Payback Time: As Predicted, Vehicle Sales Turn Negative in Thailand
As discussed back in April in “The Record Level of Autos Demand in Thailand in 2012 Will Not Be Surpassed Before 2020”, the expected payback in vehicle sales in Thailand has now kicked in. This follows on from the end of the tax rebate scheme in December 2012, which inflated light vehicle sales to a record 1.4 million units in 2012. The payback was never expected to be immediate as vehicles ordered in 2012 would naturally continue to be delivered for months afterwards but it is definitely here now and we stand by our view that vehicle sales will not return to the level of 2012 before 2020 without any market stimulus.
A delivery time of 3 months or more is not uncommon for a new car and given the surge in demand in 2012, in conjunction with output still catching up anyway after the disruption caused by the floods in 2011, it is not a surprise that light vehicle sales increased every month y-o-y through to April. In fact, demand was up by a third in the first four months of April, according to data from Renault. However, sales fell by 21% y-o-y in May and by a similar amount in June – growth has therefore most definitely turned negative. According to an article on just-auto.com on 18 July, Toyota Thailand expects vehicle sales to fall to 1.3 million vehicles this year but that seems rather optimistic given the magnitude of the “pull-forward” effect on sales in 2012 and into the early part of 2013.