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Back on track after three-year slumpSales are up again and there's a bigger variety of models to choose from in a more competitive market outlook positive
Sales of new cars in the first five months of this year were 50% higher than a year earlier. Data from Tri Petch Isuzu Sales Co paints a rosy picture for manufacturers whose sales had dropped by as much as 70% in three years from almost 600,000 per year. In the past three years major manufacturers have restructured their operations, with parent firms from the United States and Germany stepping in to oversee streamlining. A sharp increase in the variety of brands available has transformed Thailand into a buyer's market from one favouring sellers. One-ton pickup trucks are still the strongest segment in terms of sales, with January-May total of 52,720 units, a 40.9% increase year-on-year. Cars sales totalled 33,298 (up 76.9%), sport utilities 5,680 (25%) and buses and heavy trucks 7,288 (50.2%). Market slump The extent of the preceding market slump makes the figures look better than they are, but the sales target of 280,000 this year, set by manufacturers, is a key indicator of the industry's potential. Last year's most optimistic target was 200,000 units, with Toyota Motor Thailand president Yoshiaki Muramatsu being one of the few executives to back that forecast. Sales actually totalled 218,330 units, including 129,900 pickup trucks and 66,858 cars. Pickups Ford's arrival made an immediate impact. The world's largest producer of trucks took a 10.4% market share in the first five months, based on sales of 5,529 units. With executive director Mike Pease at the helm of the sales arm, Ford Sales and Service (Thailand), the brand shook the Japanese dominance of the segment by moving ahead of Nissan in total sales in February. Since then, Ford has never looked back.
Battle for supremacy However, the battle for supremacy in the segment will still be between old rivals Isuzu and Toyota. Isuzu leads all brands with a 36.5%, while Toyota claims 23%. Mitsubishi, third with 15.8% of the loal market, is still the export leader because of international demand for its L200 Strada model, which is being shipped as far as Australia and New Zealand. The Ford-Mazda joint venture called AutoAlliance, and the BMW Manufacturing (Thailand) facilities, both in Rayong, could one day provide export competition.
Pickup sales aside, the introduction of the double-cab version, or four-door pickup truck, was made possible with lobbying from Ford Operations president David Snyder, who has since passed the torch to Chatchai Bunnag, who is considered the first Thai professional to head a major automotive company in Thailand. Cars Mercedes-Benz is the only European marque to make the top-five rankings which are usually occupied by Japanese brands. It's hard to dispel the myth that the three-star luxury marque is the only brand to represent success. However, other factors such as professional management from parent firm DaimlerChrysler and a host of financial packages and new products helped the German brand into fifth place with 999 sales in the first five months, representing a 3% market share. Locally-assembled C-class cars ranging from 2.5 million baht to 2.9 million baht in price were due by mid-year, giving a pointer to the improvement in Thailand's assembly standards. The BMW 3-series launched in May is assembled at Rayong and, according to sources, has the Munich plant playing catch-up with the Rayong plant in terms of quality and build standards. However, market leadership in sales volume continues to be the long-time battle between Toyota and Honda. Moments of brilliance in marketing wise have enabled these two powerhouses to claim credit for stimulating the car market, such as when they launched the Toyota Soluna and the Honda City. Both these models are big successes in Thailand. Toyota led five-month sales with 12,603 units, followed by Honda (9,867), Nissan (4,627), Mitsubishi (1,491) and Mercedes-Benz (999). The overall market benefits the customer right now because many brands are clearing old stocks to make way for new models. Attractive rebates and other incentives, plus warranties and easy financing, await the buyer. New models due for launch this year are the Honda Civic, Toyota Corolla, Mitsubishi Lancer, Nissan Sunny and the Mercedes-Benz C-Class CKD version. Sport Utility Vehicle (SUV) Thailand's love affair with sport utes is a fad, partly brought about the image of the US army Jeep, and partly by the desire by many motorists to appear ``with-it'' outdoor types. Some locals buy an authentic Jeep frame, or whatever is left of it, for 20,000 baht and spend between 500,000 and 750,000 baht on a new suspension system. Credit should also be given to marketing executives such as Apichet Sitakalin who, during his tenure with the now defunct Thai Chrysler Automotive, gave owning such a vehicle a trendy image, as very few Thais ever use their SUVs for off-roading. Toyota, relying heavily on a product with a pickup truck platform, led with 2,547 sales in the first five months, followed by Honda with 1,813 units helped by the popular CR-V, which happens to be at the very end of its product life cycle. The rest consist of Suzuki (639), Jeep (347) and Isuzu (306). Buses and heavy trucks This segment suffered from the burst in the real estate bubble, but sales are now increasing sharply. Increased marketing efforts have been combined with products that meet international emission standards. In the first five months, Toyota sold 1,895 units and Nissan 1,678 units to take about a quarter of the market each, while commercial vehicle specialist Isuzu was third with 1,397 units and 19.1%. Hino, after consolidating its sales, manufacturing and administrative operations, was fourth, ahead of Mitsubishi.
The most encouraging development in the motorcycle industry is the shift of demand from two-stroke models to the environmentally-friendly four-stroke alternative. Although Thailand had at one time become the third-largest market for motorcycles after China and India, the downside was that most sales were of two-stroke versions notorious for their carcinogenic exhaust fumes.
Honda has been to the fore of efforts to change consumer preferences and four-stroke models made up 61% of total motorcycle sales in the first five months of this year, up from 52% a year earlier. According to A.P. Honda, about 800,000 new motorcycles are expected to flood the market this year, with Honda expected to dominate with at least 75% of the market. Sales for the five months totalled 341,040. Honda led with 74%, followed by Suzuki (14%), Yamaha (10%) and Kawasaki (2%). All brands registered gains over last year's figures during the same period, while total sales were 62% higher. |
While pedestrians are cursing an increase in exhaust fumes, car makers are delighted. The emissions spell big money as Thailand's auto industry powers out of recession.
Motorcycles
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