I have been here almost 23 years and am still waiting for the first bottle of locally made peanut butter.

You are a patient man, i'll give you that!

(P.S. Doesn't it usually come in a jar?)

I am expecting a bottle given the depth of local innovation.

[think_too_mut]

Who would buy a car made in Thailand if they would allowed to import cars taxfree?

Nobody and in short time we'll see a lot of japanise second hand overhere

That will never happen.

Thailand makes 1.2 mil vehicls a year, why would they let (like some unfortunate and ridiculous places like New Zealand an Russia) any imports of JP second hand cars?

[Hog Head]

I too have been wondering about a MX-5. My Mazda is made in the Phillipines, and is the MX-5 the same?

If so then ASEAN duty rates apply and no justification for the local rip off price

[think_too_mut]

First of all: We are not in the UK! Second: They protect theis own market overhere. They want peaple buying cars made in Thailand. Who would buy a car made in Thailand if they would allowed to import cars taxfree? Use common senses. This would heart the local carindustry dramaticly, jobs get lost, etc.

Using high import taxes to protect jobs will lead to complacency in the long run. That is why there is almost no innovation technology in Thailand, just plain assembly and copycats. Producers will just price their locally assembled mundane products a little lower than it will cost to import one plus high taxes.

I have been here almost 23 years and am still waiting for the first bottle of locally made peanut butter.

23 years and you have not understood what Thailand represents in the global car market?

8000B jobs, everything is initiated, conducted and managed by Japan, Korea (GM, Ford from the US, one of rare successfull outfits of theirs).

[madjbs]

In this time of global recession, why on earth would the government want to encourage the purchase of high value imported goods?

That is exactly what we DON'T need right now!

[trogers]

Here is an article that is very appropriate to Thailand:

BRAIN POWER SURGES IN INDIA

Mar 27, 2008

Needless to say, it is complacency that deprives us of reaching our full potential. Complacency is another name for "comfort zones", where we deceive ourselves with satisfaction that everything is running fine. We convince ourselves that the status quo is the best solution for all our predicaments.

We hesitate to challenge the status quo. In other words, we stop competing. We replace the two most important human values - challenges and competition - with complacency.

Without challenges and competition we either stagnate, or worse, we begin to decay. The fear of competition overshadows all our strategies and policies. As a direct result, we spend all our energy on protection - protecting complacency.

Edited March 8, 2009 by trogers

[rixalex]

I too have been wondering about a MX-5. My Mazda is made in the Phillipines, and is the MX-5 the same?

If so then ASEAN duty rates apply and no justification for the local rip off price

That's a good point and i think we could find more examples of that.

How about the 3 series BM? It's certainly made in Thailand and yet the 325i SE sells for something like 3.6m baht.

There's a certain poster on this forum, Mobi, who has a 320d and will argue the point that with all the extras they put on it, it actually it doesn't work out much more expensive than the European version, but still, why can't they offer a basically trimmed 3 series at a half reasonable price? I would say that something along the lines of 1.5m baht for a basic 3 series would be about in line when you compare what you can get for that money in terms of a Japanese car.

It's my feeling however that BM is fully aware that their customer base is prepared to pay silly prices (in fact in some ways their customer base enjoys the fact that their car costs so much more than Japanese cars as it guarantees more exclusivity), and therefore BM does nothing to make themselves more competitive. They simply don't feel they need to be.

[trogers]

It's my feeling however that BM is fully aware that their customer base is prepared to pay silly prices (in fact in some ways their customer base enjoys the fact that their car costs so much more than Japanese cars as it guarantees more exclusivity), and therefore BM does nothing to make themselves more competitive. They simply don't feel they need to be.

In marketing studies, this is called "market positioning". They rather sell less at higher prices and spend loads advertising in exclusive magazines.

[think_too_mut]

In this time of global recession, why on earth would the government want to encourage the purchase of high value imported goods?

That is exactly what we DON'T need right now!

It is more fundamental than that: who in Thailand pays taxes for jobs under 10K baht? Most of people are under that bar.

Where is the bulk (personal) tax money coming from? From those who can afford cars, among other similar sources.

Small wonder then the cars in Thailand, locally manufactured are at the same price as in Japan.

Thai workers are paid 10% of what their Japanese counterparst get.

4 months of easy savings (if not leftovers) in Japan sees me buying Toyota Witz (Yaris) 1.3L 5 door, cash, full ovnership.

Some in Thai can do that - but they get taxed.

