Honda Makes Record Sales In Thailand: Flood Recovery

[rubl]

From the 'first year policies':

"1.8.4 Introduce tax measures to reduce the general public's burden of purchasing such essentials as the first house and car."

Nothing more, nothing less

[rixalex]

At the same time, it would enable the Government to earn more from the collection of corporate income tax, value-added tax, and car excise tax.

Enabling the government to earn more from corporate income tax, value-added tax, and car excise tax, is all well and good, but needs to be offset by how much money they have lost in the rebate.

[chiangmaikelly]

I would think political marketing strategy along with increase revenues of tax dollars and foreign investment. I don't see anything wrong with the idea. It worked as shown by the increase in Honda sales.

When you slash the price of cars by 100,000 baht, of course sales are going to go up. Hardly surprising or any great feat really is it? Getting sales up without losing government revenue, that would have been impressive. Or failing that, implementing the system that they did but geared in such a way that the less well off might benefit, would have been good.

The Ministry of Finance stated that the first-car buyer program would enable at least 500,000 low-income earners to have the opportunity to own a car. At the same time, it would enable the Government to earn more from the collection of corporate income tax, value-added tax, and car excise tax.

What part of my explanation about why the people who couldn't afford to buy a car were still unable to buy a car with this programme, are you struggling with?

90,000 first time buyers bought cars. That was the intent of the program to allow people who had not purchased a car before to buy a car. 90,000 did. What part of this do you not understand? No one to my knowledge said they wanted to allow people to buy cars they could not pay for.

[rixalex]

I was responding to your statement, "Getting sales up without losing government revenue, that would have been impressive." I wrote. " At the same time, it would enable the Government to earn more from the collection of corporate income tax, value-added tax, and car excise tax."

No need to flame using words like "are you struggling with?"

It wasn't mean to flame and if that is how it read i apologise. Perhaps i am just getting a bit frustrated. I keep repeating my explanation of why i think the idea was fundamentally flawed, in that it shouldn't have simply been about helping Honda shift more cars, but about doing something of social benefit, and you keep either failing to grasp my point, or you keep ignoring it.

[chiangmaikelly]

I was responding to your statement, "Getting sales up without losing government revenue, that would have been impressive." I wrote. " At the same time, it would enable the Government to earn more from the collection of corporate income tax, value-added tax, and car excise tax."

No need to flame using words like "are you struggling with?"

It wasn't mean to flame and if that is how it read i apologise. Perhaps i am just getting a bit frustrated. I keep repeating my explanation of why i think the idea was fundamentally flawed, in that it shouldn't have simply been about helping Honda shift more cars, but about doing something of social benefit, and you keep either failing to grasp my point, or you keep ignoring it.

I think you are confusing first time buyers who can afford to buy a car but have not with poor people who could not afford to buy a car before the program and who still can't afford to buy a car with the program.

[rixalex]

90,000 first time buyers bought cars. That was the intent of the program to allow people who had not purchased a car before to buy a car. 90,000 did. What part of this do you not understand? No one to my knowledge said they wanted to allow people to buy cars they could not pay for.

First of all, virtually everyone i know of in my area who took advantage of the program were not first time buyers. They simply used the name of a relative.

Secondly, you completely fail to grasp the point i was making. Of course i wasn't saying that they wanted to allow people to buy cars they could not pay for. They wanted to allow people who previously had not been able to buy a car, to become able. However, by devising the system in the way they did, with the rebate coming after one year, and the initial sticker price remaining the same, people who previously could not afford a car, still could not.

[rixalex]

I think you are confusing first time buyers who can afford to buy a car but have not with poor people who could not afford to buy a car before the program and who still can't afford to buy a car with the program.

Why help people who can already afford the purchase? Why not try and help people who couldn't afford it, but with the rebate would be able to?

[chiangmaikelly]

90,000 first time buyers bought cars. That was the intent of the program to allow people who had not purchased a car before to buy a car. 90,000 did. What part of this do you not understand? No one to my knowledge said they wanted to allow people to buy cars they could not pay for.

First of all, virtually everyone i know of in my area who took advantage of the program were not first time buyers. They simply used the name of a relative.

