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Customer LoginsThailand's new vehicle sales decline 15.3% y/y during November, with production up 4.7% y/y
New vehicle sales in Thailand remained in negative territory for the second consecutive month, reflecting a high base effect and consumers' wait-and-see attitude.
- Significance: Thai new vehicle sales declined by 15.3% year on year (y/y) in November, while vehicle production grew 4.7% y/y and exports fell 3.1% y/y, mainly on a decline in shipments to key emerging markets.
- Implications: The sales fall during November caused the year-to-date tally to decline 2.3% y/y, while exports are now down 1.4% y/y. Meanwhile, improved production during the month resulted in 2.7% y/y growth during the first 11 months of 2016.
- Outlook: IHS Automotive expects combined vehicle sales in the country to grow by 7.1% y/y in 2017 to about 802,818 units.
New vehicle sales in Thailand declined 15.3% year on year (y/y) during November to 64,771 units, according to data released by the Thailand Automotive Institute (TAI). Vehicle production during the month grew by 4.7% y/y to 170,784 units, while exports of completely built-up (CBU) units contracted 3.1% y/y to 98,477 units as shipments to key markets such as the Middle East, Africa, Central America, and South America shrank. For the year to date (YTD), total domestic sales slipped 2.3% y/y to 681,930 units, while production increased 2.7% y/y to 1,808,625 units and CBU exports by Thai automakers declined 1.4% y/y to 1,102,395 units.
By brand, the market leader and official compiler of automotive data in the country, Toyota, posted a decline of 4.1% y/y to 23,494 units in November, giving it a market share of 36.3%. Isuzu came second with 12,010 units (up 3.7% y/y), followed by Honda with 7,389 (down 28.2% y/y). Behind Honda was Mitsubishi with monthly sales of 4,397 units (down 49.6% y/y), Ford with 3,843 (down 14.6%), Nissan with 3,522 (down 28.1% y/y), and Mazda with 3,216 (down 23.4% y/y).
During the first 11 months of 2016, Toyota sold 216,360 units, representing a decline of 8.6% y/y. Toyota was followed by Isuzu with 127,654 units (up 2.7% y/y), Honda with 97,000 (down 2.6% y/y), Mazda with 38,043 (up 12.4% y/y), Nissan with 37,566 (down 16.2% y/y), Ford with 35,952 (up 15.1% y/y), and Mitsubishi with 32,454 (down 35.1% y/y).
Outlook and implications
New vehicle sales in Thailand stayed in negative territory for the second straight month during November. The decline during the month reflects the impact of a high base last year, consumers' wait-and-see attitude in search of rebates and new model launches during the Thailand International Motor Expo in early December, and a decline in consumer confidence. During the month, the consumer confidence index stood at 72.3 points, down from 73.1 points in October. We expect that the delay in purchasing will continue until late in the first quarter of next year or the beginning of the second quarter. IHS Automotive also attributes the decease during November to uncertainty over the local and global economy as well as export performance. During the same time last year, vehicle sales surged as consumers brought forward purchases because of a planned increase in excise tax.
To boost their sales in the country, automakers have either launched or plan to introduce new vehicles. According to IHS Automotive data, around 28 new/refreshed models are expected to be launched in the country next year. Mercedes-Benz Thailand revealed the locally assembled C-Class Coupé along with four more new models - the C-Class Cabriolet, CLA, E-Class Estate, and Mercedes-AMG GLE 43 4Matic - during the motor show. Honda has revealed the details of the next-generation CR-V sport utility vehicle (SUV). The automaker is expected to launch the vehicle in the first quarter of 2017.
IHS Automotive expects combined-vehicle sales in the country to grow by 7.1% y/y in 2017 to around 802,818 units, mainly due to a low base of comparison and new model launches. This total will be split between light vehicle (LV) sales of 755,678 units (up 7.8% y/y), and medium and heavy commercial vehicle (MHCV) sales of 47,140 units (down 2.4% y/y).
Thailand is an established global vehicle-manufacturing centre and a key location in the Association of Southeast Asian Nations (ASEAN) region. It has become an important production base for many global automakers, such as Ford, Honda, Mazda, Mitsubishi, Nissan, and Toyota, as they can gain easier access to sourcing and supply from the ASEAN region and reduce export logistical costs as Thailand has free-trade agreements (FTAs) with several nations. Recently, Mercedes-Benz Thailand announced plans to expand production capacity at its plant in Samut Prakan, Thailand, to meet an expected rise in demand for electric vehicles (EVs). SAIC-CP, a joint venture (JV) between China's Shanghai Automotive Industry Corporation (SAIC) and Thai conglomerate Charoen Pokphand (CP) Group, has held a ground-breaking ceremony for a second assembly plant at Hemaraj Eastern Seaboard Industrial Estate 2 in Chon Buri province.
IHS Automotive expects combined vehicle production in Thailand to remain flat at 1,929,772 units (down 0.6% y/y) in 2017, split between LV production of 1,925,688 units (up 0.1% y/y), and MHCV production of 30,291 units (down 1.8% y/y). We also forecast that LV exports from the country will be down 1% y/y to 1,231,940 units next year, largely on sluggish demand in emerging countries.
About this article
The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.