[rixalex]

It's my feeling however that BM is fully aware that their customer base is prepared to pay silly prices (in fact in some ways their customer base enjoys the fact that their car costs so much more than Japanese cars as it guarantees more exclusivity), and therefore BM does nothing to make themselves more competitive. They simply don't feel they need to be.

In marketing studies, this is called "market positioning". They rather sell less at higher prices and spend loads advertising in exclusive magazines.

Indeed. And if i recall correctly, something like about 5 years ago, within the space of a year BM put the price of the 3 series up by in the region of 1m baht as part of a remarketing strategy.

I believe that Nissan have done likewise with the Tiida (to a lesser degree obviously). Feeling that they couldn't win a face-to-face battle with the City and the Vios, they purposefully priced it above these models and tried to market accordingly. To be fair it is a little larger but not by much. Anyway, it's a shame as i feel were it priced competitively it would be a great buy, even taking into account the greater depreciation it suffers.

Nissan did back-track somewhat when they brought out the cheaper saloon model, named something silly like the Felatio, which was all well and good but not much of a looker and it hasn't sold well.

[Oberkommando]

How about the 3 series BM? It's certainly made in Thailand and yet the 325i SE sells for something like 3.6m baht.

No current BMW 3-series models are wholly built in Thailand.

Final assembly happens on certain 3-series Asian model designations in Rayong but only about 40% of parts are locally sourced, hence the high prices still due to import taxes.

It always used to disgust me but in some ways i've comes to terms with it now. OK, so yes imported cars may well be ridiculously priced, but then if you can afford one at least you can rest a little easier knowing that it's value won't plummet like a stone as in the UK. Swings in roundabouts.

Let's come back to that post in 18 months...

[rixalex]

How about the 3 series BM? It's certainly made in Thailand and yet the 325i SE sells for something like 3.6m baht.

No current BMW 3-series models are wholly built in Thailand.

Final assembly happens on certain 3-series Asian model designations in Rayong but only about 40% of parts are locally sourced, hence the high prices still due to import taxes.

Don't see how the fact that certain parts aren't locally sourced has great bearing on the price. Tax on imported parts isn't that high, it's the tax on fully assembled cars that's exhorbitant and that which pushes the price of European cars through the roof.

It always used to disgust me but in some ways i've comes to terms with it now. OK, so yes imported cars may well be ridiculously priced, but then if you can afford one at least you can rest a little easier knowing that it's value won't plummet like a stone as in the UK. Swings in roundabouts.

Let's come back to that post in 18 months...

Why? Are you saying the bottom is going to drop out of the used car market in Thailand?

[Grant]

As I know, to be "made in Thailand" the car should contain not less than 80% parts produced in Thailand

Otherwise it "assembled in Thailand" and here is different taxation for that kind of production.

Edited March 8, 2009 by Grant

[Oberkommando]

Why? Are you saying the bottom is going to drop out of the used car market in Thailand?

The bottom is dropping out already.

Don't see how the fact that certain parts aren't locally sourced has great bearing on the price. Tax on imported parts isn't that high, it's the tax on fully assembled cars that's exhorbitant and that which pushes the price of European cars through the roof.

BMW 3-Series arrive in kit form and are only assembled here with some local parts.

The models that are assembled here are more reasonably priced than the wholly imported models.

Still expensive in comparison to buying the same model in Europe but it is still the tax that is the reason.

BMW have been at the Thai Government for years to reduce the tariffs so they can be more competitive here and in Asean. Still not happened though.

The automobile industry is in serious trouble in Thailand and we haven't even seen the start of it yet.

[rixalex]

The bottom is dropping out already.

If by that you are saying that used car dealers are selling fewer cars, i wouldn't doubt it. But by my definition of the term, for a market to be bottoming out, we'd be seeing some shift in prices. Haven't seen much if any of that yet. Perhaps it will come but for the moment, it hasn't.

The automobile industry is in serious trouble in Thailand and we haven't even seen the start of it yet.

True but ditto for the rest of the world's automobile markets.

[stingray]

The bottom is dropping out already.

If by that you are saying that used car dealers are selling fewer cars, i wouldn't doubt it. But by my definition of the term, for a market to be bottoming out, we'd be seeing some shift in prices. Haven't seen much if any of that yet. Perhaps it will come but for the moment, it hasn't.

The automobile industry is in serious trouble in Thailand and we haven't even seen the start of it yet.

True but ditto for the rest of the world's automobile markets.

