To
the relief of car salesmen and groans from environmentalists,
exhaust fumes are regaining their toxic potential on Bangkok's
streets
Back on track for hub status
ALFRED THA HLA
It's time to talk of hubs again
in the motoring industry. With more than 200,000 vehicles sold
locally in 1999, car makers rode a rejuvenated economy, reviving
Thailand's bid to become Asean's vehicle assembly and export hub.
Thailand's first push came in 1996 when a combination of factors
-- strong consumer spending, scores of now-defunct auto leasing
firms and a tad too many taxis -- contributed to record annual
sales of more than 590,000 new vehicles.
The engine fell out when the recession struck the following year,
but domestic sales and exports picked up sharply in 1999.
Vehicle exports for the first nine months (Jan-Sept) totalled
91,003 assembled models for 41.9 billion baht, according to data
supplied by MMC Sittipol and Ford Sales (Thailand).
For
2000, exports of assembled vehicles are expected to total 150,000,
with Australia and New Zealand among the markets.
Motorcycles sales, down to one-third of the annual number before
the recession when domestic demand peaked at 1.4 million units,
have seen unprecedented domination by Honda, whose rivals focused
on niche segments instead of the mainstream family-sport segment.
Key economic indicators show positive signs of steady growth
but it will be three or four years before local sales nudge 600,000
again.
A US-based Toyota executive says car sales are linked to the
growth of the economy.
''The US economy has been on an upward trend for more than 90
months, which is why there is optimism for automobile sales,''
said the economics trained-executive, also a colleague of Toyota
Motor Thailand (TMT) president Yoshiaki Muramatsu.
The
executive's predictions proved right as the US has had its best
year for sales in more than a decade, with more than 17 million
new vehicle purchases in 1999.
In theory, the same should apply to Thailand's auto industry
as it makes its second run to be the ''Detroit of the East''.
The big four Asean markets -- Indonesia, Malaysia, Thailand and
the Philippines -- have recorded impressive results this year,
especially Malaysia, where car sales should reach about 285,000
for a 90% lift year-on-year, according to data provided by
Visteon Automotive Systems.
True, Thailand's domestic sales are 80,000 fewer than Malaysia's,
and its growth rate is only half. But Thailand is still the best
candidate for hub status because it has no ''national-car'' policy
and offers a level playing field.
Total vehicle sales
New vehicle purchases for January to November 1999 totalled 181,134,
some 43.5% more than a year earlier.
The industry began on a sour note with January sales amounting
to only 9,708, which led to an initial annual target of about
160,000.
The third quarter was the first time monthly sales had exceeded
20,000, the mark reached in September, while heavy rain was blamed
for a 10% decrease in showroom and dealership traffic. November
sales totalled 21,265, the best of the year.
By brand, Toyota was the consumer's choice with a 34% market
share based on 61,624 sales in the first 11 months, a 74.4% increase
year-on-year. Toyota has now led total sales for 19 consecutive
years.
Yoshiaki Muramatsu, in his final year of a traditional four-year
term as president of Toyota Motor Thailand (TMT), led Toyota above
30%. While most country managers share the same sentiments on
the hardships of the recent past, when sales plunged by 70%, Mr
Muramatsu was credited with maintaining and guiding the country's
largest automobile seller out of the economic meltdown.
Isuzu (41,923, 23.1%), Honda (20,524, 11.3%), Nissan (17,510,
9.7%) and Mitsubishi (16,771, 9.3%), with Toyota, made up the
top five brands in the Japanese camp's 91% market share.
The Toyota Sport Rider : highly successful track record
but at the centre of controversy in the auto industry
Ford, the only US ''big three'' firm in the top 10, finished
the first 11 months with 6,506 sales and a 3.6% share to end up
sixth overall. Ford Operations president David Snyder, a tireless
advocate of reduced tax rates for double-cab trucks, proclaimed
it ''a very good year'' for Ford in Thailand.
Hyundai was the best performing Korean brand with 1,438 sales
and an 0.8% share. Daewoo and Kia each have 0.3% shares, with
Kia recently changing its management from the Premier Group (Osotspa)
to the Yontrakit group.
It has been a long year for the Korean camp where creditors have
forced parent firms -- chaebols -- to shed excess fat and focus
on the automobile sector. Analysts are confident about the direction
taken but are cautious because of the previous ultra-cheap pricing
policy used in Thailand.
