First car deal defaults jump 25 folds: Thai Excise Dept

[PS2]

100.000 according to Reuters.

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

100.000 - 200.000 according to Topgear.

http://www.topgear.com.ph/news/industry-news/what-went-wrong-with-thailand-s-first-car-buyer-subsidy-program

500 according to pro-Thaksin Thai PBS

And why does all red posters ignore the fact that many bought cash.

Edited August 16, 2014 by PS2

[Sena Dave]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

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.

What forum is this thread you mention on ?? I wouldn't mind a look

[JesseFrank]

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.

There are more than 500 Thai people A MONTH who default on their car finance, or how do you think the weekly auctions of repossessed cars can happen ?

So what make the difference between Thai people who get the first rebate and Thai people who get a finance through the usual bank channels ?

[thailiketoo]

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.

If 500 out of 1 million defaulted how is 0.00% default rate a failure?

[thailiketoo]

<script type='text/javascript'>window.mod_pagespeed_start = Number(new Date());</script>

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.

What forum is this thread you mention on ?? I wouldn't mind a look

Thai Visa

[thailiketoo]

100.000 according to Reuters.

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

100.000 - 200.000 according to Topgear.

http://www.topgear.com.ph/news/industry-news/what-went-wrong-with-thailand-s-first-car-buyer-subsidy-program

500 according to pro-Thaksin Thai PBS

And why does all red posters ignore the fact that many bought cash.

Your debate is with the OP not the posters.

[Nigeone]

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.

I have to agree with this...apart from the natural increase in the risk of default as the loan goes further into its loan period, the effect of the tourism industry , and all the other clamp downs.. most for the better I might add..which will have a big effect on earnings in the short term..ie next 5 years...prices are going to go up for sure to pay for all changes so the money in the pocket of the average thai is going to decrease...Mind you if all these anti corruption changes carry on we all wont have to pay all the time to bent BIB etc..so all not bad

Edited August 16, 2014 by Nigeone

[arjunadawn]

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 wright--it Quote "was a good idea"

I will suppose CainBKK has some background in banking or related because he's informed that so many here have "poor understanding." As (I suspect) the majority of the TV ppl are adults and finished with primary education, his effort to educate seems a bit contorted and condescending. Anyone can package data and say "here, my point is made." On first glance it may even seem so (your point today does not reach this threshold). But the fundamentally wrong often needs no magic-math and selective indicators and numbers. Any person who has ever managed a household knows irrespective of the sleight of hand giving people "stimulus" that's in essence others peoples money can't bode well for an economy.

First you appropriate by force peoples monies through taxation then under the harmless guise of giving the people a break you provide incentives to buy cars- unless the manufacturers are reducing all car costs (in which case the effort would still be borne on the market through other means), society WILL pay fiscally. Like the rice scheme, artificially propping a segment of the market negatively influences broader market indicators by effectively driving down prices or going out of business. There is an immediate and broad impact on the secondary auto market. Subtle? Insignificant? Depends; are a small amount of jobs worth the price of this program? Many jobs? Any? For all defaults the banks absorb the losses. Banks pass that on to consumers. Banks unload autos repossessed and this further depresses the secondary markets. You may argue the numbers are not high but all the numbers are negative. The benefit to the economy is amorphous and touchy feely populism. It's destructive and amoral to redistribute wealth, especially when disguised as the national good. When governments favor a sector of the economy things get unpredictable. It's artificial injection and it's only true relation to the natural state of economics is force!

[PS2]

100.000 according to Reuters.

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

100.000 - 200.000 according to Topgear.

http://www.topgear.com.ph/news/industry-news/what-went-wrong-with-thailand-s-first-car-buyer-subsidy-program

500 according to pro-Thaksin Thai PBS

And why does all red posters ignore the fact that many bought cash.

Your debate is with the OP not the posters.

So you really believe that everyone one bought on finance and only 500 defaults.

[Sena Dave]

thailiketoo

Thank you, I would have spent all day scouring the internet if you hadn't given me that information

[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.

If 500 out of 1 million defaulted how is 0.00% default rate a failure?

This question can't be answered? It's a false question.

Please, in a snapshot, if/why do you feel the auto program was useful (either socially or economically)?

Thank you.

[muffy]

What ? You mean I have to make all the payments ?

[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.

