Many records were broken this year, particularly in terms of auto sales and production. More than 1 million vehicles were sold in the country for the first time this year, while production exceeded 2 million for the first time.
In addition, each auto company has achieved sales records, thanks to several important positive factors.
The most significant event that boosted the Thai auto market is without a doubt the government’s populist First Car Buyer Programme, launched late last year. Although it was not popular at the start and just a few applications were submitted – causing people to think that the project would be unsuccessful – at the end as many as 1.2 million people came out to use their rights. It is expected that it would take until June next year for all vehicles purchased under the scheme to be delivered to customers.
The First Car scheme also caused widespread arguments during the year-end period after Toyota, the largest auto-maker in the country, started accepting orders for the all-new Vios. Toyota said customers could buy the new Vios under the scheme, but other carmakers argued that the Vios does not qualify since production has not commenced and it has not been officially launched (the scheduled launch of the new Vios is in the second quarter of 2013). But in the end the Excise Department came out to announce that Toyota has the right to use the First Car Buyer privilege for the new Vios since production has already started, despite in very small numbers.
In 2012, another highlight was the introduction of the Honda Jazz Hybrid at a highly attractive price of Bt700,000-plus. It is the cheapest hybrid vehicle on sale in Thailand today. Meanwhile, Honda was rather unsuccessful with the Brio eco-car and had to launch the sedan version, the Brio Amaze, during the year-end. The Brio Amaze has proved highly successful, especially with the First Car scheme in operation.
The year 2012 also marks a change for independent importers. Apart from high-ranking Cabinet members like a deputy prime minister coming out to talk about the “behind-the-scenes” techniques that caused them to be labelled “grey market” importers, the most popular imported brand for independent importers – Mercedes-Benz – is facing stronger competition from the authorised distributor.
In 2012, Mercedes-Benz Thailand revamped its battle plan, and cut down on features that were not necessary for the Thai market in order to lower the retail price to the same level as independent importers. It also introduced popular models faster than before, forcing major independent importers to turn to other brands to replace lost sales of imported Mercedes-Benz cars. The brand that has been growing in this respect is Porsche.
Mercedes-Benz Thailand seems to have adopted the same strategy as all-time fellow German arch rival BMW Thailand to increase sales. One of the strategies that BMW used was to remove unnecessary equipment from the cars, allowing it to lower the price dramatically. For example, the BMW X1 sub-compact crossover is priced at less than Bt2 million.
With auto sales being more than 1 million per year, a new licence plate system needed to be introduced as well. A new format is now being used, with an additional number in front of the two alphabets and four numbers.
Also making headlines in 2012 was the restructuring of the auto excise tax system, which has been widely debated. The new system is based on carbon dioxide emissions, which the government claims is used in Europe.
However, our system just borrows the basic idea from Europe and adjusts it to suit Thai conditions. But there is still heavy disagreement, and it is believed that before the system is enforced on January 1, 2016, there would be some changes or even a delay in implementation.
There were many more incidents in 2012, and I must say that every comment I made in my Autotalk columns was intended to reflect the ideas and views of the Thai people. Foreigners and expats, or even Thais who have an understanding of international situations, may not have agreed with many of these views.
But I confirm that what I have suggested is reflective of the Thai way of life, and I still am happy to hear and exchange views with others in a fair and willing manner.
Happy New Year and wish you the best for 2013.