Conclusion on tax incentive for used car exporters expected within this month

[webfact]

Conclusion on tax incentive for used car exporters expected within this month

BANGKOK, 8 September 2015 (NNT) – The Ministry of Finance will decide this month whether it will issue a tax incentive to encourage the exportation of used cars to remedy the oversupply problem in the second-hand car market.

According to Rungson Sriworasat, the permanent secretary to the Ministry of Finance, the tax incentive measure is being studied as the finance ministry seeks to address the impact the economic slowdown on automobile sales in the country.

The ministry is looking to provide a tax rebate on each used car that is exported, a measure Mr. Rungson believes would help increase used car exports by no less than 10,000 cars per year.

However, the ministry is evaluating the amount of money the state would lose from providing such incentive to car exporters and a conclusion is expected within this month.

Speaking about the private sector's proposal for a tone-down in the 5-year ownership rule applied to individuals who participated in the first car buyer scheme, Mr. Rungson said the ministry was evaluating the appropriateness and legality of reducing the ownership period to 3 years. He noted that such 'un-locking' of the rule would help sellers of new cars.


-- NNT 2015-09-08

[taichiplanet]

Export to where? Not many RHD markets and 2nd hand prices in Thailand are high compared to many countries.

[edwinchester]

Oversupply because of the ridiculous second hand values. Bring them down to more realistic levels and there wouldn't be so many sitting on the forecourts.

[snowgard]

Oversupply or completly OVERPRIZED!!! In EU you can buy a older BMW 7er for under 40.000 Baht. The same costs here some million.

http://suchen.mobile.de/fahrzeuge/search.html?climatisation=&adLimitation=&airbag=&damageUnrepaired=NO_DAMAGE_UNREPAIRED&usedCarSeals=&usage=USED&scopeId=C&doorCount=&vatable=&emissionsSticker=&zipcode=&emissionClass=&makeModelVariant1.makeId=3500&makeModelVariant1.modelId=33%2C34%2C35%2C36%2C37%2C38%2C39%2C40%2C41%2C63&makeModelVariant1.modelGroupId=24&isSearchRequest=true&sortOption.sortBy=searchNetGrossPrice&sortOption.sortOrder=ASCENDING

[stevenl]

Oversupply because of the ridiculous second hand values. Bring them down to more realistic levels and there wouldn't be so many sitting on the forecourts.

So you're suggesting the government interferes in the market? How would you propose they lower the second hand values?

Edited September 8, 2015 by stevenl

[shaurene]

Another load of crap. The second hand dealers push for stupid over prices and they do not back down on their prices.

If it happens 90% of second hand cars in Thailand do not meet the crash conditions in western country's, even most new ones.

I bought a new Mazda B50 turbo 2.5 lt 3 years ago for a good price, my some came on holliday here and used it he said it was a fantastic wagon. He is a registered car dealer in New Zealand. At the price I bought it for he said he would make a good profit on the, in New Zealand. I sent him the chassis number he checked it out and not allowed in New Zealand it did not have the crash qualifications.

[edwinchester]

Oversupply because of the ridiculous second hand values. Bring them down to more realistic levels and there wouldn't be so many sitting on the forecourts.

So you're suggesting the government interferes in the market? How would you propose they lower the second hand values?

Not suggesting the Govt interferes at all. Let the market decide. If people can't sell them the price is to high. Lower it or have sitting there as useless inventory.

[realenglish1]

He wants to remove the 5 year "hold period" to three years so people will get a new car sooner

This just moves the goal past to over supply of used cares down the road

Who is this guy anyways Does he understand economics ?

[stevenl]

He wants to remove the 5 year "hold period" to three years so people will get a new car sooner

This just moves the goal past to over supply of used cares down the road

Who is this guy anyways Does he understand economics ?

Where did you read that? Would not fit this story since there is no connection to export, only to selling.

[WarpSpeed]

^He did say that in the article but it makes perfect sense, if they increase the export sales it opens up for new/used cars to enter the market opening the door for new car sales to replace them. It's actually one of the few sensible proposals I've heard come out of the Thai ministry. Myanmar (though left drive) they still buy most of their cars from Thailand and is a good possible market, but even better is the south east of Africa.