BMW (Thailand), with Jesus Cordoba at the helm, won the battle
of the luxury market over traditional rivals Mercedes-Benz, Volvo
and Peugeot, with 1,711 sales and an 0.9% share for eighth overall.
The German marque is confident that the planned local assembly
of the new 3-Series at its Rayong-based BMW Manufacturing (Thailand)
plant will boost sales further.
Skoda, the Czech Republic's most famous export, now German-run,
is scheduled to make its debut in the second quarter of 2000 with
a 2.0-litre estate Octavia as its flagship. Importer Yontrakit
Motor Sales expects an initial demand of 600 in the first year.
The overall vehicle market for 2000 is expected to grow by as
much as 40% on latest predictions, giving a target of 280,000
sales.
Cars
Cars accounted for 56,282 or about 31% of all vehicle sales in
the first 11 months of 1999, achieving a 41.3% increase from the
same period last year.
Japanese brands had an 86.3% market share. Korean makes took
3.7% and American and European makes 10%.
Toyota claimed its second crown of the year with 20,554 sales
( 36.9% share), followed by Honda (16,997, 30.2%), Nissan (6,618,
11.8%), Mitsubishi (3,490, 6.2%) and BMW (1,711, 3%).
Peugeot, up 129%, and Nissan, up 112%, had the best growth rates
year-on-year.
The car segment lacked the competitive spirit previously kindled
by intense rivalry between the Honda City and the Toyota Soluna
a few years back. This time, the winner was the one with access
to more incentives and a bigger promotion budget, which is why
Toyota more or less won by the end of the third quarter.
However, Honda won many hearts when it unveiled its S2000 roadster
at the Tokyo Motor Show. The 2.0-litre normally-aspirated roadster
boasts maximum output of about 250 horses, which qualifies it
as the world's best output per litre (125hp), an honour previously
held by Italian thoroughbred Ferrari.
Honda Cars (Thailand) general manager Apichart Wangsathornthanakul
summed up 1999: ''Out of the several launches in the first half
of 1999, I would say that the Honda Type-Z launch was our coup
de grace because it shows we did our marketing and our homework.
We will be stronger for 2000.''
The Honda executive added that many were surprised by the upward
trend of the economy and the success of the incentives provided
by the government. ''The atmosphere is nice and bright, the competition
will be keener with more players in the future.''
Toyota also came out with a smaller 1.8-litre re-engineered MR-2,
which delivered a spirited performance to counter a rather hideous
exterior design.
Lots of hype was made about the Ferrari 306 Modena (15.9 million
baht), Maserati 3200GT (7.9 million baht) and Audi TT (3 million
baht) launches in 1999 but these pricey toys belong to a niche
market in the car segment.
One-ton pickups
The race for supremacy in the core segment of Thailand's auto
industry is a touchy one because of the variety of product segmentation
and categorisation on behalf of the manufacturers.
According to a Toyota Motor Thailand (TMT) sales report, the
11-month scenario has Isuzu on top with 39,108 units and a 36.8%
share, followed by Toyota's 37,904 and 35.7%. Not exactly a neck-and-neck
battle with a 1,204-unit difference, but close.
On the other hand, there is the Tri Petch Isuzu Sales (TIS) report
which states that Isuzu is in the lead with sales of 38,774, while
Toyota is second with 30,458 -- a sales advantage of 8,316 to
Isuzu.
Despite this minor controversy, Isuzu should be crowned as 1999
winner of the pickup segment (based on monthly sales).
The remaining players are Mitsubishi with sales of 11,500 units
and a 10.8% market share followed by Nissan (8,295, 7.8%), Ford
(6,505, 6.1%), Mazda (2,883, 2.7%) and Opel (98, 0.1%).
Ford Operations president David Snyder said he expected to win
at least 8% of the one-ton pickup segment in 2000, thus signalling
the determination of the ''Big Three'' US assemblers to break
the dominance of the Japanese powerhouses.
No non-Japanese brand has succeeded in beating the top four best
sellers -- Isuzu, Toyota, Mitsubishi and Nissan -- in the Thai
pickup truck market.
An Isuzu source said pickups took the highest share of the total
local market for all types of vehicles (54.4%) and the commercial
vehicle market (88.8%).
''The rising cost burden from exchange rate fluctuations due
to stronger Japanese and American currencies will result in unavoidable
price increases early next year,'' he warned.
