Thailand passenger car sales rose by 4.2% in April 09

Aug. 1, 2009 - PRLog -- Thailand's new vehicle sales continue to drop on the back of political instability and restricted credit, but in this report, it is highlighted the investment will still go ahead in the expanding small car segment.

While April's total vehicle sales of 39,713 units were down by 27.4% compared with April 2008 figures, passenger car sales registered positive growth for the first time in four months as sales rose by 4.2% year on-year (y-o-y) to 15,981 units. This was in stark contrast to the commercial vehicle (CV) segment, which fell by 39.7% to 23,732 units. This was the 12th consecutive month of falling sales and can be attributed to the ongoing decline of the one-tonne pick-up segment, which accounts for 21,039 units of the total CV market, down by 38.7% y-o-y.

Growth in the passenger car segment means that India's Tata Motors has announced it will be revisiting its investment plans under Thailand's eco car project, and has approached the government to relax the terms of the incentives. Also, Ford Motor and Mazda Motor's AutoAlliance Thailand joint venture (JV) will forge ahead with its US$500mn project. Their new plant in Rayong will produce compact cars for both brands, the Ford Fiesta and Mazda 2, and is scheduled to commence operations by end-2009. The plant will have an initial annual production capacity of 100,000 units, taking the JV's total annual capacity to 275,000 units. Most cars produced under the eco car programme will fall into the 'under 1.5 litre' category, which grew by 25% y-o-y in 2008.

Although Thailand's domestic market is contracting, it is still an attractive option as an export base. As such, it ranks sixth in the Business Environment Ratings with 56.3 out of a possible 100 points. A number of new export-oriented investment projects have raised the country's production growth potential for the next five years, while several existing free trade agreements (FTAs) increase the reach of investors. Government incentives for manufacturers producing low-emission vehicles have boosted Thailand's regulatory environment score, as has its good labour relations and trade relationships.

However, the top 10 manufacturers all posted negative sales growth over 4M09, although the competitive landscape remained largely the same. Toyota Motor continued its dominance with a 40.8% market share, followed by Isuzu Motors with 21.7% and Honda Motor with 16.9%. Up next was Nissan Motor with 5.12%. The biggest drop in sales came from General Motors (GM) brand Chevrolet, with a 55.8% fall.

Japan's Mitsubishi Motors (MMC) was close behind with a 48.5% contraction.

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