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Auto Sales in Thailand Nosediving, Political Unrest at the Root
Jan 12, 2009

Automobile sales in Thailand dipped to the lowest level in November 2008, representing the sixth fall in a row because of political instability and economic slowdown.

According to the figures released by the Thai automotive industry, car sales in Thailand experienced the sixth consecutive plunge since June 2008 and the sharpest decline of the year in November 2008, with fall of 20.2% from October 2008, as reported by MorningStar.

The total volume sales of vehicles was recorded at 46,068 Units, including 27,892 Units of commercial vehicle, down 36.7%, and 18,176 Units of passenger cars, up 33.2% owing to tax cut on cars running on ethanol. According to the data gathered by Tri Petch Isuzu Sales, vehicle sales from January to November 2008 totaled at 556,267 Units, a fall of 1.88% from the same period last year. Sales of Toyota declined maximum of 6.14% in the first eleven months.

This sharp rise is a result of low consumer confidence due to international and national threats. Another reason for sluggish automotive industry is the political unrest and government’s instability that started with the struggle between the supporters of the country’s prime minister and his opponents.

Thailand automobile industry is also badly hit by the economic slump. Potential auto buyers stayed away from showrooms seeing the unstable market environment and inaccessibility to auto loans. Credit market is facing liquidity crunch; consequently, people who had plans of vehicles buying on credit are finding it very hard to get their vehicle loans sanctioned.

Vehicle sales may see some improvement in near future as many auto manufacturers have announced incentives on their vehicles. Besides, fall in oil prices will encourage people to invest in vehicles.

According to a Research Analyst at RNCOS, “Conflict between Thai prime minister supporters and his opponents, and the economic instability led to a dramatic drop in the Thai auto sales. Now auto manufacturers (in the country) are trying to clear the built up inventories instead of focusing on manufacturing new cars. They should take full advantage of expected stability in the market in coming few months.”

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