First car deal defaults jump 25 folds: Thai Excise Dept

[SPALAX]

So that means all the populist policies have failed,but some people

made a lot of money out of them, so thats OK?.

regards Worgeordie

1 000 000 cars bought, 500 payment defaults, that's a bit more than 0,00%.

"So that means all the populist policies have failed."

You may be good at politics but certainly not at Math.

[monty1412]

So that means all the populist policies have failed,but some people

made a lot of money out of them, so thats OK?.

regards Worgeordie

Why failed?

Because 500 out of million can not pay the monthly payments?

Incorrect, your assumption is that the million were all on finance, the question is how many people took out finance contracts to take advantage of the first car scheme, once that number is known one can examine how relevant the 500 number is

[frollywolly]

With 12,000 at risk of default!

Give it another 12 mnths and that figure will triple. Cars and repayments that cannot be maintained. A secondhand market that collapses.

You must be Thai. Not looking to the future, just the now.

You must be Thai. Can't divide. Tell us what percent have defaulted? Now tell us what would be a bad percent? What would be a good percent? What would be a normal %.

Are you anti math or something? 500 or 12,000 out of 1.6 million is great. 1% is 10,000

In a big grown up country like USA........

The first mortgage default rate fell from 1.58 percent in January to 1.48 percent in February, while the bank card rate declined from 3.41 percent to 3.37 percent. The second mortgage and auto loan default rates showed margins increases, rising from 0.69 and 1.10 percent in January to 0.71 percent and 1.11 percent, respectively, in February.

Using your own spurious logic. The defaults have increased 25 X in one year! 25 times the number of defaults in one year!! That is a phenomenal amount by any standard. Has the US market EVER seen that increase? Of course not.

12,000 at risk defaults. Most of those will default. Then you have the thousands of at risk defaulters the banks are not reporting. Add to that all the people who are borrowing from family and loan sharks just to make repayments. Forget about servicing or new tyres or maintenance. People will expect the secondhand market to remain at its current bouyant levels, but that will not happen.

50,000 - 100,00 defaulters within 2 years. Guaranteed.

[northernjohn]

To get back to the defaults. The plan itself was a tax rebate, not at all dissimilar to the 'cash for clunkers' programs than ran all over the west to stimulate new car sales.

It was the banks that made the loans, so no matter how much you people desperately want this to be some PT corruption scandal, it's really just a total failure of the banks in their lending practices.

The policy itself may well have been misguided and a waste of money, as I also believe a good deal of the stimulus programs in the US & Europe were, but the defaults lie fairly and squarely on the banks and their poor lending criteria...sub prime mortgage crisis, Greece, Irish, Icelandic, Spanish, British, Portuguese, Cypriot banks,,,shall we go on. Bad loans are hardly unique to Thailand

If I remember correctly it was for first car buyers only.

A lot of the tax rebates have not yet been paid. How many of those waiting have been forced to use loan sharks.

The plan also hurt the sales of new cars this year.

We have 500 defaulted 12,500 with several months of missed payments no telling how many with one month of miss payment and no telling how many more to come along.

Then you add in the pollution the increase in traffic snarls and you come up with a well thought out vote getting scam that does the population no good.

[Nigeone]

Yes my step son and friends all went down this road and the main pressure from family in all cases etc was to get the rebate...It's almost as if they think that once they have paid the first year or so and got the rebate thats all that matters...something for nothing....The poster above is right...I feel young people have been pressured to get a car..they also wanted one too...but the reality is in the second year onwards the BIG problems are going to start...Big reality check coming and yes the second hand market is going to be flooded..

[Bulldozer Dawn]

What a stupid scheme.

- Create a large number of sales to people who couldn't afford cars. Now they have lost their cars and their credit histories are ruined.

- Brought forward many sales which makes the manufacturers and sellers' business slump after that.

- Caused a lot of bad loans to banks and finance companies.

- Caused the second hand car market to go into a slump.

- Caused greater pollution and traffic jams.

- Made the roads more dangerous.

