By REUTERS
Thai domestic auto sales posted their smallest rate of decline in more than two years in October, with sales set to pick up next year on an improving outlook, the Federation of Thai Industries said on Tuesday.
Southeast Asia’s second-largest economy has yet to get back on track since an army coup ended months of political unrest last May as exports have long been soft and domestic consumption has been crimped by low farm prices and high household debt.
Auto sales in October fell 4.2% from a year earlier, the smallest percentage fall since May 2013, when sales began easing after the effects of a government first-car subsidy faded. Subsidies ended in 2012.
“Car sales started to improve after months of double-digit falls. That’s because of demand for new models of pick-up trucks,” Surapong Paisitpattanapong, spokesman of the FTI’s Auto Industry Club, told reporters.
The Motor Expo 2015 to be held next month should also help sales this year, he said.
But Surapong said sales would still contract for the third year in 2015 due to the weak economy.
The automobile industry accounts for 10% of the economy, as Thailand is a regional vehicle production and export base for the world’s top carmakers.
As sales in January-October shrank 13.6% from a year earlier, the federation maintained its domestic sales target at 750,000-800,000 cars, down as much as 15% from last year’s 881,832 vehicles.
Auto sales have dropped on an annual basis since May 2013, reflecting the fading effects of the subsidy scheme, under which buyers have to keep cars for five years.
Sales jumped 81% in 2012, the year the scheme ended, but fell 7.7% in 2013 and 33.7% last year.
Sales, however, were expected to rise by 3%-4% next year along with an expected improved economic outlook, Surapong said.
The junta is trying to lift growth with various stimulus and investment incentives.
On the bright side, auto exports rose 19.1% to 111,229 cars in October, and should reach the federation’s target of 1.2 million cars this year, he said.
For next year, it targets exports of 1.22 million cars, which should help the country’s overall exports and economy.
The state planning agency forecast economic growth of 2.9% this year and 3%-4% next year, driven by big infrastructure plans.
In 2014, growth was 0.9%, the lowest in three years.
— By Satawasin Staporncharnchai
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