Thailand Auto Sales to Decline for Fourth Year on China Slowdown

[webfact]

Thailand Auto Sales to Decline for Fourth Year on China Slowdown
by Anuchit Nguyen and Jie Ma

- Toyota expects Thai vehicle sales to drop 9 percent in 2016
- Company says Thai car demand may recover in two years

HONG KONG: -- China’s economic slowdown is affecting its Asian neighbors and hitting vehicle sales in Thailand, with Toyota Motor Corp. expecting industry demand to fall for a fourth straight year.

Industry auto sales will decline 9 percent to 720,000 units this year, Kyoichi Tanada, president of Toyota’s Thai unit, told reporters in Bangkok on Thursday. The prediction is gloomier than estimates by consulting firm Frost & Sullivan, which recently forecast vehicle sales will drop 1.3 percent to 780,000 units on weak consumer spending, challenges in the exports sector and global economic volatility.

Toyota’s estimate for 2016, representing about half of the industry’s sales peak in 2012, underlines the challenges that the Southeast Asian country faces amid a slowdown in China, the largest trading partner for most nations in the region.

Full story: http://www.bloomberg.com/news/articles/2016-01-22/thailand-auto-sales-to-decline-for-fourth-year-on-china-slowdown

-- Bloomberg Business 2016-01-22

[trogers]

This is the first good news for Thailand today.

Less household debts, and less traffic and pollution. Good in the long run.

[Pib]

The drop in Thailand could be higher than 9% when the economic slow down is combined with the new (and higher)Thailand excise tax on new vehicles sales which went into effect 1 Jan 16. The new excise tax is based on engine size and emissions compared to just engine size....when the dust settles the new & improved excise increases the cost of vehicles sold in Thailand....the Thai govt Revenue Dept appreciates your business....be happy....pay more tax.

http://englishnews.thaipbs.or.th/content/133144

October 16, 2015 10:25 am

The new automobile tax that based excise tax collection on carbon dioxide emission from the vehicle will be implemented in January next year as planned.

This was affirmed by the Finance Minister Apisak Tantiworawong yesterday.

The new car tax will see buyers of new cars next year paying higher of 85,000-200,000 baht, depending on the emission of carbon dioxide from engines, and see price drop of 10,000-15,000 baht for eco cars.

The new automobile tax law was approved by the Cabinet in 2012.

Finance minister Apisak confirmed that the ministry would push through with the tax adjustments approved by the Cabinet in 2012 on the structure of the motor-vehicle excise tax, stressing that the implementation of the new tax collection on January 1, 2016, would be a good thing,

He said the new law will base excuse tax collection on the emission of carbon dioxide instead of on the size of the vehicle’s engine.

This would help lower emissions and bring better environment in the country, he said.

He said vehicle that emits a higher level of carbon dioxide will be subjected to pay higher tax.

The new adjustment will, in turn, influence changes in the prices of automobile as well, he said.

It is predicted that the price of eco-cars will decrease by about 10,000-15,000 baht, while the price of pickup trucks will rise by about 10,000 baht.

For small cars, price will increase by about 85,000-160,000 baht, and the price of larger cars will be 200,000 baht higher or more.

[trogers]

The drop in Thailand could be higher than 9% when the economic slow down is combined with the new (and higher)Thailand excise tax on new vehicles sales which went into effect 1 Jan 16. The new excise tax is based on engine size and emissions compared to just engine size....when the dust settles the new & improved excise increases the cost of vehicles sold in Thailand....the Thai govt Revenue Dept appreciates your business....be happy....pay more tax.

http://englishnews.thaipbs.or.th/content/133144

October 16, 2015 10:25 am

The new automobile tax that based excise tax collection on carbon dioxide emission from the vehicle will be implemented in January next year as planned.

This was affirmed by the Finance Minister Apisak Tantiworawong yesterday.

The new car tax will see buyers of new cars next year paying higher of 85,000-200,000 baht, depending on the emission of carbon dioxide from engines, and see price drop of 10,000-15,000 baht for eco cars.

The new automobile tax law was approved by the Cabinet in 2012.

Finance minister Apisak confirmed that the ministry would push through with the tax adjustments approved by the Cabinet in 2012 on the structure of the motor-vehicle excise tax, stressing that the implementation of the new tax collection on January 1, 2016, would be a good thing,

He said the new law will base excuse tax collection on the emission of carbon dioxide instead of on the size of the vehicles engine.

This would help lower emissions and bring better environment in the country, he said.

He said vehicle that emits a higher level of carbon dioxide will be subjected to pay higher tax.

The new adjustment will, in turn, influence changes in the prices of automobile as well, he said.

It is predicted that the price of eco-cars will decrease by about 10,000-15,000 baht, while the price of pickup trucks will rise by about 10,000 baht.

For small cars, price will increase by about 85,000-160,000 baht, and the price of larger cars will be 200,000 baht higher or more.

Had to find ways to recover taxes lost through vote buying a few years ago.

[Pib]

My gut tells me that if the new vehicle sales do fall significantly and the Thai public is smart enough to associate that with increased vehicle price due to the excise tax that the govt will revise the tax downward....but they'll call it a temporary waiver/reduction like how they have kept the VAT at 7% for many years now vs 10%.

But if my Thai in-laws are reflective of the overall Thai population when you talk "excise" tax to them a glaze just comes over their eyes...they think the only tax is the the 7% VAT...they seem to think price increases are just associated with manufacturers/producers raising their prices and just can't seem to understand the high prices of so many things in Thailand are directly related to the high excise tax.