Secondly, you completely fail to grasp the point i was making. Of course i wasn't saying that they wanted to allow people to buy cars they could not pay for. They wanted to allow people who previously had not been able to buy a car, to become able. However, by devising the system in the way they did, with the rebate coming after one year, and the initial sticker price remaining the same, people who previously could not afford a car, still could not.

You said, "had not been able to buy a car." I said, "who had not bought a car." Big difference. Why would people not be able to buy a car? Because they could not make the payments. First time buyers might be motivated to buy a car now with the promise of 100,000 baht in a year.

The way I read the program was to stimulate auto business check that off because it did and two to motivate people who did not have a car to buy one, 90,000 did that too. Seems to me both objectives were accomplished. If you have any factual information that all of the 90,000 were not real first time buyers feel free to post it.

[chiangmaikelly]

I think you are confusing first time buyers who can afford to buy a car but have not with poor people who could not afford to buy a car before the program and who still can't afford to buy a car with the program.

Why help people who can already afford the purchase? Why not try and help people who couldn't afford it, but with the rebate would be able to?

Nice idea but the thread is about Honda's increase in sales and one of the reasons was the first time buyer program along with other reasons. Did the first time buyer program help Honda make record sales in Thailand. Yes it did.

[rubl]

"90,000 first-time vehicle buyers have received tax refunds worth over Bt6 billion."

That's an average of about THB 62,000 per car in taxes refunded. What I'd like to know is the type of cars involved. Also the

"At the same time, it would enable the Government to earn more from the collection of corporate income tax, value-added tax, and car excise tax." seems a bit strange with the Corporate Income tax reduced from 30% to 23% almost immediately in September 2011. The VAT and car excise tax the buyers pays, with CET refunded up to 100,000 after one year.

BTW with all back and forth I'm not sure what the ceiling price of the car is. At first the rebate would only apply to cars up to THB 1m in price.

[rubl]

On September 15th, 2011:

"Cars with engines of 1,500cc or less and a price not exceeding one million baht will be eligible, and dual cab pickups under one million baht, for the deduction. The total refund on a vehicle must not exceed 100,000 baht. Those eligible for the refund can apply for it within one year of the purchase date but are required to retain ownership of the car for at least five years."

[smutcakes]

I think you are confusing first time buyers who can afford to buy a car but have not with poor people who could not afford to buy a car before the program and who still can't afford to buy a car with the program.

Why help people who can already afford the purchase? Why not try and help people who couldn't afford it, but with the rebate would be able to?

Nice idea but the thread is about Honda's increase in sales and one of the reasons was the first time buyer program along with other reasons. Did the first time buyer program help Honda make record sales in Thailand. Yes it did.

CMK, you may be unaware of this, but you are wrong- anything that can be directly or indirectly seen as a positive for either Thailand or from a policy from the Government is wrong and it is BAD and CORRUPT.

[rixalex]

You said, "had not been able to buy a car." I said, "who had not bought a car." Big difference. Why would people not be able to buy a car? Because they could not make the payments. First time buyers might be motivated to buy a car now with the promise of 100,000 baht in a year.

The way I read the program was to stimulate auto business check that off because it did and two to motivate people who did not have a car to buy one, 90,000 did that too. Seems to me both objectives were accomplished. If you have any factual information that all of the 90,000 were not real first time buyers feel free to post it.

I have clearly explained why the system unnecessarily excluded certain people that with better planning could have been included and could have benefited. You either can't grasp it or simply don't care. I give up.

[metisdead]

I do not think this topic is regarding the First TIme Buyers incentive, it is simply about Honda having record sales.

[chiangmaikelly]

You said, "had not been able to buy a car." I said, "who had not bought a car." Big difference. Why would people not be able to buy a car? Because they could not make the payments. First time buyers might be motivated to buy a car now with the promise of 100,000 baht in a year.

The way I read the program was to stimulate auto business check that off because it did and two to motivate people who did not have a car to buy one, 90,000 did that too. Seems to me both objectives were accomplished. If you have any factual information that all of the 90,000 were not real first time buyers feel free to post it.

I have clearly explained why the system unnecessarily excluded certain people that with better planning could have been included and could have benefited. You either can't grasp it or simply don't care. I give up.