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

The OP is about 500 defaults. May I ask why you don't want to discuss the topic of the OP? The reporter who wrote the story was a click baiter who thought that anyone would stop reading at the headline. If you read the topic it is very positive to the loan scheme. So I am just being on topic instead of inventing gloom and doom scenarios that were not mentioned in the OP.

Also I have no incentive to post one way or another. I read the OP and post on that subject. No one gives me talking points. I suspect I may be in a minority of posters without an agenda.

Edited August 16, 2014 by thailiketoo

[AGareth2]

told foreigners don't get tax rebate

legal?

[rodroy]

Does this imply that there will be a glut of repo's on the market?

Logical!

[Benmart]

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

Good point. The 500 defaulting will join the thousands that were reported to have already defaulted. Many of the remaining "drivers" will squeak along, likely barely making their montly installments, while creating havoc and mayhem on the roadways.

[thailiketoo]

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.

If 500 out of 1 million defaulted how is 0.00% default rate a failure?

This question can't be answered? It's a false question.

Please, in a snapshot, if/why do you feel the auto program was useful (either socially or economically)?

Thank you.

Is the OP about the relative values of the auto program? No. I'm sure you can start another thread about or contribute to the thousands of posts that have already been written about that subject.

This thread is about defaults of 500 people out of a million and a quarter of people in the program. I think that fact stands alone in declaring the program payment so far a success.

Is the program good or bad? It has been discussed ad infinitum here and I'll not go off topic and discuss it some more.

[JesseFrank]

Does this imply that there will be a glut of repo's on the market?

Logical!

No, it means that all the auctioneers will go bankrupt, because they can't live from only 40 repossessed cars a month spread over maybe as many auctioneers

[thailiketoo]

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

Good point. The 500 defaulting will join the thousands that were reported to have already defaulted. Many of the remaining "drivers" will squeak along, likely barely making their montly installments, while creating havoc and mayhem on the roadways.

Lie. Last year 20 cases defaulted this year 500. Try reading the OP.

[thailiketoo]

Does this imply that there will be a glut of repo's on the market?

Logical!

500 autos repo'd out of one and a quarter million sold? Hardly a glut. I would say a famine.

[ginjag]

Does this imply that there will be a glut of repo's on the market?

Logical!

Second hand car slump. Prices for a second hand Vios 3 years old is the same as a new Nissan march- go figure, Who now is buying 2 nd hand ??

All the manufacturers have a eco car on the market. at starters for 399K approx.

Who now is buying my second hand Toyota after 2 years on the market. 6years old, 60kilom, nice spec though clean, 390 K ??

This scheme has some bad downsides.

[thailiketoo]

500 people defaulted out of over a million. Are you OK. That is a great percent. What can't you read?

Read the OP again, 10 to 20 defaults last year, 500 defaults this year = increase of 2500%, apply this logic for next year: 500 x 2500% = 12,500, and the following year = 312,500. Do you get the gist of it now!!! It is not a total of 500 that is just the figure to date. The point being made by the OP is the substantial % increase over last years figures and the forecast that this will only get worse as time goes on.

Chicken little thinking. Maybe the default rate will double from the current year 0.00% to 0.00% next year?

My guess is as good as yours.

[thailiketoo]

Does this imply that there will be a glut of repo's on the market?

Logical!

Second hand car slump. Prices for a second hand Vios 3 years old is the same as a new Nissan march- go figure, Who now is buying 2 nd hand ??

All the manufacturers have a eco car on the market. at starters for 399K approx.

Who now is buying my second hand Toyota after 2 years on the market. 6years old, 60kilom, nice spec though clean, 390 K ??

This scheme has some bad downsides.

You wrote, "Prices for a second hand Vios 3 years old is the same as a new Nissan march- go figure" OK it's because the default rate for last year is 0.00%

[Paulzed]

It sounds very similar to the Australian Aboriginal way of purchasing a car.

1. We will pay you ten percent now.
2. Then we will pay you the rest when you catch us.

[The Deerhunter]

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

You make me feel sick when you say such nasty things about our beautiful ex-first lady prime minister and her heroic campaign strategist. All these things were implemented purely to help the poor people of Thailand. How can you possibly suggest otherwise? I am going to have to go and sit in the garden and eat worms. But,wait, what about Suthep & Abhisit and the nasty monk?

Edited August 16, 2014 by The Deerhunter

[alanrchase]

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.

If 500 out of 1 million defaulted how is 0.00% default rate a failure?

This question can't be answered? It's a false question.

