Toyota Motor Thailand predicts a further decline in car sales this month due to the ongoing political uncertainty surrounding the formation of a new government and its policies. Thailand held a General Election on May 14, with the Move Forward Party (MFP) securing the most seats in the House of Representatives. However, it is still uncertain whether the party can form a successful coalition government with its seven allied parties.
The political uncertainty is causing potential car buyers to delay their purchases as they wait for clarity on the new government’s economic policies, according to Suphakorn Rattanawaraha, vice-president of Toyota Motor Thailand. In April, domestic car sales dropped by 6.14% year-on-year to 59,530 units, attributed to banks’ strict loan screening criteria amidst high household debt, as reported by the Federation of Thai Industries (FTI).
From January to April this year, car sales experienced a 6.11% year-on-year decrease, reaching 276,603 units. Surapong Paisitpatanapong, vice-chairman of the FTI and spokesman for the FTI’s Automotive Industry Club, expressed his belief that a newly established government would boost the confidence of commercial banks and financial institutions, alleviating their concerns about granting loans to car buyers.
Despite a 9.8% year-on-year decline in domestic car sales last month, Toyota Motor Thailand maintained the largest market share at 32.9%, selling 19,565 units. Isuzu followed with a 22.4% market share and a 19.6% year-on-year drop in car sales, selling 13,336 units. Meanwhile, Honda reported a 25.5% year-on-year increase in car sales with 6,409 units sold in April, securing a 10.8% market share, reported Bangkok Post.
The political uncertainty in Thailand has been affecting a lot of business sectors negatively, with the SET dipping 3% in the first week after the election. It has contracted 132 billion baht or 1.7% since the election. In addition, due to recently implemented land and building tax rules, Bangkok’s tax revenues have been declining significantly. Read more about the story HERE.
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