Speaking about the private sector's proposal for a tone-down in the 5-year ownership rule applied to individuals who participated in the first car buyer scheme, Mr. Rungson said the ministry was evaluating the appropriateness and legality of reducing the ownership period to 3 years. He noted that such 'un-locking' of the rule would help sellers of new cars.

Edited September 8, 2015 by WarpSpeed

[Srikcir]

Remember that Thai vehicles are designed for driving on the left side.

Excluding left side driving nations where cars are manufactured domestically, Thai exports of second-hand vehicles would be limited to nations like Pakistan, Nepal, Bangladesh and ten South African nations such as Lethos, Namibia, Zimbabwe, Uganda and Malawi. These are hardly high volume vehicle markets. And given their low per capita income, high import tariffs might be used by their governments to raise revenues and result in overpricing Thai vehicles.

The tax rebate is a poor idea.

[IMHO]

Given that any exported car is going to get taxed on it's way into the new country, rebating the excise tax is the only way to make such a scheme viable. All the arguments of Thai cars being overpriced disappears once you remove excise taxes...

The alternative is, continue trying to sell a massive oversupply to a saturated market (i.e. don't export them) - so far, that's not going so well.

The big question here is: do two wrongs make a right? That's an awful lot of tax revenue to give away, again.

Edited September 8, 2015 by IMHO

[IMHO]

^He did say that in the article but it makes perfect sense, if they increase the export sales it opens up for new/used cars to enter the market opening the door for new car sales to replace them. It's actually one of the few sensible proposals I've heard come out of the Thai ministry. Myanmar (though left drive) they still buy most of their cars from Thailand and is a good possible market, but even better is the south east of Africa.

Speaking about the private sector's proposal for a tone-down in the 5-year ownership rule applied to individuals who participated in the first car buyer scheme, Mr. Rungson said the ministry was evaluating the appropriateness and legality of reducing the ownership period to 3 years. He noted that such 'un-locking' of the rule would help sellers of new cars.

Don't forget Malaysia, where they drive on the same side of the road as Thailand, and pay 400K+ for a 5yo VIOS that struggles to get 250-300K here.

[fish fingers]

hair brained non incentive ..

The second hand market is quite interesting at the moment - far too much supply over the last 5 years (until this year)

I want to see the Dealers really squeezed and lets see, maybe their ridiculous pricing can start being more realistic

[WarpSpeed]

^He did say that in the article but it makes perfect sense, if they increase the export sales it opens up for new/used cars to enter the market opening the door for new car sales to replace them. It's actually one of the few sensible proposals I've heard come out of the Thai ministry. Myanmar (though left drive) they still buy most of their cars from Thailand and is a good possible market, but even better is the south east of Africa.

Speaking about the private sector's proposal for a tone-down in the 5-year ownership rule applied to individuals who participated in the first car buyer scheme, Mr. Rungson said the ministry was evaluating the appropriateness and legality of reducing the ownership period to 3 years. He noted that such 'un-locking' of the rule would help sellers of new cars.

Don't forget Malaysia, where they drive on the same side of the road as Thailand, and pay 400K+ for a 5yo VIOS that struggles to get 250-300K here.

I kinda had just because in my mind I thought they'd be a somewhat saturated market and not necessarily a new one as well they also have their own manufacturing, but if the prices there are also inflated then it does become a market to consider.

Srikcir; There is no regulations in most countries regarding right or left drive, that's merely a western perspective and has no practicality in many of these markets where they take what they can get and the road systems are so primitive it matters little anyway. Also have no idea the size market you THINK is required but Thailand is not THAT big a place and even the numbers they're talking about of 10,000 vehicles exported is very doable in those markets, that's only 1000 cars over 10 countries, that's a minuscule number in consideration.