Yingluck should face another criminal case for this.

There should be a class action against Yingluck for negligent manslaughter. Financial issues aside, this ridiculous scheme put over one million people into new high powered vehicles with no proper driver education whatsoever. This scheme played a pivotal role in ensuring that Thailand was the number one hit (with a bullet) on the top ten country list for road fatalities.

[thailiketoo]

Sounds like the path the real estate market is heading towards...lol

Definitely. With every road becoming a canyon, and developers telling customers that an overpriced small apartment in a large block is a condo m, and charging 3 times the worth of it, where is the cash in a declining economy to buy all this goimg to come from?; plus the fone, tablet, etc.

A major crash is coming.

In your dreams; link please.

No dreams, just facts.Unless you can give me the figures otherwise.

I will respect your superior knowledge over any respected economist and financial journalist I've evr read.

That which can be asserted without evidence, can be dismissed without evidence.” – Christopher Hitchens. Do you agree?

[BoardDWorld]

So, 500 defaulting and the rest still learning to drive.

Learning? who said they were doing that? Maintaining their blissful ignorance, I could believe that.

[alanrchase]

Predicted this when first announced. See many young people park their cars from work, take a quick look back whilst holding their 40THB plastic bag dinner as they enter their 3K THB/month room to stay until morning only to repeat drive to a job that pays 12-15KTHB. Trip to Ma's every other month if they have petrol money.

Looks way too much like the west and I feel for them because they've been caught up in the consumer the concept of a great opportunity soon fades with the reality they can't afford something that bites 30-40% off their income each month.

Sad

You could be describing my son. Only he parks "my" car outside his 3000B/M room.

[ginjag]

To get back to the defaults. The plan itself was a tax rebate, not at all dissimilar to the 'cash for clunkers' programs than ran all over the west to stimulate new car sales.

It was the banks that made the loans, so no matter how much you people desperately want this to be some PT corruption scandal, it's really just a total failure of the banks in their lending practices.

The policy itself may well have been misguided and a waste of money, as I also believe a good deal of the stimulus programs in the US & Europe were, but the defaults lie fairly and squarely on the banks and their poor lending criteria...sub prime mortgage crisis, Greece, Irish, Icelandic, Spanish, British, Portuguese, Cypriot banks,,,shall we go on. Bad loans are hardly unique to Thailand

Maybe so-a lot of your post cannot be denied----I can mention where are the rebates people are waiting for ??? not paid ??

Get a car on the cheap in your mother in laws name, and she cannot drive.

You are not a first time buyer ?? as you already own a car.??

Many questions need answering not the obvious ones.

[thailiketoo]

Your pro Shin agenda, has nothing to do with my post Why use mine to answer the main topic-----have you lost your way or is it you have joined the wind up gang.

You wrote, "1 quote the poor-------------------what poor people were able to afford a 500,000 baht car when their house is only worth 50,000."

The answer more than a million poor people who did not default on their loans. 500 out of 1,000,000 is a minuscule, negotiable almost non existent rate of default. Apparently you are 99.99% wrong.

You wrote, "3....quote manufacturers............boost in sales---then---- but all sales are down now due to the selling quickly for the scheme, job losses, go-slow." Increase in sales means more people employed and more money for the economy. Slow down? Link it.

You wrote, "5 quote oil companies...............never loose." If they did they would go out of business. Why would you want them to lose?

The same for insurance companies. They are in business to make money. They employ people. They drive the economic engine. You want them to lose money? Why?

Stupid reply-no comment, just a load of dung-example the "poor" 1 million were NOT poor. get it.

1% default would have been over 10,000 and that would have been good but only 500 defaulted which is great. It was a great idea.

[ginjag]

Your pro Shin agenda, has nothing to do with my post Why use mine to answer the main topic-----have you lost your way or is it you have joined the wind up gang.

You wrote, "1 quote the poor-------------------what poor people were able to afford a 500,000 baht car when their house is only worth 50,000."

