Loan rejection continues to dent car sales

Loan rejection continues to dent car sales

People attened the Motor Expo 2019 at Impact Muang Thong Thani from Nov 29-Dec 10. (Photo by Varuth Hirunyatheb)
People attened the Motor Expo 2019 at Impact Muang Thong Thani from Nov 29-Dec 10. (Photo by Varuth Hirunyatheb)

Car sales during January to November fell 1.1% year-on-year to 918,267 units after monthly sales decreased six months in a row, according to the Federation of Thai Industries (FTI).

The FTI’s automotive industry club reported on Wednesday that car sales in November stood at 79,299 units, down sharply by 16.2% from the same month last year.

Surapong Paisitpatanapong, the club’s spokesman, said the local market still suffers from high auto loan rejection rates from financial institutions, as they are concerned about the high level of household debt.

“Buyers face difficulties purchasing cars because of tight auto loan approvals, which should continue into next year,” said Mr Surapong.

“Moreover, there were many new and refreshed eco-cars and pickups launched in the fourth quarter, resulting in car sales declining in this quarter for a short period.”

He said the club is still optimistic for December sales to recover from the contractions from June to November because of attractive promotions.

For the country’s car shipments, November exports totalled 75,185 cars, down sharply by 19.3% year-on-year. The shipment value for the period also decreased sharply by 18.1% to 39.4 billion baht.

Mr Surapong said exports in November dropped in most markets except the Middle East and Africa because of the bearish economy in trading countries and the US-China trade war.

Car exports over the first 11 months totalled 981,838 units, down by 6.07% from the same period last year and the shipment value for the period remained in the red at 7.14% to 508 billion baht.

“The sluggish global economy has pressured Thailand as well. The baht’s appreciation is also a negative factor impacting car shipments,” Mr Surapong said.

With the contraction of both local sales and exports, the club reported production in November fell sharply by 21.8% to 154,088 cars.

November output rose slightly by 0.85% from the previous month.

Production during January to November stood at 1.88 million cars, down by 5.95% year-on-year.

For 2019, the auto club downgraded the country’s full-year production from 2.15 million cars to 2 million, blaming the bearish sentiment for both local sales and exports.

The outlook for local car sales in 2019 has been cut from 1.05 million to 1 million units, while the club slashed the full-year projection for exports from 1.1 million cars to 1 million.

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