Quote from the OP

"Since resuming full production at its Ayutthaya manufacturing plant in April 2012, Japanese auto-maker Honda has made a dashing come-back to achieve record sales in Thailand. Honda, which launched nine new models in the past seven months, sold 21,265 vehicles in October.

However, we were able to resume production rapidly and returned stronger, thanks to our employees' contributions and great support from our customers, business partners and the government."

End of quotes.

Do you disagree with any of the above?

[chiangmaikelly]

On September 15th, 2011:

"Cars with engines of 1,500cc or less and a price not exceeding one million baht will be eligible, and dual cab pickups under one million baht, for the deduction. The total refund on a vehicle must not exceed 100,000 baht. Those eligible for the refund can apply for it within one year of the purchase date but are required to retain ownership of the car for at least five years."

Quote from the OP. "We believe that accumulated sales will exceed our target of 170,000 vehicles by the end of the year, which will be Honda's largest-ever accumulated sales for an entire year."

Do you disagree with any of the above and that it has been a great year for Honda and the Thai Auto industry?

[rixalex]

CMK, you may be unaware of this, but you are wrong- anything that can be directly or indirectly seen as a positive for either Thailand or from a policy from the Government is wrong and it is BAD and CORRUPT.

Actually what i was thinking was for all we hear from government sympathisers about how they actually don't particularly support any Thai politician or party, and about how all politicians are as bad as each other, when an occasion comes along when this government does do something that is very blatantly and plainly wrong, or very blatantly and plainly could have been better (as in this case), they never, even then, seem able to bring themselves to accepting that criticism as valid, but instead come up with a string of excuses, denials or diversions, on behalf of that government that they don't support. Weird.

[chiangmaikelly]

CMK, you may be unaware of this, but you are wrong- anything that can be directly or indirectly seen as a positive for either Thailand or from a policy from the Government is wrong and it is BAD and CORRUPT.

Actually what i was thinking was for all we hear from government sympathisers about how they actually don't particularly support any Thai politician or party, and about how all politicians are as bad as each other, when an occasion comes along when this government does do something that is very blatantly and plainly wrong, or very blatantly and plainly could have been better (as in this case), they never, even then, seem able to bring themselves to accepting that criticism as valid, but instead come up with a string of excuses, denials or diversions, on behalf of that government that they don't support. Weird.

I am struggling to find some link with your above post and the topic, "Honda makes record sales in Thailand."

[smutcakes]

CMK, you may be unaware of this, but you are wrong- anything that can be directly or indirectly seen as a positive for either Thailand or from a policy from the Government is wrong and it is BAD and CORRUPT.

Actually what i was thinking was for all we hear from government sympathisers about how they actually don't particularly support any Thai politician or party, and about how all politicians are as bad as each other, when an occasion comes along when this government does do something that is very blatantly and plainly wrong, or very blatantly and plainly could have been better (as in this case), they never, even then, seem able to bring themselves to accepting that criticism as valid, but instead come up with a string of excuses, denials or diversions, on behalf of that government that they don't support. Weird.

Perhaps you could inform us how it could have been done better?

I cannot speak for others, but i quite openly post that this Government is riddled with corruption and some of their policies are rubbish.

[rixalex]

Quote from the OP

"Since resuming full production at its Ayutthaya manufacturing plant in April 2012, Japanese auto-maker Honda has made a dashing come-back to achieve record sales in Thailand. Honda, which launched nine new models in the past seven months, sold 21,265 vehicles in October.

However, we were able to resume production rapidly and returned stronger, thanks to our employees' contributions and great support from our customers, business partners and the government."

End of quotes.

Do you disagree with any of the above?

No i don't.

[rixalex]

Perhaps you could inform us how it could have been done better?

I have already outlined on this thread my issues with this policy multiple times. Read back if you are interested.

[tig28]

Accurate breakdowns of sales by brand are difficult to obtain in Thailand --- but according to this:

http://bestsellingca...egory/thailand/

There has been huge growth in overall new vehicle sales. If one of the main aims of the Governments stimulus package was to increase new vehicle sales it would appear to have been very successful.