The answer more than a million poor people who did not default on their loans. 500 out of 1,000,000 is a minuscule, negotiable almost non existent rate of default. Apparently you are 99.99% wrong.

You wrote, "3....quote manufacturers............boost in sales---then---- but all sales are down now due to the selling quickly for the scheme, job losses, go-slow." Increase in sales means more people employed and more money for the economy. Slow down? Link it.

You wrote, "5 quote oil companies...............never loose." If they did they would go out of business. Why would you want them to lose?

The same for insurance companies. They are in business to make money. They employ people. They drive the economic engine. You want them to lose money? Why?

Stupid reply-no comment, just a load of dung-example the "poor" 1 million were NOT poor. get it.

1% default would have been over 10,000 and that would have been good but only 500 defaulted which is great. It was a great idea.

How many times you want to post this ???? your a minority with this view-the others are PTP supporters.

Do you live in rural village areas ?? how many of these POOR Thais got the cars ???? yours is a propaganda post as it does not answer the POOR Thai buying a car.

Edited August 16, 2014 by ginjag

[thailiketoo]

An alarmingly high number of posters in this thread have a poor understanding of finance in general and mathematics in particular.

The first car scheme was a primarily 2012 focused policy. To date if there are 500-600 (~2 years combined) of the total 1 million plus cars sold in default, then that's a great NPL rate! Literally a banker's dream. Of the 12,000 loans "at risk of default", how many of those are just people who forgot to pay that month (i.e. are a couple days overdue)? This is normal of EVERY lending portfolio and should not be spun by the media to create panic and be used as fuel for slander. Lets give this scheme 2 more years when a good chunk of the loans are mature and tally the results then (note to those hoping for an NPL landslide, the default rate drops dramatically with each month as is the nature of every loan portfolio).

What about the rebates not paid, same the farmers ?? what about the % of others that may default, big problems here, your stance is somewhat BENT.

Off topic. This thread is not about the rebates. I believe there is another thread running on that issue. Again pick your targets wisely or you look foolish.

[PS2]

1% default would have been over 10,000 and that would have been good but only 500 defaulted which is great. It was a great idea.

You wrote, "3....quote manufacturers............boost in sales---then---- but all sales are down now due to the selling quickly for the scheme, job losses, go-slow." Increase in sales means more people employed and more money for the economy. Slow down? Link it.

100.000 has defaulted according to Reuters.

Assuming that nobody bought cash then it would be 10%, how many do you think has no monthly installments.

Japanese automakers, who control 80 percent of the local market, reported a 30 percent drop in sales on average in the second quarter of 2013.

http://www.reuters.com/article/2013/09/22/us-thailand-autos-idUSBRE98L0JJ20130922

[thailiketoo]

Predicted this when first announced. See many young people park their cars from work, take a quick look back whilst holding their 40THB plastic bag dinner as they enter their 3K THB/month room to stay until morning only to repeat drive to a job that pays 12-15KTHB. Trip to Ma's every other month if they have petrol money.

Looks way too much like the west and I feel for them because they've been caught up in the consumer the concept of a great opportunity soon fades with the reality they can't afford something that bites 30-40% off their income each month.

Sad

Sad is your comprehension of the OP. Only 500 out a million have defaulted. That is great not sad.

[arjunadawn]

This can't really be a surprise to the most basically educated person. Not unlike the progressive failed Cash for Clunkers USA program, policies such as this have negative predictable consequences. Put a "Chicken in Every Pot" and manage the fallout by obfuscating later. These policies artificially make a jump indicator in the markets while broadly depressing it later. How foolish.

[ginjag]

An alarmingly high number of posters in this thread have a poor understanding of finance in general and mathematics in particular.

The first car scheme was a primarily 2012 focused policy. To date if there are 500-600 (~2 years combined) of the total 1 million plus cars sold in default, then that's a great NPL rate! Literally a banker's dream. Of the 12,000 loans "at risk of default", how many of those are just people who forgot to pay that month (i.e. are a couple days overdue)? This is normal of EVERY lending portfolio and should not be spun by the media to create panic and be used as fuel for slander. Lets give this scheme 2 more years when a good chunk of the loans are mature and tally the results then (note to those hoping for an NPL landslide, the default rate drops dramatically with each month as is the nature of every loan portfolio).