Edited September 9, 2015 by WarpSpeed

[Sviss Geez]

Oversupply or completly OVERPRIZED!!! In EU you can buy a older BMW 7er for under 40.000 Baht. The same costs here some million.

http://suchen.mobile.de/fahrzeuge/search.html?climatisation=&adLimitation=&airbag=&damageUnrepaired=NO_DAMAGE_UNREPAIRED&usedCarSeals=&usage=USED&scopeId=C&doorCount=&vatable=&emissionsSticker=&zipcode=&emissionClass=&makeModelVariant1.makeId=3500&makeModelVariant1.modelId=33%2C34%2C35%2C36%2C37%2C38%2C39%2C40%2C41%2C63&makeModelVariant1.modelGroupId=24&isSearchRequest=true&sortOption.sortBy=searchNetGrossPrice&sortOption.sortOrder=ASCENDING

Sheer nonsense, the under B40,000 735i you give as an example to compare prices is a 1988 model, available here in Thailand in the region of B200,000 (Talad Rod), not for "some million".

[Sviss Geez]

Export to where? Not many RHD markets and 2nd hand prices in Thailand are high compared to many countries.

There are 77 countries worldwide that drive on the left apart from Thailand and around 30 just in this part of the world so that's quite a selection and as these vehicles won't be sold in Thailand it's safe to assume that Thai prices won't apply.

Edited September 9, 2015 by Sviss Geez

[Sviss Geez]

Oversupply because of the ridiculous second hand values. Bring them down to more realistic levels and there wouldn't be so many sitting on the forecourts.

What you are disregarding is that the forecourt prices are at that level because that's the price that the cars sell at, if they didn't the prices would be lowered. Wouldn't reducing the supply (your idea) increase the prices of those that were available to buy?

[edwinchester]

Oversupply because of the ridiculous second hand values. Bring them down to more realistic levels and there wouldn't be so many sitting on the forecourts.

What you are disregarding is that the forecourt prices are at that level because that's the price that the cars sell at, if they didn't the prices would be lowered. Wouldn't reducing the supply (your idea) increase the prices of those that were available to buy?

Cars obviously aren't selling because they are considering this scheme to stimulate demand.

[snowgard]

Oversupply or completly OVERPRIZED!!! In EU you can buy a older BMW 7er for under 40.000 Baht. The same costs here some million.

http://suchen.mobile.de/fahrzeuge/search.html?climatisation=&adLimitation=&airbag=&damageUnrepaired=NO_DAMAGE_UNREPAIRED&usedCarSeals=&usage=USED&scopeId=C&doorCount=&vatable=&emissionsSticker=&zipcode=&emissionClass=&makeModelVariant1.makeId=3500&makeModelVariant1.modelId=33%2C34%2C35%2C36%2C37%2C38%2C39%2C40%2C41%2C63&makeModelVariant1.modelGroupId=24&isSearchRequest=true&sortOption.sortBy=searchNetGrossPrice&sortOption.sortOrder=ASCENDING

Sheer nonsense, the under B40,000 735i you give as an example to compare prices is a 1988 model, available here in Thailand in the region of B200,000 (Talad Rod), not for "some million".

Open your eyes man!!! There are cars from 1992-1998 for the same price also. Fact is that 2.hand cars are very, very expensive in Thailand.

All other is NONSENS!!! Or can you Show me one secondhand BRAND car what is cheaper in Thailand as in Europe?

Give me a sample please!!!

[stevenl]

Oversupply or completly OVERPRIZED!!! In EU you can buy a older BMW 7er for under 40.000 Baht. The same costs here some million.

http://suchen.mobile.de/fahrzeuge/search.html?climatisation=&adLimitation=&airbag=&damageUnrepaired=NO_DAMAGE_UNREPAIRED&usedCarSeals=&usage=USED&scopeId=C&doorCount=&vatable=&emissionsSticker=&zipcode=&emissionClass=&makeModelVariant1.makeId=3500&makeModelVariant1.modelId=33%2C34%2C35%2C36%2C37%2C38%2C39%2C40%2C41%2C63&makeModelVariant1.modelGroupId=24&isSearchRequest=true&sortOption.sortBy=searchNetGrossPrice&sortOption.sortOrder=ASCENDING

Sheer nonsense, the under B40,000 735i you give as an example to compare prices is a 1988 model, available here in Thailand in the region of B200,000 (Talad Rod), not for "some million".

