Boston, MA -- (SBWIRE) -- 08/21/2012 -- BMI remains upbeat on the long-term outlook for Thailand's auto industry, despite the clear short-term damage that was caused by the recent heavy flooding across the country during Q411, which closed several production lines and caused extensive damage to supply chains across Asia.
Indeed, looking at the most recent data, sales of new vehicles in Thailand increased by 30.5% year-onyear (y-o-y) to 87,788 units during the month of April 2012, according to data released by Toyota Motor (Thailand). Toyota dominated the passenger car sector, with a market share of 35.3%.
Sales of passenger cars in April were up 23.4% y-o-y to 38,211 units, while commercial vehicle sales rose 35.2% y-o-y to 49,132 units. Toyota contributed 36.5% to total car sales and 34.7% to total commercial vehicle sales. For the market as a whole, total new vehicle sales increased by 20% y-o-y to 367,109 units during January-April 2012. On current trends, this would indicate full-year sales for 2012 breaking through the 1mn mark. Consequently, against this strong backdrop, BMI has decided to revise up its forecast for new car sales in Thailand across 2012. We now feel that an increase of 30% in new car sales is achievable, taking sales for the current year to 1,032,305 units.
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Two factors should continue to lend support to Thai new car sales across 2012. The first is the likelihood of further interest rate cuts by the Bank of Thailand, with BMI's Macroeconomic team calling for another 0.25% cut in rates before year-end. This should make car financing deals cheaper for Thai consumers.
Another source of support is the Thai government's tax rebate scheme for first-time buyers, first announced in October 2011. The scheme - which is due to run until end-2012 - allows first-time car buyers to reclaim up to THB100,000 in excise taxes from their purchase of domestically-produced cars valued at up to THB1mn and with engine capacity of up to 1,500cc.
Over the first quarter of 2012, Thai auto production was up by 6.52% at just under 500,000 units, according to the Federation of Thai Industries Automotive Club. March 2012 was a new record month for the Thai auto production industry, with total output of 190,936 units. Based on first quarter performance, Thai auto production looks set to reach the 2mn mark in 2012.
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