Please, in a snapshot, if/why do you feel the auto program was useful (either socially or economically)?

Thank you.

Is the OP about the relative values of the auto program? No. I'm sure you can start another thread about or contribute to the thousands of posts that have already been written about that subject.

This thread is about defaults of 500 people out of a million and a quarter of people in the program. I think that fact stands alone in declaring the program payment so far a success.

Is the program good or bad? It has been discussed ad infinitum here and I'll not go off topic and discuss it some more.

Concerning the number of defaults my reading of the OP is that there are 12,500 defaults so far, 500 of which are confirmed as never going to pay another payment.

[kerrysum]

Please excuse my language,

Well no shit Sherlock......

What does it take?

Just my thoughts.......

[ginjag]

Does this imply that there will be a glut of repo's on the market?

Logical!

Second hand car slump. Prices for a second hand Vios 3 years old is the same as a new Nissan march- go figure, Who now is buying 2 nd hand ??

All the manufacturers have a eco car on the market. at starters for 399K approx.

Who now is buying my second hand Toyota after 2 years on the market. 6years old, 60kilom, nice spec though clean, 390 K ??

This scheme has some bad downsides.

You wrote, "Prices for a second hand Vios 3 years old is the same as a new Nissan march- go figure" OK it's because the default rate for last year is 0.00%

It's because Eco cars are selling so well, economy-new spas-style-1.3----same speed as a 1.6--as roomy-as comfortable--led lights-less insurance- re-sale good. Look at the Nissan eco-compare with Nissan other sales---Honda--Toyota-Mitsu. older nice 1.5s are not selling.

[Sarana]

I wondered how all these Thais could afford to drive around in brand new SUV's...I suppose it makes the feel better when their boss has a Maserati.

[The Deerhunter]

No surprise here, the scheme was always doomed to failure. - Gotta wunda about the mentality of some/most of the economists (hanging off the purse strings of the auto manufacturers (sic)) advising the government into such stupidity. Past performance proves they could not come up with such a far fetched scheme by themselves.

Anyway, great for the 2nd hand car market and those looking for a bargain.

EDIT: this does not only apply to cars. -- Here in Isaan there is a mountain of (mostly) Kabulta tractors being "snatched back" by the banks. Cannot say if there was a government subsidy but there has been some very aggressive sales by the tractor manufacturers.

This type of scheme is nothing new. The US and UK had already done something similar except they based theirs on exchanging an old car (over 10 years old in the UK) for a more efficient new one so gaining on fuel economy and environmental issues and no increase in vehicle numbers. Much more difficult to defraud than the Thai 'put it in your grandmother's grandfather's elderly bedridden aunt's name' method used here. It's true the numbers aren't that high yet but they are a big increase from previously but we'll have to wait and see what happens.

I'm in Isaan but I haven't noticed tractors being taken back but maybe I look at girls more than agricultural equipment.

They may not have been directly subsidised but rice farmers suddenly had a lot more money coming in because of the rice scheme. Some probably drank or gambled it but I expect many thought it would be a good idea to invest in new machinery based on the higher income. I've said before that there was nothing really wrong about the rice scheme except the price was way too high and not sustainable. A lower price that could be maintained for a few years to enable farmers to plan ahead and maybe some in the form of grants for machinery so it isn't spent on drink and gambling.

Looking at girls? I hear there are some bargains to be had there too, with tourist numbers down this season.

Your final paragraph is out of touch with the day to day priorities of the very poor tenant farmers at the bottom of the economic range. Actually, a lower enough price to be maintained (against all potential threats to the scheme) would not have attracted sellers. While the scheme still involved stockpiling rice till the market rose in demand (which was a key point of the scheme), then history was against it See Euro butter mountain, Bunker Hunt & world silver prices. When you encourage people to stop growing good rice & grow cheap stuff that other countries can grow cheaper, it was always going to end in tears. (especially if you have land borders with three of those countries.) Either no-one thought of these problems (which I doubt), or other agendas were at work. Financial assistance with seed & fertilizer prices will also work till the WTO gets onto it. As Thailand continues to aspire to leave third world status, either they need to do something about the economies of scale of growing rice (like sophisticated machinery pools) or move to crops that have better margins. Problem is, rice, sugar & manioc grow quick & usually don't leave you with no income for several years. Hence, they grow what they can afford to grow, not what they can get the best price for.

Edited August 16, 2014 by The Deerhunter