No it's not like that. Many Locals who can't pass the finance requirements for a new car 9and this riquirements and downpayments are much higher now than 2 years ago), start looking for a cheap second hand one, but pay thet in cash.

[rixalex]

No it's not like that. Many Locals who can't pass the finance requirements for a new car 9and this riquirements and downpayments are much higher now than 2 years ago), start looking for a cheap second hand one, but pay thet in cash.

So what are you saying? That sales in cheap used cars bought for cash is on the increase, whilst sales in new cars bought on finance goes in the other direction?

[ignis]

First of all: We are not in the UK! Second: They protect theis own market overhere. They want peaple buying cars made in Thailand. Who would buy a car made in Thailand if they would allowed to import cars taxfree? Use common senses. This would heart the local carindustry dramaticly, jobs get lost, etc.

There again if you were in the UK and wanted a American car you would pay double what they cost in the USA........

A Thai pickup in the UK cost a lot more then they do here.........

Even cars build in the UK eg: Honda cost 50% more then they do here + with less kit then here.......

Edited March 10, 2009 by ignis

[dave_boo]

First of all: We are not in the UK! Second: They protect theis own market overhere. They want peaple buying cars made in Thailand. Who would buy a car made in Thailand if they would allowed to import cars taxfree? Use common senses. This would heart the local carindustry dramaticly, jobs get lost, etc.

There again if you were in the UK and wanted a American car you would pay double what they cost in the USA........

A Thai pickup in the UK cost a lot more then they do here.........

Even cars build in the UK eg: Honda cost 50% more then they do here + with less kit then here.......

For some fun info:

Toyota

Toyota Vios - 438 885 to 543 849 THB

Toyota Camry - 688 396 to 1 031 785 (3,5L V6) THB

Toytoa Highlander - 924 274 THB to 1 241 235 THB (closest to Fortuner; most expensive is the 4x4 3,5L)

Toyota Tundra - 808 672 to 1 160 152 THB(closest to the Vigo; cheapest is 2x4 2 door with 4,0L engine, most expensive is the 4x4 4 door which has a 5,7L E85 engine--there is the Tacoma which starts at 545 467 THB and is comprable to the base Vigo model with the exception of having SRS!)

Honda

Honda Fit - 530 365 to 615 224 THB (Honda Jazz)

Honda Accord - 751 680 to 1 033 763 (3,5L V6) THB

All those cars I listed (with the exception of the Tundra/Highlander, which they have an equivalent, and perhaps the Accord) are produced and sold in Thailand. Now as far as I can tell, only the Camry, Tacoma, Tundra, and the Accord. Everything else is an import in the US...

[Plus]

BMW used to cost just over a million baht, they jacked up the taxes on "luxury" products after 1997 crisis. It's about time to bring them back down, but it's not how taxmen work, is it?

The auto industry here is a major success story, something must be right in the way they manage it and so I would be very careful about introducing big changes.

The logic goes something like this;

Thailand guarantees protection for locally made cars (80-90%), it guarantees reasonable sales numbers and auto makers agree to invest. This way Thailand can leverage its tiny local market in a low income country to become one of the biggest world producers. Amount of cars for export guarantees that automakers keep the standards on par with the rest of the world.

Why would they want to break what works perfectly?

[imaneggspurt]

It's my feeling however that BM is fully aware that their customer base is prepared to pay silly prices (in fact in some ways their customer base enjoys the fact that their car costs so much more than Japanese cars as it guarantees more exclusivity), and therefore BM does nothing to make themselves more competitive. They simply don't feel they need to be.

In marketing studies, this is called "market positioning". They rather sell less at higher prices and spend loads advertising in exclusive magazines.

Indeed. And if i recall correctly, something like about 5 years ago, within the space of a year BM put the price of the 3 series up by in the region of 1m baht as part of a remarketing strategy.

I believe that Nissan have done likewise with the Tiida (to a lesser degree obviously). Feeling that they couldn't win a face-to-face battle with the City and the Vios, they purposefully priced it above these models and tried to market accordingly. To be fair it is a little larger but not by much. Anyway, it's a shame as i feel were it priced competitively it would be a great buy, even taking into account the greater depreciation it suffers.

Nissan did back-track somewhat when they brought out the cheaper saloon model, named something silly like the Felatio, which was all well and good but not much of a looker and it hasn't sold well.

Nissan Felaito, love it, ..the cunnilingus model was a hit also ! ( by the way arent all nissans here ugly ) whos doing their styling stevie wonder !