"While we were expecting Indonesia to be the first South East Asian car market to pass the one million annual units by the end of 2012, it is Thailand that toppled that milestone first thanks to explosive growth over the last few months. A record 1,000,577 new cars found a new home in Thailand over the first 9 months of 2012, up a huge 71% year-on-year! Total domestic sales in 2011 were 794,081 units, placing Thailand at #20 in the world’s biggest car markets ranking. In 2012 it should shoot up to #13, passing countries like Spain, Turkey, Mexico, Australia and… regional rival Indonesia.

In September alone, the Thai new car market is up 53% year-on-year to reach 132,874 registrations, an all-time monthly record for the Thai industry. Of the total, 68,282 were passenger cars (+68%) and 64,592 were commercial vehicles (+39%). These huge figures have prompted the Department of Land Transport, faced with a shortage of licence plate numbers, to introduce a new licence plate numbering system, placing a numeral in front of the two Thai alphabet characters – for example, 1กก XXXX. This system is expected to remain in use for the next 157 years"

[Hugo6]

I would think political marketing strategy along with increase revenues of tax dollars and foreign investment. I don't see anything wrong with the idea. It worked as shown by the increase in Honda sales.

When you slash the price of cars by 100,000 baht, of course sales are going to go up. Hardly surprising or any great feat really is it? Getting sales up without losing government revenue, that would have been impressive. Or failing that, implementing the system that they did but geared in such a way that the less well off might benefit, would have been good.

The Ministry of Finance stated that the first-car buyer program would enable at least 500,000 low-income earners to have the opportunity to own a car. At the same time, it would enable the Government to earn more from the collection of corporate income tax, value-added tax, and car excise tax.

What part of my explanation about why the people who couldn't afford to buy a car were still unable to buy a car with this programme, are you struggling with?

i'm still of the opinion that was not the objective. i think the objective was to stimulate demand and (done by) making it easier for people who could afford a car to buy it NOW.

a typical program to influence people's decision making to stimulate the economy. For that it looks like it worked.

i don't think any program to get people to buy what they can't afford is a good idea. witness the world economic crash based at least partly on usa housing bubble ... that was based on deregulation of the financial markets allowing americans to buy houses with 0% down. Combined with the other deregulation of the financial industry, it was an economic time bomb

here we just have some mild economic stimulus for the auto industry.

[rixalex]

i'm still of the opinion that was not the objective. i think the objective was to stimulate demand and (done by) making it easier for people who could afford a car to buy it NOW.

It didn't make it easier for people to buy a car NOW. That's the whole point. It's neither easier nor is it more difficult. For those who can already afford a car, it will make they lives easier one year after they bought it, when they receive the rebate - that is assuming they do of course.

Yes, it did stimulate demand. No question about that. Knocking 100,000 baht, as i have said, off the price of a car, even if not knocked off the sticker price, was always going to increase sales... one doesn't need a financial guru to tell you that. Whether in the long term, the benefit to Honda and other car manufacturers, and the benefit to those people who were able to take advantage of the rebate, will be worth the lost tax revenue and be of benefit to the country as a whole, well we'll have to wait and see for that bigger picture.

i don't think any program to get people to buy what they can't afford is a good idea.

You are making a strawman argument. Nobody has argued that it is a good idea for people to buy things they can't afford. I have argued that if you are going to introduce a tax rebate program like this, do it in such a way that those who couldn't afford a 600k Jazz, but who could afford a 500k Jazz, are able to take advantage, because those are the people who need the help in my opinion. People who could already afford a 600k Jazz, most likely would have bought one anyway, with or without the 100k rebate... perhaps not as quickly as they did, but at some time in the near future.

As i say, had this been the brainchild of the Dems, we would be hearing all about how it was another anti-poor scheme for the middle classes.

[rubl]

Accurate breakdowns of sales by brand are difficult to obtain in Thailand --- but according to this:

http://bestsellingca...egory/thailand/

There has been huge growth in overall new vehicle sales. If one of the main aims of the Governments stimulus package was to increase new vehicle sales it would appear to have been very successful.

