160,000 'First Car' cancellations

[webfact]

160,000 'First Cars' cancellations

BANGKOK: -- The ′First Car′ tax reduction scheme imposed by the government of Prime Minister Yingluck Shinawatra has resulted in at least 160,000 order cancellations, according to Mr. Surapong Paisithpattanapong, Vice President and Spokesperson of the Automotive Industry Club.

Mr. Surapong said the orders had been made during the height of the government′s scheme, which slashed taxes for individuals who were buying their first cars in order to boost the auto-mobile industry.

However, many people eventually cancelled the orders due to their inability to pay for the cars. Some of them also stated that their loan agreements with the bank were rejected as they lack the credibility.

So far, 1.08 million orders were completed, as the same numbers of cars were transferred to the buyers.

The Automotive Industry Club Vice President advised that auto companies must rearrange their marketing plans and reduce their productivities, as the acceleration of the domestic consumption during the first car scheme had distorted market demands, and caused 100,000 cars to be overproduced.

Moreover, according to Mr. Surapong, investors should also focus more on exports and promotions to increase sales, for instance, to apply 0% interests for 4 years installment-buying.

Source: http://www.khaosod.co.th/en/view_newsonline.php?newsid=TVRNM09UZzJNalE1Tnc9PQ==

-- KHAOSOD English 2013-09-23

[dcutman]

I wonder how many of these people that did drive these cars home, will lose that home to the bank when they no longer can afford to pay the loan.

How many friends/relatives will be in the same trouble because they co-signed for the loan?

[Thai at Heart]

I wonder how many of these people that did drive these cars home, will lose that home to the bank when they no longer can afford to pay the loan.

How many friends/relatives will be in the same trouble because they co-signed for the loan?

I think they would just take the car before they start chasing people for houses.

[boomerangutang]

Another bad plan by the Shinawatre gov't - gone more rotten.

[noitom]

I wonder how many of these people that did drive these cars home, will lose that home to the bank when they no longer can afford to pay the loan.

How many friends/relatives will be in the same trouble because they co-signed for the loan?

Lots of people will be getting hit up for loans by various Thai family members.

[Swiss1960]

Another bad plan by the Shinawatre gov't - gone more rotten.

I would not call the plan neither rotten or bad... 1 million seems a pretty good number of new sales which otherwise would not bave been realized for the car industry in only one year...

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[NongKhaiKid]

Another bad plan by the Shinawatre gov't - gone more rotten.

Yes, another failed populist plan.

Did the government really not think that this would encourage people to get into even more debt than they couldn't handle ? I have to think they knew the potential but just didn't care as long as they got favourable publicity.

Mind you i have to say that the public can be their own worst enemies and many jump into these easy loans schemes without ever considering there will be a monthly day of reckoning when the re-payments are due. The usual Thai trait of not thinking things through.

[lujanit]

Every cloud has a silver lining and this one is that there are 160,000 cars not on the overcrowded roads.

Edited September 23, 2013 by lujanit

[NeverSure]

Yes, a bad plan. I know a teacher with a master's degree in Isaan who bought a new house on the no-down new house scheme, and a new pickup on that scheme, and some furniture on a credit card. She also has a smartphone and can barely afford to eat. Her salary is 30k pm.

She has no clue what her interest rates are, or how long it will take her to pay off her debt.

[kurnell]

I learned very early on not to loan Thai friends or colleagues any money as it never comes back. No difference with this stupid scheme.

[dcutman]

I wonder how many of these people that did drive these cars home, will lose that home to the bank when they no longer can afford to pay the loan.

How many friends/relatives will be in the same trouble because they co-signed for the loan?

I think they would just take the car before they start chasing people for houses.

Not when the car/truck no longer has the value equal to the loan.

I got a little experience on this subject last year when I found out my wife and her mother cosigned a car loan 5 years ago. The banks here have all the laws on their side and they get aggressive.

[Thai at Heart]

I wonder how many of these people that did drive these cars home, will lose that home to the bank when they no longer can afford to pay the loan.

How many friends/relatives will be in the same trouble because they co-signed for the loan?

I think they would just take the car before they start chasing people for houses.

Not when the car/truck no longer has the value equal to the loan.