Since a large portion of the Thai population don't pay any personal income tax/file personal income tax returns the govt focus on excise taxes for a lot of its revenue. Excise taxes are a regressive tax (just like the VAT tax) since they apply equally to all income groups and therefore hit the poor harder than the rich.

Edited January 22, 2016 by Pib

[B166ER]

....China has a Surplus of 25 Million cars unsold.....apparently they pump out 50 Million units a year alone. Where the hell are those 25 Million Cars? News source NHK News....

[trogers]

....China has a Surplus of 25 Million cars unsold.....apparently they pump out 50 Million units a year alone. Where the hell are those 25 Million Cars? News source NHK News....

Parked at the 60+ million ghost home units...

[torpedo1970]

China slow down, come on.....

Smoke and mirrors

we will see auto sales go down for the next 2-3 years.

From 2018 there is 0% import duties on cars within ASEAN..........

many people, myself included will wait to save myself 300% import duties...

Cars are less than half the price in Laos......

It is not only cars, i find that most things we farrangs want is the same price in Thailand as in Europe, and it is not because of shipping cost, as i get the same products cheaper in Laos and in Vietnam

Thailand has become the tax hub of Asia, (or the Scandinavia of Asia)

[Pib]

Whatever they may reduce in import taxes they'll probably just offset by increasing the excise tax in order to maintain tax revenue. The current Thailand tax revenue structure is so dependent on import and excise taxes since so many people do not pay personal tax.

[bangon04]

Is it time for the government to introduce a scheme which promises cheap credit for all car buyers regardless of their ability to make payments, and a money back promise of 100000 Baht for every new car bought?

[MaiChai]

I saw a brand new toyota pickup belch out a serious amount of smoke the other day. I though most modern diesels have to be euro5 with diesel partical filters? Thus thai diesels dont meet international standards for emmisions?

[kartman]

I saw a brand new toyota pickup belch out a serious amount of smoke the other day. I though most modern diesels have to be euro5 with diesel partical filters? Thus thai diesels dont meet international standards for emmisions?

Lots of Thai owners are not afraid to void their Warranty and alter the engine for more power,they are not wimpy falangs .

[NongKhaiKid]

So China's suffering a slowdown but thankfully, as pointed out in another thread, there's still enough money for their tourists to swamp Swamp !

Any chance TAT and the Minister of Tourism could be getting it wrong ? Oh you silly boy !

[tomwct]

Thailand car prices are the highest in ASEAN and now they are going to increase the taxes, which will make the cars even more

expensive! But this is a good thing! Thai roads cannot accommodate anymore vehicles, so a slow down in car sales is a good

thing. It's too bad that with all these taxes collected on autos and trucks they can't build roads big enough to accommodate

the cars on the roads today! Thailand is and always will be a Third World Developing Country, but we Love It!

[trogers]

Thailand car prices are the highest in ASEAN and now they are going to increase the taxes, which will make the cars even more

expensive! But this is a good thing! Thai roads cannot accommodate anymore vehicles, so a slow down in car sales is a good

thing. It's too bad that with all these taxes collected on autos and trucks they can't build roads big enough to accommodate

the cars on the roads today! Thailand is and always will be a Third World Developing Country, but we Love It!

I thought Singapore holds the coveted position of highest prices for vehicles on the road in Asean, and maybe the world.

[tomwct]

Thailand car prices are the highest in ASEAN and now they are going to increase the taxes, which will make the cars even more

expensive! But this is a good thing! Thai roads cannot accommodate anymore vehicles, so a slow down in car sales is a good

thing. It's too bad that with all these taxes collected on autos and trucks they can't build roads big enough to accommodate

the cars on the roads today! Thailand is and always will be a Third World Developing Country, but we Love It!

I thought Singapore holds the coveted position of highest prices for vehicles on the road in Asean, and maybe the world.

You maybe right because you have to apply for a car tag before you can buy a car. I think the car tag costs allot of money, so

the total costs may exceed the Thai's cost!

[trogers]

Thailand car prices are the highest in ASEAN and now they are going to increase the taxes, which will make the cars even more

expensive! But this is a good thing! Thai roads cannot accommodate anymore vehicles, so a slow down in car sales is a good

thing. It's too bad that with all these taxes collected on autos and trucks they can't build roads big enough to accommodate

the cars on the roads today! Thailand is and always will be a Third World Developing Country, but we Love It!

I thought Singapore holds the coveted position of highest prices for vehicles on the road in Asean, and maybe the world.

You maybe right because you have to apply for a car tag before you can buy a car. I think the car tag costs allot of money, so

the total costs may exceed the Thai's cost!

I think a Honda City cost Bt1.8m in Singapore to be on the road.

[wabothai]

New cars are too expensive.

[Ricardo]

Is it time for the government to introduce a scheme which promises cheap credit for all car buyers regardless of their ability to make payments, and a money back promise of 100000 Baht for every new car bought?

I think that was part of the problem, the vote-winning promotion brought forward car-sales into 2012, from the years afterwards.

A bit like the rice-scheme, a short-term gain at the tax-payers' expense, but damaging & unsettling to the market longer-term.

[rickudon]

Hmm, a 9% drop in Auto sales expected? Is that just in Thailand or including exports? Meanwhile, government are predicting a 5% growth in overall exports this year, and Standard chartered a 5% growth in GDP. Sugar production is predicted to fall over 10% because of the drought, rice and rubber are hardly likely to do better, the auto industry have given their assessment, so where is this 'growth' going to come from? Wishful thinking, I think. And they pay these people to come up with these wonderful growth figures ....