Market for luxury cars zooms ahead

Premium car sales are expected to keep rising in Thailand this year despite weakened consumer consumption, say European marques.

Models seem keen for the new Mercedes- Benz S Class. Mercedes-Benz saw its yearon- year sales surge by 41% to 5,507 cars in the first eight months of this year.

"Sales of premium cars in general are unlikely to be affected by the anaemic economy," said Michael Grewe, president and chief executive of Mercedes-Benz (Thailand).

"The purchasing power of Thai middle-to-high-income people is still stable and strong."

Premium cars are generally defined as models priced from 1.8 million baht.

About 13,000 premium cars were sold in 2012, with the figure expected by the industry to reach up to 17,000 this year.

For the first eight months of this year, Mercedes-Benz saw its year-on-year sales surge by 41% to 5,507 cars.

In 2012, it sold 6,274, a rise of 34% from 2011.

"The premium car segment normally disconnects from the mass car market, so customers' decisions to purchase premium cars are independent from economic conditions," Mr Grewe said.

Mercedes-Benz is committed to moving ahead with its investment plan to serve the Thai market, which is projected to grow dramatically this year.

Earlier, it allotted 200 million baht this year to raise production capacity and 1 billion baht to add five more dealerships and service centres nationwide.

The investment will raise production capacity at its Thonburi Assembly Co plant in Samut Prakan by up to 3,000 units from the present 16,000.

BMW Group Thailand said its sales have been strong this year, with 4,500 cars including Minis sold over the past seven months, representing 39% growth from the same period last year.

In 2012, BMW sold 6,114 vehicles in Thailand, up 44% from 2011.

Matthias Pfalz, president of BMW Group Thailand, said the group has been closely watching Thailand's economic situation and car sales. Despite the slowdown, it projects that consumer consumption and car purchases will rise in the fourth quarter.

The German car maker recently began assembly of the popular Mini Countryman at its Amata Industrial Estate plant in Rayong province to handle rising local and regional demand.

The company expects to make 200-250 Mini Countrymans in the first year. The locally made Mini will be priced 24-29% cheaper than imported models thanks to lower tax.

About the author

Writer: Piyachart Maikaew
Position: Business Reporter