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Thailand Autos Report Q3 2010
Management Report
Published: June 2010
Pages: 47
Tables: For full details, please email keithw@cmsinfo.com
From: GBP 353.33 Buy Now!
Research from: Business Monitor International
Sector: Automotive
New vehicles sales in the first three months of 2010 underwent a dramatic recovery, rising 54.8% yearon- year (y-o-y) to a total of 166,802 units, according to Toyota Motor Thailand, which compiles data for the industry as a whole. In March, the latest month for which data was available as we went to press, sales surged 52.6% y-o-y, to 63,067 units. A recovery of consumer demand (amid a wider economic recovery from last year’s recession and a low interest rate environment) has helped to buoy auto sales this year.
New vehicles sales in the first three months of 2010 underwent a dramatic recovery, rising 54.8% yearon- year (y-o-y) to a total of 166,802 units, according to Toyota Motor Thailand, which compiles data for the industry as a whole. In March, the latest month for which data was available as we went to press, sales surged 52.6% y-o-y, to 63,067 units. A recovery of consumer demand (amid a wider economic recovery from last year’s recession and a low interest rate environment) has helped to buoy auto sales this year.
However, sales growth is unlikely to maintain its current momentum, with the Q110 figures buoyed in percentage y-o-y growth terms by very low base effects, as Q109 represented the nadir of the recession in Thailand. The second half of the year will provide much higher base effects. We are also increasingly concerned about the stability of the political situation in Thailand. Admittedly, protests against an unpopular government have been ongoing for several months (amid a wider context of political instability which now goes back some years) with no visible effect so far on consumers’ demand for big ticket items. However, it appeared in April 2010 that the standoff between the government and protesters was escalating to a level where a threatened crackdown by the state - and concomitant violence on the part of (up to now, largely peaceful) demonstrators - could generate a prolonged and intensified crisis, possibly culminating in a partial disintegration of state authority. As such, we stick with the forecast for car sales that we made last quarter - ie that new vehicle sales for 2010 as a whole will rise 7% y-o-y, to a total of 586,000 units.
The risks to our core forecasts are both to the upside and the downside. Downside risks are particularly severe, given the current highly uncertain political situation, which could even, in the worst case scenario, culminate in civil conflict, centred around the country’s capital, Bangkok. That would obviously be disastrous for car sales, which would collapse under this (non-core) scenario, to levels below even those recorded in the first months of 2009, when Thailand’s export-led economy was in the grip of the worst stages of the recent global recession. Yet a quick solution to the current political crisis would likely allow car sales to remain robust during the remainder of the year, implying sales growth for the year as a whole that would comfortably hit double-digits in y-o-y percentage terms.
Figures for March 2010 show Toyota Motor Thailand maintaining its leading position in the country’s auto market. We introduce a SWOT analysis centred on this company this quarter, focusing on its core strengths and weaknesses, as well as future risks and opportunities. The company sold a total of 28,002 new vehicles during March 2010, for a 44% share of the local sales market, ahead of Isuzu Motors Thailand, which sold 13,139 units. Isuzu, therefore, took a market share of 21%, such that the leading two companies in Thailand took a combined share of nearly two thirds of the new vehicle sales market.
However, sales growth is unlikely to maintain its current momentum, with the Q110 figures buoyed in percentage y-o-y growth terms by very low base effects, as Q109 represented the nadir of the recession in Thailand. The second half of the year will provide much higher base effects. We are also increasingly concerned about the stability of the political situation in Thailand. Admittedly, protests against an unpopular government have been ongoing for several months (amid a wider context of political instability which now goes back some years) with no visible effect so far on consumers’ demand for big ticket items. However, it appeared in April 2010 that the standoff between the government and protesters was escalating to a level where a threatened crackdown by the state - and concomitant violence on the part of (up to now, largely peaceful) demonstrators - could generate a prolonged and intensified crisis, possibly culminating in a partial disintegration of state authority. As such, we stick with the forecast for car sales that we made last quarter - ie that new vehicle sales for 2010 as a whole will rise 7% y-o-y, to a total of 586,000 units.
The risks to our core forecasts are both to the upside and the downside. Downside risks are particularly severe, given the current highly uncertain political situation, which could even, in the worst case scenario, culminate in civil conflict, centred around the country’s capital, Bangkok. That would obviously be disastrous for car sales, which would collapse under this (non-core) scenario, to levels below even those recorded in the first months of 2009, when Thailand’s export-led economy was in the grip of the worst stages of the recent global recession. Yet a quick solution to the current political crisis would likely allow car sales to remain robust during the remainder of the year, implying sales growth for the year as a whole that would comfortably hit double-digits in y-o-y percentage terms.
Figures for March 2010 show Toyota Motor Thailand maintaining its leading position in the country’s auto market. We introduce a SWOT analysis centred on this company this quarter, focusing on its core strengths and weaknesses, as well as future risks and opportunities. The company sold a total of 28,002 new vehicles during March 2010, for a 44% share of the local sales market, ahead of Isuzu Motors Thailand, which sold 13,139 units. Isuzu, therefore, took a market share of 21%, such that the leading two companies in Thailand took a combined share of nearly two thirds of the new vehicle sales market.