Local auto industry believes new models will revive sales By: NAREERAT WIRIYAPONG Published: 26/06/2009 at 12:00 AM Newspaper section: Business New model launches are expected to help stabilise local passenger car sales in the third quarter before a recovery in the fourth quarter, the Thailand Automotive Institute said yesterday. While pickup truck sales and exports continued to plunge in May, the decline in passenger car sales was more modest. As a result, overall vehicle production rose 15% last month from April, said Vallop Tiasiri, the institute's president.

Next month, Toyota will launch its Camry Hybrid, followed by a five-door Mazda from Auto Alliance Thailand, the Ford-Mazda joint venture. Mitsubishi and Nissan also plan new cars in the third quarter, said Mr Vallop.

"We forecast passenger car sales to stabilise in the third quarter with new models attracting interest from office workers who still have purchasing power," he said.

Clear recovery signs would emerge in the fourth quarter when stimulus spending by governments worldwide start to revive the global economy, Mr Vallop said at a seminar at the Manufacturing Expo in Bangkok yesterday.

Suparat Sirisuwanangkura, president of the Thai Automotive Association, said sales volumes would likely turn positive in the last quarter as the Thai government's stimulus spending bears fruit.

"I am confident that the (stimulus) budget will increase construction activity and create liquidity, raising employment and improving consumers' spending power," said Mr Suparat.

Vudhigorn Suriyathantananont, a senior vice-president of Toyota Motor Thailand, said his company would start marketing the Camry Hybrid from late July to early August, with a sales target of between 700 and 800 units a month.

He said Toyota would price the new model at no more than 100,000 baht above than the top-of-the-line Camry, which costs 1.68 million baht.

This year, Toyota is likely to revise down its domestic sales target from the previous 220,000 units for all models, as pickup sales have been very poor.

Mr Vudhigorn said domestic political issues also remained a key concern that affects the vehicle industry directly.

"Stability in the country is the most important factor for us because consumers will spend money when they are confident in the economy," he said.

Michael Kordys, president of BMW Group Thailand, agreed that political conditions have a major impact.

"Thailand is still hopeful to maintain its leading position as the automotive hub in Asia, yet the government needs to maintain consistency in its economic policies. As well, the conflict in politics needs to be reduced," he said.

The industry has a target to increase output to between 2.4 million and 2.5 million units in 2014 from 1.4 million last year. Executives say the eco-car programme will be an important element in helping achieve the goal.

Thailand is forecast to roll out 940,000 vehicles this year, down from the previous forecast of 1.08 million, on an expected 35% fall in exports from 784,000 units in 2008. Domestic volume is projected at 430,000 units, down 29%.