Thailand's domestic car sales are expected to recover to 800,000 vehicles next year thanks to higher income for farmers and the expiry of five-year ownership conditions for the government's first-time car buyer scheme.
Speaking at a seminar during Big Motor Sale 2016, Pimonwan Mahatchariyawong, deputy managing director of Kasikorn Research Centre, said the country's car market is likely to start recovering in 2017 after four straight years of contraction.
The research house forecast overall farmers' income to edge up 3% next year to around 800 billion baht. Nonetheless, those figures remain lower than during the 2006-11 period, when their overall income averaged 1.2 trillion baht with a compound annual growth rate of 14%.
Kasikornbank's research house also projected the country's economy to grow by 3% this year and 3.3% next year.
Mrs Pimonwan said the uptrend in the car market will become visible in the second half, with monthly sales projected to average 66,000-65,000 vehicles, compared with 61,438 in the first half.
But overall car sales in 2016 are expected to decline 5-6% to 750,000-760,000 units, she said.
The fading effects of the government's first-time car buyer scheme, which ended in 2012, saw sales fall by 7.4% to 1.33 million vehicles in 2013 before dropping further to 881,832 in 2014.
Last year's domestic car sales fell by 9.33% to 799,592 vehicles, according to the Federation of Thai Industries (FTI).
In a related development, the FTI's Automotive Industry Club reported that vehicle output in July declined by 7.18% year-on-year to 153,950 units, mainly because of a drop in pickup truck sales both at home and abroad.
Production from January to July, however, registered a rise of 4.2% to 1.147 million vehicles.
It reported domestic car sales slightly dipped by 0.4% to 60,635 vehicles after rising for three consecutive months.
The market over the first seven months shrank slightly by 0.2% to 429,265 vehicles.
Vehicle exports in July decreased by 3.13% to 99,155 units due to declining orders from the Middle East, Africa, Central America and South America.
But export value last month still increased by 4.19% to 51.53 billion baht.
The country shipped 693,978 vehicles over the first seven months, up 2.29%, which were valued at 371 billion baht -- an 18% increase.
FTI's club spokesman Surapong Paisitpatanapong said the FTI maintains its forecast at 750,000-780,000 units for domestic sales, down by 2.5% to 6.2% from the previous year, with exports up 1-3% to 1.22-1.25 million units.
The country's car production in 2016 is expected to increase by 2-4% to 1.95-2 million units.
In a related development, Krisda Utamote, director for corporate communications at German luxury car maker BMW Group Thailand, said the company projected the luxury car segment to stay flat at 22,000 units in 2016, mainly because of the adverse effects of the new excise tax on cars, which came into effect in January.