2013-10-13 12:54:18 - Recently published research from Business Monitor International, "Thailand Autos Report Q4 2013", is now available at Fast Market Research
Auto sales in Thailand in July 2013 fell 25.4% year-on-year (y-o-y), to 98,251 units, according to the Federation of Thai Industries (Gaikindo). In line with BMI's call for the market to contract in 2013, y-o-y vehicle sales have been steadily declining since May. Following the end of the first car scheme in 2012, sales are now increasingly dependent on fundamental market demand.
Although sales for the first seven months of 2013 were up 13.9% y-o-y, to 839,044 units, we expect further y-o-y declines in the coming months as domestic demand takes over as the key driver. We have decided to adopt an even more downbeat stance as we see evidence of weakening domestic demand. As such, we have revised our vehicle
sales growth forecast to -5.1%, to 1.36mn units, amidst the following factors.
Full Report Details at
Although precise figures for July auto production in Thailand are still unavailable, Gaikindo says output grew by about 21% y-o-y, in the first seven months of 2013, to 1,542,405 units. Based on Gaikindo figures which are currently available for H113, this would suggest that July saw the first y-o-y contraction in vehicle production in the last 18 months.
Besides the risk to the export story, we remain cautious on domestic sales which will pose another headwind for auto production. Indeed, we recently downgraded our domestic vehicle sales forecast, as we believe the current recession in Thailand raises the spectre of a sharper than expected fall in consumer demand for passenger cars, as indebted households curb their spending.
In light of these challenges, we are downgrading our Thailand 2013 vehicle production growth forecast to 4.1%, to 2.55mn units, from 8.0% previously.
That said, we believe production in some segments such as the eco-car category will continue to show resilience. While pick-ups still dominate the share of exports at 60%, the percentage of eco-car exports has increased from 20% in 2012 to 33% currently. As consumers in Indonesia and other Asian countries grapple with higher fuel prices, and China together with other emerging markets become increasingly concerned about the environmental impact of cars, we see the potential for eco-cars to fill this gap.
Risk To Investment In The Short Term
As we turn more downbeat on the Thai auto sector in the short term due to weakening consumer demand, we see the risk of some suppliers and carmakers postponing their investments in the sector. However, in the medium- to long term, the sector will continue to attract investment due to the country's status as the region's premier automotive hub.
Report Table of Contents:
BMI Industry View
- BMI Industry View
- Business Environment
- Industry Forecast
- Table: Thailand Autos Sales 2010-2017
- Table: Thailand Autos Production 2010-2017
- Table: Thailand Autos Trade Balance 2010-2017
- Passenger Vehicles
- Passenger Cars
- Table: Domestic Passenger Car Sales 2012
- Commercial Vehicles
- Table: Best-Selling Pick-Up Models in Thailand From Jan-Jul 2013
- Macroeconomic Forecasts
- Table: Thailand - Economic Activity
Industry Risk Reward Ratings
- Asia Pacific - Risk/Reward Ratings
- Table: Autos Risk/Reward Ratings Asia-Pacific
- Company Monitor
- Honda Motor
- Ford Motor
- Asia Overview
- Table: Vehicle Sales May 2013 (Cbus)
Global Industry Overview
- Global Industry Overview
- Demographic Outlook
- Table: Thailand's Population By Age Group, 1990-2020 ('000)
- Table: Thailand's Population By Age Group, 1990-2020 (% of total)
- Table: Thailand's Key Population Ratios, 1990-2020
- Table: Thailand's Rural And Urban Population, 1990-2020
- Automobile Industry
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