Toyota predicts decline in auto market
Bad feeling, loan crunch
Mr. Sugata (right) and Mr. Vudhigorn (second from left) with the locally-made Corolla Altis, Toyota’s first hybrid car sold for less than a million baht.
Toyota Motor Thailand predicts that the auto market will continue to decline over the next few months due to low purchasing power from buyers and tight auto loan approvals from banks.
President Michinobu Sugata said Toyota saw lower car sales in June and July as the local market suffered from a poor economic climate.
“Toyota is monitoring car sales for the remaining months of 2019, but the full-year projection has yet to be changed or reduced,” Mr. Sugata said. “The market in 2019 will reach 1 million cars sold, as in 2013 and 2018. We calculate the local first half sales of 523,770 cars, up 7.1% from the same period last year.”
He told Toyota’s mid-year press conference that the country’s car market in the second half of the year would suffer from uncertainties.
“Difficulties for the Thai market include worsening GDP growth, inspections of central bank auto loans and the smoldering trade war between the United States and China,” Sugata said.
Vudhigorn Suriyachantananont, executive vice president, said the low purchasing power is largely for buyers in the green car segment, which offers the cheapest vehicles on the market.
“Many financial institutions need to carefully consider loan approvals for green car buyers, because once banks ask for a higher down payment, it means those buyers have less ability to repay the loan,” Mr. Vudhigorn. “As a result, banks have to reject some auto loan applications. Toyota’s leasing company reported that the loan refusal rate had increased slightly to 11-12% from the normal rate of 10%.
He said the decline in monthly car sales would continue into the fourth quarter.
Separately, Toyota launched the 12th-generation Corolla Altis on Tuesday, which is produced at the Gateway plant in Chachoengsao.
The new Corolla Altis comes with a 1.8-liter gasoline engine, as well as the fourth generation of Toyota’s hybrid version for the first time in Thailand, thanks to Toyota joining the government’s EV program for production mass of hybrid cars.
The Corolla Altis is the third model in the plan after the C-HR and the Camry. This is the first time Toyota has offered a hybrid car for less than a million baht in Thailand.
Toyota plans to sell 2,300 Corolla Altises per month and plans to export 900 per month, mainly to Southeast Asia.
Toyota started producing the Corolla Altis in Thailand with the second generation and has racked up sales of 800,000 cars in the country.