Exports
According to export data provided by MMC Sittipol and Ford Operations
(Thailand), the total export market for January to September totalled
91,003 completely built-up vehicles worth about 36 billion baht
-- and an extra 5.9 billion baht in parts -- shipped to markets
including Australia, New Zealand and African countries.
Mitsubishi remains the country's top exporter of one-ton pickups
based on a 47.6% share of the 91,003 CBU units shipped.
A
total of 43,374 of the Mitsubishi L200 Strada were exported for
about 17.8 billion baht, up by 8.7% year-on-year, while Mitsubishi
parts worth about 848 million baht helped fuel the sales drive.
Ford and Mazda completed the top three exporters for this category
by claiming 17% and 16.5% market shares respectively. Both brands
are assembled at the US$500-million AutoAlliance (Thailand) plant,
which rolled out 15,556 Ford CBU products and another 15,032 Mazda
CBU units in the first nine months.
Ford's export total amounted to about 5.7 billion baht while
Mazda's was about 5.5 billion baht, parts included.
Toyota was fourth with 9,188 CBU units worth 3.2 billion baht
and another two billion baht in parts. Honda came fifth with 5,916
CBU units for 2.7 billion baht and parts worth 1.3 billion.
The
export market is expected to grow to about 150,000 CBU vehicles
in 2000, thus continuing a steady growth trend that has fuelled
confidence in the economy and confirmed the worldwide acceptance
of Thai-made products.
Motorcycles
The motorcycle market in 1999 was a shadow of its former self.
Sales were projected at 580,000, compared with 1.4 million in
1995.
However, from the viewpoint of smaller players like Yamaha, Suzuki
and Kawasaki, a ''giant'' was created in the form of Honda.
Distributor A.P. Honda had a 72.9% share of the 516,517 bikes
sold between January and November 1999, followed by Yamaha (66,245,
12.8%), Suzuki (54,907, 10.6%) and Kawasaki (18,711, 3.6%).
January
left a sour taste for every motorcycle powerhouse as sales totalled
a mere 27,718. The market allowed monthly sales to top the 50,000-unit
mark only three times, while September was the industry's best
month with 56,899 sales.
Consumer preference for the family-type motorcycle remained strong,
accounting for an estimated 65% of sales, followed by family-sport
type (30%) and sport type (5%). These are rough estimates.
The motorcycle slump has also resulted in a significant shift
from the traditional two-stroke motorcycle to the four-stroke
version. However, this shift was not caused by consumer demand
but rather by a smaller total market against a stable four-stroke
market. The percentage difference makes it look like the manufacturers
in Thailand have heeded environmental causes.
The truth is that manufacturers are forced to listen to Thai
consumers who still believe in the prowess of a two-stroker. But
the smaller total market has enhanced sales and market share figures
of the four-stroke motorcycle.
Summary
The Thai auto industry sold about 200,000 new vehicles and more
than 500,000 motorcycles while the export drive witnessed 91,000
CBU vehicles shipped to a score of foreign destinations.
Much to the relief of car manufacturers, the intended ''mass
transit panacea'' in the form of the elevated electric train system
which opened on December 5 appears to lack the ability to pry
Bangkok motorists from their cars and motorcycles. It is still
image-building to be seen stuck in traffic for hours clutching
a mobile phone where it can be seen, rather than be demeaned by
mixing with the masses.
So the outlook for car sales, if not the air on Silom Road, remains
bright and it's only a matter of time before Thailand revives
its regional hub claims.
For
2000, exports of assembled vehicles are expected to total 150,000,
with Australia and New Zealand among the markets.
The
executive's predictions proved right as the US has had its best
year for sales in more than a decade, with more than 17 million
new vehicle purchases in 1999.
A
total of 43,374 of the Mitsubishi L200 Strada were exported for
about 17.8 billion baht, up by 8.7% year-on-year, while Mitsubishi
parts worth about 848 million baht helped fuel the sales drive.
The
export market is expected to grow to about 150,000 CBU vehicles
in 2000, thus continuing a steady growth trend that has fuelled
confidence in the economy and confirmed the worldwide acceptance
of Thai-made products.
January
left a sour taste for every motorcycle powerhouse as sales totalled
a mere 27,718. The market allowed monthly sales to top the 50,000-unit
mark only three times, while September was the industry's best
month with 56,899 sales.