What about the rebates not paid, same the farmers ?? what about the % of others that may default, big problems here, your stance is somewhat BENT.

Off topic. This thread is not about the rebates. I believe there is another thread running on that issue. Again pick your targets wisely or you look foolish.

Your post makes you look foolish, I was on topic as I posted about the scheme ----and the poor buying ---and the rebates people are still waiting for-unpaid-----brilliant scheme--rice-etc all related to PTP over trying to collect brownie points to win public support.

Suppose you think #76 is also wrong, but you must be right--it Quote "was a good idea"

Edited August 16, 2014 by ginjag

[thailiketoo]

The restriction on which cars were allowed to be purchased, small etc. means that the secondhand market will have a lot of unsellable cars for ages to come. They are not the type people purchase secondhand. Well done government yet again. Doomed to failure from day 1.

It didn't fail. 500 defaults out of one million is not failure it is success.

[thailiketoo]

please no more schemes, Thailand can't afford it.

At a default rate of less that half of a normal Western default rate any country or bank could afford it. Try reading the OP next time before reflex posting.

[liddelljohn]

a million cars have not been sold under the scheme only about 650,000 have actually been delivered after cancellations or credit refusals on orders and defaults or NPLs is cetainly a major worry for the finance companies ,, many of thes cars are on 7 Year loan deals which are very risky,

The other major effect has been an unprecidented fall in Used car prices and huge numbers of second hand cars sitting on sales lots , now new car sales are also faltering , its been a big mess .. also many of the buyers have not got thier 100k rebates so another scandal brewing

[Strangebrew]

If I read article correctly it said defaults were 500 per year increase 25 fold 12,000 others at risk the rest government suing for refund back If stats hold true could be tip of iceberg. With the huge flow of tourists rushing to visit Thailand and spend truck loads on money. How can this Be?

[thailiketoo]

Well seriously, who is really surprised?

All these people with their pay-monthly Mercedes, trying their best to impress.

A sad reflection on Thai culture rather than a failed government initiative.

I think most of the posters in this thread would be surprised if they actually read the OP and discovered the default rate much lower than average default rates in the West.

[JesseFrank]

Only 500 defaulters on 1 million people who's only intention was to get the 100.000 rebate ?

There are more than 500 defaulters each year on normal car finances, and they don't account for 1 million finances each year.

If you believe the figure of 500 you're a fool.

[thailiketoo]

To get back to the defaults. The plan itself was a tax rebate, not at all dissimilar to the 'cash for clunkers' programs than ran all over the west to stimulate new car sales.

It was the banks that made the loans, so no matter how much you people desperately want this to be some PT corruption scandal, it's really just a total failure of the banks in their lending practices.

The policy itself may well have been misguided and a waste of money, as I also believe a good deal of the stimulus programs in the US & Europe were, but the defaults lie fairly and squarely on the banks and their poor lending criteria...sub prime mortgage crisis, Greece, Irish, Icelandic, Spanish, British, Portuguese, Cypriot banks,,,shall we go on. Bad loans are hardly unique to Thailand

If only 500 default out of 1 million loans it is a great loan. If as you say the defaults lie fairly and squarely on the banks then the banks can be happy with such a low default rate.

[Payboy]

So, 500 defaulting and the rest still learning to drive.

Learning? who said they were doing that? Maintaining their blissful ignorance, I could believe that.

Heyyyy, I was just being polite. Kinda like talking about "developing" countries.

[Nigeone]

My last visit in January to my home in Lamphun area showed a row of approx 9 identical toyota ( I think) cars lined up in the largest second hand dealer in the area.