Open your eyes man!!! There are cars from 1992-1998 for the same price also. Fact is that 2.hand cars are very, very expensive in Thailand.

All other is NONSENS!!! Or can you Show me one secondhand BRAND car what is cheaper in Thailand as in Europe?

Give me a sample please!!!

You do know there is not one European car market? Prices in Germany e.g. are much lower than in Holland.

Anyway, the market sets the prices here, so the market can not be overpriced. It can be more expensive of course.

[Orac]

Oversupply because of the ridiculous second hand values. Bring them down to more realistic levels and there wouldn't be so many sitting on the forecourts.

What you are disregarding is that the forecourt prices are at that level because that's the price that the cars sell at, if they didn't the prices would be lowered. Wouldn't reducing the supply (your idea) increase the prices of those that were available to buy?

Cars obviously aren't selling because they are considering this scheme to stimulate demand.

They are wanting to flood the market by allowing those tied in to the five year first car deal to sell earlier which would upset all the car owners who didn't take part in the scheme as the resale value of their current cars would drop due to the massive oversupply.

[BIGJIMMY]

So, did they lower the selling of the car brought under the new buyer scheme to 3 years or not????

[Sviss Geez]

Oversupply or completly OVERPRIZED!!! In EU you can buy a older BMW 7er for under 40.000 Baht. The same costs here some million.

http://suchen.mobile.de/fahrzeuge/search.html?climatisation=&adLimitation=&airbag=&damageUnrepaired=NO_DAMAGE_UNREPAIRED&usedCarSeals=&usage=USED&scopeId=C&doorCount=&vatable=&emissionsSticker=&zipcode=&emissionClass=&makeModelVariant1.makeId=3500&makeModelVariant1.modelId=33%2C34%2C35%2C36%2C37%2C38%2C39%2C40%2C41%2C63&makeModelVariant1.modelGroupId=24&isSearchRequest=true&sortOption.sortBy=searchNetGrossPrice&sortOption.sortOrder=ASCENDING

Sheer nonsense, the under B40,000 735i you give as an example to compare prices is a 1988 model, available here in Thailand in the region of B200,000 (Talad Rod), not for "some million".

Open your eyes man!!! There are cars from 1992-1998 for the same price also. Fact is that 2.hand cars are very, very expensive in Thailand.

All other is NONSENS!!! Or can you Show me one secondhand BRAND car what is cheaper in Thailand as in Europe?

Give me a sample please!!!

My response was to your daft claim that a 1988 735i in the Thai market would be priced at "some million". It wouldn't, and you'd know that if you opened your eyes man.

[Sviss Geez]

Oversupply because of the ridiculous second hand values. Bring them down to more realistic levels and there wouldn't be so many sitting on the forecourts.

What you are disregarding is that the forecourt prices are at that level because that's the price that the cars sell at, if they didn't the prices would be lowered. Wouldn't reducing the supply (your idea) increase the prices of those that were available to buy?

Cars obviously aren't selling because they are considering this scheme to stimulate demand.

They are wanting to flood the market by allowing those tied in to the five year first car deal to sell earlier which would upset all the car owners who didn't take part in the scheme as the resale value of their current cars would drop due to the massive oversupply.

Any oversupply would depend on how many people will actually want to sell their cars, you can't assume that everyone who took advantage of the scheme will all want to sell immediately.

[IMHO]

Any oversupply would depend on how many people will actually want to sell their cars, you can't assume that everyone who took advantage of the scheme will all want to sell immediately.

I agree - how many people whop needed a gov't incentive to buy the first-ever car just 3 years ago, are now in the position to trade-up?

Yet... that's exactly the concept this proposed legislation is built upon - that reducing the minimum ownership from 5 years to 3 years will somehow stimulate new car sales.

I think more people will simply use the changed rules to abandon car ownership, and go back to using a motorsai they can afford - thus depressing the used market, rather than stimulating the new market.