I got a little experience on this subject last year when I found out my wife and her mother cosigned a car loan 5 years ago. The banks here have all the laws on their side and they get aggressive.

That can happen but it's not that common with new cars.

[1weatherman]

"their loan agreements with the bank were rejected as they lack the credibility". Not trustworthy or not having good credit? Both me thinks.

[Tatsujin]

Another bad plan by the Shinawatre gov't - gone more rotten.

I would not call the plan neither rotten or bad... 1 million seems a pretty good number of new sales which otherwise would not bave been realized for the car industry in only one year...

Yes, great, 1,000,000 more cars on the road, many of which are in an already overcrowded city, paid for by loans that people can't afford to pay back. Same goes with the housing rebate (or whatever they called it). Short-sighted would be an understatement for those policies and their effects.

[monkey4u]

Another bad plan by the Shinawatre gov't - gone more rotten.

I would not call the plan neither rotten or bad... 1 million seems a pretty good number of new sales which otherwise would not bave been realized for the car industry in only one year...

Sent from my HTC One XL using Thaivisa Connect Thailand mobile app

This incentive plan was flawed from the start,

Many who applied and got their loan are now desperate to get out of the debt.

Now lets wait and see what happens with the government trying to repay 2 tn

[johnlandy]

I wonder how many of these people that did drive these cars home, will lose that home to the bank when they no longer can afford to pay the loan.

How many friends/relatives will be in the same trouble because they co-signed for the loan?

It was an ill conceived "stupid idea" from the get go.

But little different from almost everything that is dreamt up by what passes for the Thai Government. Purely TIT

Edited September 23, 2013 by johnlandy

[bigbamboo]

Yes, a bad plan. I know a teacher with a master's degree in Isaan who bought a new house on the no-down new house scheme, and a new pickup on that scheme, and some furniture on a credit card. She also has a smartphone and can barely afford to eat. Her salary is 30k pm.

She has no clue what her interest rates are, or how long it will take her to pay off her debt.

Just like the government with their 2,200,000,000,0000 baht loan,

[Briggsy]

Remember a part of this plan was to boost car sales to "repay" the car manufacturers for the flooding of industrial estates fiasco and the govt. false assurances that it would never happen.

Another big part of the plan was to garner popularity and hence votes for Pheua Thai.

So, one cannot say the scheme did not meet its objectives.

Whether it was good for the country and its fiscal health is debatable.

The cancelled order figure is interesting but without detailed information tells us little. Of much more interest to me, would be the loan default/repossession rate after 2 years compared with the same rate for cars not on the scheme.

[thaimat]

I wonder how many of these people that did drive these cars home, will lose that home to the bank when they no longer can afford to pay the loan.

How many friends/relatives will be in the same trouble because they co-signed for the loan?

Wasn't that the whole point? A land grab....

[Briggsy]

Yes, a bad plan. I know a teacher with a master's degree in Isaan who bought a new house on the no-down new house scheme, and a new pickup on that scheme, and some furniture on a credit card. She also has a smartphone and can barely afford to eat. Her salary is 30k pm.

She has no clue what her interest rates are, or how long it will take her to pay off her debt.

With regards to loans to civil servants and other public sector workers, there is a strong belief that amongst them that either the govt. will not pursue the repayment if the govt or govt bank is the creditor or that the private bank will baulk at repossessing cars or houses of public sector employees.

The 0% loan is seen as a gift from the govt disguised as a loan. That is why your friend took out these loans. Like virtually everything else in Thailand, it is not what it looks like on face value. Your friend is not interested in interest rates or repayment dates as she doesn't feel it is a real debt.

So what on face value looks like a bad plan may be a very good plan. The car scheme, on the other hand, is a different kettle of fish. These loans will be repaid, one way or another.

Welcome to Thailand, the land of smoke and mirrors.

[ezzra]

'So far, 1.08 million orders were completed, as the same numbers of cars were

transferred to the buyers.' Do I understand it correctly that in the last few months million

since the motor show, 1.08 cars have been handed over to the buyers? that quick?

how da hel did they produced delivered 1.08 cars in such short time?

[givenall]

Another bad plan by the Shinawatre gov't - gone more rotten.

Can't pretend economy is great when there are no real bases to support. Some one eventually has to pay for all these fruitless expenditure. The one that can effort the least have t carry the burden, with taxes or inflation.