They were all low milage and can only assume from this scheme..Didnt stop to ask as they ripped me off previous so wouldnt give them the time of day..I'm back in 5 weeks will be interesting to see the situation now as we are 2 years plus from the start I think

[thailiketoo]

You must be Thai. Can't divide. Tell us what percent have defaulted? Now tell us what would be a bad percent? What would be a good percent? What would be a normal %.

Are you anti math or something? 500 or 12,000 out of 1.6 million is great. 1% is 10,000

In a big grown up country like USA........

The first mortgage default rate fell from 1.58 percent in January to 1.48 percent in February, while the bank card rate declined from 3.41 percent to 3.37 percent. The second mortgage and auto loan default rates showed margins increases, rising from 0.69 and 1.10 percent in January to 0.71 percent and 1.11 percent, respectively, in February.

Using your own spurious logic. The defaults have increased 25 X in one year! 25 times the number of defaults in one year!! That is a phenomenal amount by any standard. Has the US market EVER seen that increase? Of course not.

12,000 at risk defaults. Most of those will default. Then you have the thousands of at risk defaulters the banks are not reporting. Add to that all the people who are borrowing from family and loan sharks just to make repayments. Forget about servicing or new tyres or maintenance. People will expect the secondhand market to remain at its current bouyant levels, but that will not happen.

50,000 - 100,00 defaulters within 2 years. Guaranteed.

Fact 500 defaults. The rest is imagination. Only god could guarantee. Come back next year with facts.

[ginjag]

The restriction on which cars were allowed to be purchased, small etc. means that the secondhand market will have a lot of unsellable cars for ages to come. They are not the type people purchase secondhand. Well done government yet again. Doomed to failure from day 1.

It didn't fail. 500 defaults out of one million is not failure it is success.

Again ?? have you a photo copy machine, it could help you

[frollywolly]

You must be Thai. Can't divide. Tell us what percent have defaulted? Now tell us what would be a bad percent? What would be a good percent? What would be a normal %.

Are you anti math or something? 500 or 12,000 out of 1.6 million is great. 1% is 10,000

In a big grown up country like USA........

The first mortgage default rate fell from 1.58 percent in January to 1.48 percent in February, while the bank card rate declined from 3.41 percent to 3.37 percent. The second mortgage and auto loan default rates showed margins increases, rising from 0.69 and 1.10 percent in January to 0.71 percent and 1.11 percent, respectively, in February.

Using your own spurious logic. The defaults have increased 25 X in one year! 25 times the number of defaults in one year!! That is a phenomenal amount by any standard. Has the US market EVER seen that increase? Of course not.

12,000 at risk defaults. Most of those will default. Then you have the thousands of at risk defaulters the banks are not reporting. Add to that all the people who are borrowing from family and loan sharks just to make repayments. Forget about servicing or new tyres or maintenance. People will expect the secondhand market to remain at its current bouyant levels, but that will not happen.

50,000 - 100,00 defaulters within 2 years. Guaranteed.

Fact 500 defaults. The rest is imagination. Only god could guarantee. Come back next year with facts.

Fact. defaults increased 25 times.

Next year 25 x 500 = 12500

year after 24 x 12,500 = 312 500

Facts

[ginjag]

To get back to the defaults. The plan itself was a tax rebate, not at all dissimilar to the 'cash for clunkers' programs than ran all over the west to stimulate new car sales.

It was the banks that made the loans, so no matter how much you people desperately want this to be some PT corruption scandal, it's really just a total failure of the banks in their lending practices.

The policy itself may well have been misguided and a waste of money, as I also believe a good deal of the stimulus programs in the US & Europe were, but the defaults lie fairly and squarely on the banks and their poor lending criteria...sub prime mortgage crisis, Greece, Irish, Icelandic, Spanish, British, Portuguese, Cypriot banks,,,shall we go on. Bad loans are hardly unique to Thailand

If only 500 default out of 1 million loans it is a great loan. If as you say the defaults lie fairly and squarely on the banks then the banks can be happy with such a low default rate.

Can I ask you -is this all you are contributing--do you not want to speak about any downsides ??