"While we were expecting Indonesia to be the first South East Asian car market to pass the one million annual units by the end of 2012, it is Thailand that toppled that milestone first thanks to explosive growth over the last few months. A record 1,000,577 new cars found a new home in Thailand over the first 9 months of 2012, up a huge 71% year-on-year! Total domestic sales in 2011 were 794,081 units, placing Thailand at #20 in the world’s biggest car markets ranking. In 2012 it should shoot up to #13, passing countries like Spain, Turkey, Mexico, Australia and… regional rival Indonesia.

In September alone, the Thai new car market is up 53% year-on-year to reach 132,874 registrations, an all-time monthly record for the Thai industry. Of the total, 68,282 were passenger cars (+68%) and 64,592 were commercial vehicles (+39%). These huge figures have prompted the Department of Land Transport, faced with a shortage of licence plate numbers, to introduce a new licence plate numbering system, placing a numeral in front of the two Thai alphabet characters – for example, 1กก XXXX. This system is expected to remain in use for the next 157 years"

Having been a Bangkok man since 1994 I think only the years 1997 to about 2000 were reasonable traffic wise. The last two years things seem to turn for the worse again.

In the mean time the masterplan for public transportation is progressing nicely. The luncheon boxes for the highspeed train are defined and maybe even stored already

[Dellboy218]

Honda may have record sales but they also seem to have a record number of breakdowns! Our local Honda dealer is full to overflowing and they have had my car now for over a week to replace the air con compressor. It was supposed to be ready today but now it seems it may be another 3 days!

I had intended buying a new Civic next month but after all this hassle I think I shall be going back to Toyota.

Yes,read this:

• 
  

Saturday, November 17th, 2012 | Posted by admin

Toyota recalls 2.7 million vehicles for steering & water pump problems.

At least Toyota own up when there is a problem. There have been at least 2 recalls in the US for my model CRV but try getting those problems fixed in Thailand under warranty.

I had a mkII CRV from new. Honda could not fix the annoying problems it suffered. They had so many people complaining that there main email address refused to work, undeliverable! That was about the time a woman in Bangkok got so fed up with her CRV and Honda not wanting to give her a refund she drove it through their front wall with the tv cameras rolling. That worked, she got an instant refund. Got rid of mine. 5 sets of front shocks later!.........

[tig28]

Having been a Bangkok man since 1994 I think only the years 1997 to about 2000 were reasonable traffic wise. The last two years things seem to turn for the worse again.

In the mean time the masterplan for public transportation is progressing nicely. The luncheon boxes for the highspeed train are defined and maybe even stored already

rubi

I comment not on the overall wisdom of the Governments plan to boost new car sales -- I simply post what I hope are accurate sales numbers. As the OP pointed out Honda sales are up --- but so is the entire market. GM Thailand claims to have increased their production by 37% this year -- to date. As the article pointed out this "boost" to new car sales has been pretty impressive (up 71% -- with 3 months still to go!)

Without doubt the usual suspects shall propose that the the La Nina effect .. or the phases of the moon are the cause of this astounding production boost in the Thai Auto industry....... but that's not really any surprise.

Last year Thai auto exports were valued at just under 800 billion Baht --- it is a pretty important industry to the nation. As a response to the damage of the floods of November last year this kind of financial incentive seems to have extremely successful.

Now rubi ... whilst I sympathize with your traffic problems in the capital I think its worth remembering that around 90% of Thais don't actually live there .... and in the less populated areas of Thailand the "extra" vehicles on the road may be of somewhat reduced impact.

After the devastating flood damage it has certainly helped one of Thailand's most important industries.

[15Peter20]

Saw evidence of high Honda demand today at a car show. Waiting time for Civics - 1-2 months. Waiting time for Citys - 6 months.

[smileplur]

Saw evidence of high Honda demand today at a car show. Waiting time for Civics - 1-2 months. Waiting time for Citys - 6 months.

Really? I reserved a Honda City yesterday. It's scheduled for delivery in early January,

[15Peter20]

Saw evidence of high Honda demand today at a car show. Waiting time for Civics - 1-2 months. Waiting time for Citys - 6 months.

Really? I reserved a Honda City yesterday. It's scheduled for delivery in early January,

This was in Chiang Mai. Congrats on your purchase.