It is time to be very cautious and conservative when come to spending in Thailand

[wgdanson]

My GF & I just got BHt 91000 back for a Vigo bought last year. Thank you Yingluck.

[Issangeorge]

Remember a part of this plan was to boost car sales to "repay" the car manufacturers for the flooding of industrial estates fiasco and the govt. false assurances that it would never happen.

I don't think so. The car loan plan was part of the PTP's election platform, in June 2011, a long time before the floods came. At the time the car industry was doing quite well and didn't need any stimulus from the government.

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[Matthew2027]

We bought a new Honda April 2012, STILL waiting for 63,000thb rebate to be paid. EXCUSE after EXCUSE, visits to Sri Racha Office ..next month, next month... Has anyone here received their REBATE, & if YEs, how long did it take to process??

Thanks

Edited September 23, 2013 by metisdead
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[Lancelot]

Remember a part of this plan was to boost car sales to "repay" the car manufacturers for the flooding of industrial estates fiasco and the govt. false assurances that it would never happen.

Another big part of the plan was to garner popularity and hence votes for Pheua Thai.

So, one cannot say the scheme did not meet its objectives.

Whether it was good for the country and its fiscal health is debatable.

The cancelled order figure is interesting but without detailed information tells us little. Of much more interest to me, would be the loan default/repossession rate after 2 years compared with the same rate for cars not on the scheme.

It also stimulates Thailand's domestic economy; therefore, less reliance on exports.

Unfortunately, the party is highly leveraged and unsustainable.

I would think there would be some deals on repossessed cars

[Yunla]

"Whenever one tries to rise above Nature, one falls below it." [sherlock Holmes]

Or to put it another way, you have to walk before you can run. Thailand needs heavy infrastructure investment, including public transport and highways, not more luxury cars. Trains, busses, bikepaths, safer roads, driving-standards regulation etc. and thats just transport, then theres schools that need fixing up, and so on. The car market here needs overhauling too, theres no reason to buy expensive new cars that put your grandchildren in the poorhouse at the same time. With enough regulation and monitoring of the marketplace, second hand cars can manage perfectly well for many years use (my brother bought a 2nd hand car in the early 1990s for a very low price, and is still driving it to work today), without bankrupting somebody who buys what is basically a mode of transport from A to B, which they can't afford. Unrealistic aspirations, which are actually encouraged, instead of realistic goals. Yingluck is in the dream-selling business, but in fact dreams are intangible and you always wake up the next day wondering what happened to you.

Edited September 23, 2013 by Yunla

[LUSHGOAT]

Why do they see fit to blame Yingluck for the problem she only reduced the tax I don't think she put a gun to anyone's head and told them they have to buy a car or piuckup, as most of you know Thai people have been getting themselves into debt long and ever ago and I suppose its Yingluck's fault they spend all day playing cards and gambling too

[phitsanulokjohn]

Borrow borrow borrow.The Thai's have obviously not heeded the painful lessons in recent years of the west.The country will soon come down like a pack of cards,but in the meantime i can hear my Thai friends singing ''I owe,I owe it's off to work i go''.

[Yunla]

Why do they see fit to blame Yingluck for the problem she only reduced the tax I don't think she put a gun to anyone's head and told them they have to buy a car or piuckup, as most of you know Thai people have been getting themselves into debt long and ever ago and I suppose its Yingluck's fault they spend all day playing cards and gambling too

I agree on the debt problem pre-Yingluck, but her policy on this was like bringing children to a sweetshop even though they can't afford the sweets they sure want them and don't care what the consequences are. Governments, including proxy dictatorships, have a responsibility to protect its citizens not just from enemies external and internal, but to protect citizens from themselves. That is why sound policy-making, and the cross-party open debates on all topics, decides not just short term actions but the fate of nations. And like has been said earlier here, this was an eyecandy populist gimmick, same as the computer tablets. The actual repercussions were either never considered, or simply not cared about. Its the sugar-frosting and marzipan ontop of the proverbial dungheap. When Yingluck came into power, there was a long list of pressing hard-infrastructure work that required her immediate policy-making and investment. New cars for people who can't afford them, was not on the actual to-do list at all. That policy list by the way, is still entirely unfulfilled.