Carmakers expect the new excise tax computation on cars to have little impact on the local market, saying they will be manageable without any retail price increases.
Although the government is yet to formally announce details of the new formula, effective in mid-September, Wallop Treererkngam, executive director of Suzuki Motor Thailand, said that retail prices of Suzuki cars will remain unchanged despite the possible price increases.
"We believe that we can adjust the gap and design new promotional campaigns for customers so that Suzuki can follow the state's new rules," he said. "Eco-cars, a main contributor to Suzuki, will be less affected by the new excise tax rate."
From September 16, Thailand's amended excise tax law will revise the base tax rate to account for recommended retail prices of goods, rather than using only ex-factory prices and cost, insurance, and freight (CIF) values.
The government says a tax system based on retail prices will create a fairer playing field for makers and importers after some were found to have been exploiting the ex-factory and CIF values to understate tax bills.
The act also authorises the director-general of the Excise Department to determine recommended retail prices for use as a base for excise tax calculation in the event of disputes.
If the recommended retail price is not in line with the market price, the department will have the power to determine it. The value will be based on retail market prices or import prices.
The department is drafting 80 organic laws to facilitate the new base for excise tax computation.
Natt Patipanthada, general manager for marketing and strategic planning of Honda Automobile Thailand, said there would be no negative impact on the car market after the new excise tax computation comes into effect because the government is only changing the calculation method, with the current rate already based on CO2 emissions.
"No matter what the new tax computation will be, market sentiment is expected to be as it was with 6-7% projected growth to 820,000 units sold this year," he said. "But the new formula should be announced in advance for car distributors and importers to prepare."
Hiroyasu Sato, vice-president of Tri Petch Isuzu Sales, said the company could not comment on the matter and is waiting for a clear-cut policy from the government.
Meanwhile, Pattanadesh Asasappakij, a long-time radio host and president of King of Auto Products Co, is organising the 6th Fast Auto Show, aimed at stimulating the car market during the low season.
The show, featuring 12 auto companies and 15 used car dealerships, will run from June 28 to July 2 at Bitec. Last year's show held 1,526 new cars and 1,203 used cars with over 200,000 visitors.