More cheer at the Thai International Motor Expo 2017POSTED BY Yamin Vong ON 30 November 2017
Car buyers are returning to the show floor after a four-year hiatus that was caused by Yingluck Shinawatra government’s first-time car buyers’ scheme.
The energy and vibrancy was felt the opening of the Thai International Motor Expo 2017 at the Impact Challenger exhibition venue in Bangkok.
The first-time car scheme was launched in 2011 for first-time buyers of cars that were below 1,500cc or pick-up trucks that cost less than one million Thai Baht (about RM125,280). First-time car buyers were given a tax rebate of up to 100,000 THB (about RM12,528).
However, buyers under this scheme had to keep their cars for five-years – failing which would forfeit their tax rebate.
The first batch of 30,000 to 40,000 first-time car buyers have since “graduated” from their five-year lock-in as of late last year and this will see an increase in private consumption demand by up to 3%, according to Krungsri Research (Thailand’s fifth biggest bank, the Bank of Ayudha, is usually branded as Krungsri) chief economist, Somprawin Manprasert.
Three per cent or not, the level of vitality and presentation by exhibitors were a marked contrast to the somber mood and monotones of colour at the Bangkok Motor Show in November, when the kingdom was in mourning.
There are another two new factors that will boost the growth of the Thai auto industry immediately and in the near future.
The first is Toyota Motor Corporation has resolved its impasse with the Thai authorities over the tax treatment of its locally-assembled Prius hybrid cars. As we understand, a car model needs a certain volume of local sales before local assembly can proceed.
This has led to Toyota Motor Thailand suspending assembly of its Prius hybrid in August 2015.
Newly industrialising countries, including Malaysia, also have this uneasy tension between car manufacturers and tax authorities. One way of overcoming this is for the government to grant a specific timeframe for the manufacturer to promote the sales of completely built up (CBU) cars.
During this time window, the car company can gradually ramp up localisation of the car until it reaches the minimum requirement of local content to qualify for “locally assembled car” status.
Toyota started to assemble the Camry hybrid at its Chachoengsao plant in 2009.
With the refreshed commitment to Thailand and the kingdom’s policy to make Thailand the hub for electric vehicles, Toyota Motor Corporation has also sent a new head honcho, Michinobu Sugata, to head all Toyota operations in Thailand.
Sugata is a veteran of Southeast Asian markets. According to Bloomberg’s corporate profile, he graduated from Kobe University with a bachelor’s degree in Economics in 1983 and joined TMC in 1991. He also has an MBA from the University of Washington in 1993.
Before this promotion to Thailand, he was the executive vice president of Toyota Motor Asia Pacific (TMAP) – Japan and general manager of TMAP – Japan at Toyota Motor Philippines Corporation since January 2016.
He joined TMP in 1997 as senior vice-president of the comptrollership division. Following his four-year assignment with TMP, he went back to Toyota Motor Corporation’s Asia division as a project manager.
He was previously also the executive managing coordinator for Toyota Motor Thailand for three years before going to TMAP in Singapore as senior vice president for one year, where he was responsible for marketing sales. He served as independent commissioner of Astra International tbk PT since April 2016 until April 26, 2017.
Putting the past behind it, Toyota is now working on a long term roadmap to grow the hybrid market in Thailand.
The Board of Investment of Thailand announced in March new privileges for hybrid electrical vehicles, plug-in hybrid vehicles (PHEV) and fully electric vehicles (EV).
These new tax exemptions could mean a price reduction of up to 200,000 THB (RM25,045) for a locally assembled hybrid car.