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Thai new vehicle sales surge 20.6% y/y in November; Toyota Thailand starts EV sharing service

20 December 2017 Jamal Amir

Thai new vehicle sales surged 20.6% year on year (y/y) during November to 78,082 units, with passenger vehicle volumes up 34.9% y/y and commercial vehicle sales up 12.5% y/y.

IHS Markit perspective

  • Implications: The Thai new vehicle market grew for the 11th consecutive month during November, mainly thanks to new model launches, the expiry of the five-year lock-up period for vehicles bought under the first-time car buyer scheme, improved private investment, and increased government spending. Automakers intend to fight for control of the local market by bringing out new models and expanding their dealership networks.
  • Outlook: IHS Markit forecasts that Thai light-vehicle sales will grow by 8.6% y/y to 787,896 units in 2017. This is further expected to grow by 8.0% y/y to 850,564 units in 2018.

New vehicle sales in Thailand surged 20.6% y/y during November to 78,082 units, according to data released by Toyota Motor Thailand, the official compiler of automotive data in the country. Passenger vehicle sales grew by 34.9% y/y during the month to 31,435 units, while commercial vehicle (CV) sales climbed 12.5% y/y to 46,647 units. For the year to date (YTD), industry sales are up 12.5% y/y at 767,342 units, with passenger vehicle sales surging 21.7% y/y to 304,795 units and CV sales up 7.2% y/y at 462,547 units.

Thai new vehicle sales

By brand, Toyota's sales declined 7.4% y/y to 21,744 units in November, giving it a market share of 27.9%. Isuzu came second with 14,224 units (up 18.4% y/y), followed by Honda with 10,368 units (up 40.3% y/y), Mitsubishi with 6,370 units (up 44.9% y/y), and Ford with 5,499 units (up 43.1% y/y). In the YTD, Toyota sold 208,227 units, a decline of 3.8% y/y. It was followed by Isuzu with 145,108 units (up 13.7% y/y), Honda with 113,305 units (up 16.8% y/y), Mitsubishi with 60,824 units (up 24.7% y/y), and Nissan with 52,700 units (up 40.3% y/y).

Toyota Thailand starts EV sharing service

Toyota Thailand has started an electric vehicle (EV) sharing service in Bangkok, according to a report by Bangkok Post. The automaker partnered with Chulalongkorn University to launch its EV sharing model to be used intra-campus, with an investment budget of THB50 million (USD1.5 million). The service started on 1 December with 10 units of the Toyota Coms ultra-compact EVs manufactured by Toyota Auto Body, and an additional 20 units of the ultra-compact EV will be introduced by mid-2018. "Toyota has joined hands with Chulalongkorn as this area sees 100,000 people per day, so there is are plenty of opportunities for car-sharing demand because of insufficient parking lots and expensive parking fees," said Toyota Thailand chairman of the board Ninnart Chaithirapinyo. "Our phase-one timeline is December 2017-November 2019 to study and research user behaviour, while the second phase will commercial, with involvement from interested partners to invest and expand operations," said Chaithirapinyo. The EV sharing service is available from Monday to Friday between 7 AM and 7 PM. Interested users can register via its mobile application for a THB100 fee, and get 100 usage points. The service fee is THB30 for 20 minutes of driving and after that THB2 per minute will be charged. Meanwhile, the move to implement the EV sharing service on the Chulalongkorn University campus is a positive step towards addressing the country's air pollution problems and traffic congestion issues.

Outlook and implications

Within the Association of Southeast Asian Nations (ASEAN) region, Thailand is the second-largest market after Indonesia for light vehicles, including passenger vehicles and light commercial vehicles (LCVs). Thailand is set to account for 24.5% of ASEAN light-vehicle sales in 2017, according to IHS Markit's light-vehicle sales forecast data.

Market share in Thailand by OEM, Nov 2017

New vehicle sales in Thailand grew in November for the 11th consecutive month. This growth can be attributed to new model launches, the expiry of the five-year lock-up period for vehicles bought under the first-time car buyer scheme, improved private investment, and increased government spending. IHS Markit forecasts that light-vehicle sales in the country will grow by 8.6% y/y to 787,896 units in 2017, mainly on a low base of comparison, an increase in government spending, strong demand for eco-cars, and the expiry of the five-year lock-up period for vehicles. For 2018, we forecast that light-vehicle sales in the country will grow further by around 8.0% y/y to 850,564 units. Automakers plan to fight for control of the local market by bringing out new models and expanding their dealership networks in the country. Our forecasts show that around 32 new or refreshed models will be launched in the country in 2018.

Eco-cars are gaining in popularity in the country. According to data released by the FTI, sales of eco-cars in Thailand during the first 10 months of 2017 went up by 32.8% y/y to 120,019 units. The second phase of the country's eco-car programme was announced in 2013, with the aim of manufacturing 1.58 million units. The minimum output capacity for eco-car models approved in the second phase is set at 100,000 units a year within five years of production, and excise duty on an eco-car is levied at 14%, while those compatible with Euro V emission standards can enjoy a 12% rate. New phase-two eco-cars must emit no more than 100g CO2/km, down from 120 g/km of CO2 for existing eco-car models. Fuel efficiency must be 4.3 litres/100 km, up from 5 litres in the first phase. Engine displacement should not exceed 1.3 litres for gasoline (petrol) models and 1.5 litres for diesel models.

Furthermore, demand in Thailand for alternative-powertrain vehicles, including electric vehicles (EVs), hybrids, and plug-in hybrid electric vehicles (PHEVs), is expected to grow in the coming years. The Thai government has announced excise tax rate changes focused on increasing the adoption of such vehicles in the country. The government is also setting up infrastructure to support such vehicles. It aims to have 1.2 million EVs and PHEVs on the country's roads by 2036. The incentives and infrastructure will help Thailand to remain an attractive destination for global automakers producing alternative-powertrain vehicles. Thailand is also attempting to revise its free-trade agreement (FTA) with China and hopes to implement a 0% import duty on EVs. At present, a 20% import duty is charged on EVs imported from China and Japan, and an 80% duty on EVs imported from the United States. The import duty on vehicles in Thailand is fairly high unless the vehicle is covered under bilateral agreements. A reduced import tax in Thailand under the FTA would help open up the market and create demand for EVs produced by Chinese automakers.

Toyota has become the first automaker to receive the Thai government's incentives for local production of alternative-powertrain vehicles. The government has approved Toyota's plan to invest THB19 billion in the country to produce hybrid vehicles locally. Toyota will assemble 70,000 hybrid vehicles per year, manufacture 70,000 batteries a year for hybrid vehicles, and produce 9.1 million units of automotive components per annum, including doors, bumpers, and front/rear axles. The automaker is expected to start assembly of hybrid vehicles in the country from 2018. It has also reduced the retail prices of its hybrid vehicles in the country in accordance with the new excise tax rate by another 2-12.5%. Furthermore, Isuzu also plans to bring out hybrid vehicles in the country by 2020.

We expect demand in Thailand for alternative-powertrain vehicles to grow in the coming years. We forecast that annual production of such vehicles will increase to over 46,000 units in Thailand by 2020, up from 13,537 units in 2016.

About this article

The above article is from AutoIntelligence Daily by IHS Markit. AutoIntelligence Daily provides same-day analysis of automotive news, events and trends.​​​​​​ Get a free trial.

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