Toyota retains forecast Thai car sales will drop this year in global slowdown

25, Jul. 2019

Toyota Motor Thailand President Michinobu Sugata said in Bangkok on Wednesday that the local car market is good but sales will drop this year.
Toyota Motor Thailand President Michinobu Sugata said in Bangkok on Wednesday that the local car market is good but sales will drop this year.

BANGKOK, NNA – Toyota Motor Corps. expects a slump this year in Thailand’s car market amid slowing global growth and central bank efforts to curb car loans after last year’s spurt pushed up household debt.

Toyota projects overall new vehicle sales in Thailand to fall 4 percent from a year earlier to around one million units for the first drop in three years, the same projection made in January, Michinobu Sugata, president of Toyota Motor Thailand Co., told news media on Wednesday.

“We expect that Thai consumers’ negative sentiment against the uncertain global economy may influence the market for the second half of the year, and so we remain our market forecast unchanged at one million units as presented at the beginning of the year,” he said.

Sugata emphasized that sales of one million units would still be considered high, and would mark a second consecutive year above one million after last year's sales of 1.04 million. Sales rose 19.5 percent in 2018 and 13.4 percent in 2017 after falling 3.9 percent in 2016.

“The market for the first half of the year has been better than our initial expectation based on the continued strength in Thai economy,” Sugata said.

New vehicle sales in Thailand fell 2.1 percent to 86,048 in June, posting the first year-on-year decline in 30 months, data from the Federation of Thai Industries released last week showed.

In January-June, sales rose 7.1 percent from a year earlier to 523,770, after a 19.5 percent jump for the whole of 2018.

The Bank of Thailand has tightened regulations on commercial banks making car loans after household debt climbed to 78.6 percent of country’s GDP last year.

In the second half of 2019, Toyota expects the tighter grip on lending to dampen consumer sentiment, hurting sales further, Ninnart Chaithirapinyo, chairman of the local unit, said.

Toyota sold 171,502 vehicles in January-June, up 20.8 percent year-on-year. It held a 32.7-percent market share. It aims to sell 330,000 units this year, up 4.7 percent from last year.